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Speaker 1: M. This is Mesters in Business with very Results on

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Speaker 1: Blueberg Radio. This week on the podcast strap Yourself In,

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Speaker 1: I have an extra extra special guest, Robert Hormat's former

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Speaker 1: vice chairman of Goldman Sachs. God. His his resume is

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Speaker 1: just astonishing, from the Knicks administration to the Reagan administration

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Speaker 1: to the Obama administration, back and forth into private sector

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Speaker 1: to public service. Really just just a legendary guy. The

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Speaker 1: French awarded him the Legion of Honor Medal in ninety two. Uh.

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Speaker 1: He's currently managing director at Tinaman Advisors, who essentially work

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Speaker 1: with a lot of ultra high net worth family offices

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Speaker 1: and some institutions and endowments. Uh. You probably know him

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Speaker 1: best from his many years as vice chairman and at

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Speaker 1: Goldman Sachs. What can I say, a legendary career, really

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Speaker 1: insightful about the state of the world today. We talk

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Speaker 1: about everything from the infrastructure build out in China, to

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Speaker 1: what the US needs to do to catch up and

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Speaker 1: stay economically competitive, to what's going on in technology and

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Speaker 1: crypto when just really his perspective is is unique and

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Speaker 1: I think he he has a lot of insights not

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Speaker 1: only about investing, but about how to manage your own career,

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Speaker 1: how to build a collaborative enterprise, how to make sure

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Speaker 1: that you stay in touch with people even when they

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Speaker 1: have nothing to offer you other than collegiality and friendship.

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Speaker 1: And you know, uh, he is very much a thoughtful

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Speaker 1: diplomat and has just put together an amazing track record.

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Speaker 1: Let me stop babbling and just say, with no further ado,

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Speaker 1: my conversation with Bob Hormats. This is Mesters in Business

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Speaker 1: with very renaults on Bloomberg Radio. This week I have

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Speaker 1: an extra special guest. His name is Robert Hormats, and

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Speaker 1: what a story career he has had. You probably are

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Speaker 1: most familiar with him as his role as vice chairman

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Speaker 1: of Goldman Sachs. Currently he is a managing director at

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Speaker 1: Taman Advisors. He has had a long and quite storied

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Speaker 1: career in both government and finance. Uh he was the

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Speaker 1: Deputy Assistant Secretary of State for Economic and Business Affairs

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Speaker 1: as well as part of the National Security Council from

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Speaker 1: seventy four to seventy seven, Deputy Trade Representative from seventy

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Speaker 1: seven at seventy nine, Assistant Secretary of State under Ronald Reagan.

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Speaker 1: UH he was one of the people who not only

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Speaker 1: was an economic advisor to people like Henry Kissinger, General

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Speaker 1: Brent Scotkraft a big knee Brazinski, but he helped manage

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Speaker 1: the Nixon administration's opening of diplomatic relations with China's communist government.

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Speaker 1: He was a recipient of the French Legion of Honor

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Speaker 1: award in nineteen eighty two. He was Under Secretary of

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Speaker 1: State for Economic Growth in the Obama administration. I have

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Speaker 1: to stop there because it could just keep going on

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Speaker 1: and on. Bob Hormatt's welcome to Bloomberg. Well, thank you

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Speaker 1: for having me on, Barry. I really enjoy your show,

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Speaker 1: and I'm really honored to be a participant in it. Well, well,

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Speaker 1: it's my honor to have you here. It's my pleasure.

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Speaker 1: And one of the first things I noticed about your

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Speaker 1: career that's so fascinating. You were in your like mid

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Speaker 1: twenties and you're serving as a senior staff member for

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Speaker 1: International Economic Affairs on the U s. National Security Council

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Speaker 1: in like nineteen sixty nine. How do you accrue so

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Speaker 1: much responsibility as somebody in their mid twenties. Well, I

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Speaker 1: was fortunate. I was fortunate enough. First of all, they

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Speaker 1: got a good education. And second, I used the time

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Speaker 1: I was going to undergraduate and graduate school to spend

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Speaker 1: as much time as I could in the practical real world.

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Speaker 1: So I spent one year living in Africa doing research

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Speaker 1: on economic development. I spent several summers as a summer

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Speaker 1: intern in Germany, where I picked up not only German,

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Speaker 1: but was in the middle of the Cold War, went

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Speaker 1: back and forth to Berlin several times, and I was

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Speaker 1: also a summer intern at States, so I learned both

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Speaker 1: the substance of the issues but also was able to

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Speaker 1: accrue practical experience. And I also was very enthusiastic about

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Speaker 1: getting engaged in foreign policy, so I read all I

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Speaker 1: could read and met as many people who were engaged

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Speaker 1: in the process as I as I could. And I

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Speaker 1: had a mentor, Enrique Center, who was very keen on

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Speaker 1: giving young people more and more responsibility. If you talk

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Speaker 1: on a tough assignment and you did it well, your reward,

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Speaker 1: as he used to say, is to give you even

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Speaker 1: more work and to see how well you did. And

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Speaker 1: as you proceeded along working for him, you were given

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Speaker 1: more and more responsibility, and if you did well, you

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Speaker 1: were given more and more. Again, very interesting so tell

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Speaker 1: us what it was like working with Kissinger. He is

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Speaker 1: both a controversial and legendary figure who really looms large

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Speaker 1: in the late twentieth century international world of relations. Yes,

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Speaker 1: I think he really UH, and historians I think will

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Speaker 1: come to the same conclusion was probably, and to a

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Speaker 1: degree still is the premier diplomat of the second half

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Speaker 1: of the twentieth century. Uh, in part because he was

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Speaker 1: so actively engaged in Cold War diplomacy, in helping to

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Speaker 1: deal with difficult problems with the Soviet Union, and part,

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Speaker 1: of course, because he was so actively engaged in opening

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Speaker 1: American relations with China, and in part also because he

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Speaker 1: really was able, as as George Kennon was before him,

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Speaker 1: to map out a strategy for increasing American influence in

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Speaker 1: various parts of the world. For instance, I participated with

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Speaker 1: him in the Middle Eastern strategy to deal with the

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Speaker 1: nine seventy three or and to achieve a peaceful resolution

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Speaker 1: of that and many other Middle Eastern issues. That was

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Speaker 1: a very hot topic at that point, So I was

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Speaker 1: able to travel with him and work with him in

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Speaker 1: those areas. So he was involved in virtually every major

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Speaker 1: foreign policy issue during that period, and also was actively

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Speaker 1: engaged with the other leaders um Masitone Joe and Lyone

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Speaker 1: Shall the Gaul kind of run at an Hour, and

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Speaker 1: numerous other leaders of that period. So he played an

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Speaker 1: active strategic role, in part because he had actually taught

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Speaker 1: at Harvard diplomacy of another era, but in part because

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Speaker 1: he was so actively engaged in the issues of the time,

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Speaker 1: and it was very good at connecting the dots, at

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Speaker 1: developing strategy, not just dealing with issues at huck Or

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Speaker 1: on a transactional basis, but on a strategic basis. And

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Speaker 1: he also was very, very willing to be a mentor,

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Speaker 1: so he would take younger people along. He had n't

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Speaker 1: able you to participate in meetings with foreign heads of

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Speaker 1: state uh in in a very intimate way and an intimate, intimate,

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Speaker 1: thoughtful discussions, So he enabled you to learn not just

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Speaker 1: more about the substance, but the people who were making

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Speaker 1: policy and how diplomacy was actually conducted on a real

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Speaker 1: time basis. So I was a teenager during Nixon's second term,

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Speaker 1: and I have a very vivid recollection of both the

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Speaker 1: Middle East Peace plan that's Kissinger spearheaded and the Cold

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Speaker 1: War discussions and debates and how that move things around

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Speaker 1: with the Soviet Union. I suspect the most consequential thing

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Speaker 1: that Kissinger did was open relations with China. And I

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Speaker 1: also think people wildly underestimated the future impact of that

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Speaker 1: act of diplomacy. You were on that team that helped

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Speaker 1: to open up China. Tell us a little bit about

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Speaker 1: that team, and did you have any idea, how eck

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Speaker 1: aonomically consequential that would end up being a few decades

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Speaker 1: in the future. I really didn't envisage the kind of

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Speaker 1: rapid development that would occur in China in the course

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Speaker 1: of really three or four decades. Um. I knew it

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Speaker 1: was consequential, um. And I actually knew something about the

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Speaker 1: Chinese economy because living in Africa, there were a number

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Speaker 1: of Chinese who were studying at the University of College

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Speaker 1: University College in Darith Salam, Tanzania, where I was, and

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Speaker 1: I got to know them and learned as much as

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Speaker 1: I could. Because Americans couldn't go to China then, it

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Speaker 1: was or trade with China or invest in China. So

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Speaker 1: so getting to know a little bit about the Chinese

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Speaker 1: economy through these individuals actually helped me later on when

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Speaker 1: I was doing papers on how we could normalize to

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Speaker 1: a degree at least UM economic relations with China. But

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Speaker 1: I never dreamed that it would progress so rapidly. I

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Speaker 1: had a lot of discussions with UM leaders during that period,

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Speaker 1: and particularly in the middle period, with dung Cha Peng,

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Speaker 1: who is really the person who led the economic reforms

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Speaker 1: of China, and Ju Ranji, who was the premier they

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Speaker 1: in the really started the reform process, and I figured

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Speaker 1: it would grow economically. I mean, there was a lot

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Speaker 1: of poverty. Thirty million people or so maybe more starved

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Speaker 1: to death during the during the Cultural Revolution, and uh

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Speaker 1: so I was very clear about the intentions of the

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Speaker 1: leaders at that point to enable China to grow and

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Speaker 1: to bring millions of people out of poverty, which Dunha

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Speaker 1: Peng and his colleague were intent on doing. But the

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Speaker 1: technological advances were, from my point of view, breathtaking, and

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Speaker 1: I'd go there one year and you'd see a few

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Speaker 1: modern buildings and a few new laboratories dedicated to AI

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Speaker 1: or other types of scientific advances. But to see how

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Speaker 1: quickly China has become a competitor with the United States

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Speaker 1: and the most advanced technologies of our times was something

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Speaker 1: that I never anticipated. And even the most optimistic Chinese

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Speaker 1: reformers in the nineteen eighties and nineteen nineties anticipated they

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Speaker 1: would grow, anticipated they would improve living standards, and anticipated

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Speaker 1: that they would become an active player in the global scene.

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Speaker 1: But I think very few could have imagined the dramatic

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Speaker 1: technological capabilities of the country as we see now. And

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Speaker 1: it was because China had had a very bad century

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Speaker 1: where they but they called the Century of Humiliation, where

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Speaker 1: they had really been divided into a lot of fragmentation,

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Speaker 1: and they really didn't make much economic progress. And as

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Speaker 1: a nation and certainly as a leadership, they were determined

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Speaker 1: not to miss what they call their fourth Industrial Revolution,

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Speaker 1: which is the high tech revolution. So they put a

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Speaker 1: lot of money into new technology. They focused very, very

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Speaker 1: heavily on advanced education. They sent a lot of students

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Speaker 1: abroad a party to the United States to learn advanced technology.

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Speaker 1: And I can remember one conversation that really summarized it

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Speaker 1: all in my mind, and that is Dung Shaping, who

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Speaker 1: was very advanced in his thinking, had a number of

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Speaker 1: foreigners come and talk and he was able to share

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Speaker 1: his views and we were able to ask him questions,

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Speaker 1: and at one point, I said, you know, I was

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Speaker 1: very impressed with how much economic progress you've made in

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Speaker 1: the last five years. He so he tapped me on

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Speaker 1: the on the leg and said, young man, he said,

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Speaker 1: that was where it was in my thirties. Um, we

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Speaker 1: have done something that will have an even greater impact,

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Speaker 1: and that is Um, I've enabled lots of Chinese to

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Speaker 1: study abroad, which they could not do before. They couldn't

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Speaker 1: study in the United States. They could study elsewhere, but

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Speaker 1: they went to the United States, and when they come back,

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Speaker 1: they will change China. So he placed a great deal

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Speaker 1: of emphasis on education and the ability to go send

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Speaker 1: students to other countries to learn advanced technologies, and how

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Speaker 1: advanced economies were performing, and how you could incentivize people

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Speaker 1: to develop new technologies and advanced advanced from an industrial

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Speaker 1: point of view as well, and anyone could have a

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Speaker 1: bad century. Gives you a sense of their concept of

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Speaker 1: long term planning, which which leads me to a question.

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Speaker 1: You know, we've in the twentieth century we looked at

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Speaker 1: the United States as a leader both in economics and

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Speaker 1: technology and and rule of law and structure. But given

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Speaker 1: how rapidly China has advanced, let's flip that script and

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Speaker 1: ask what lessons can the US learned from China? What

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Speaker 1: what should we be taking from their playbook, be it

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Speaker 1: industrial policy or infrastructure, or what do you see as

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Speaker 1: something that is transferable back to the US. It's a

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Speaker 1: great question, and let me start uh the answer with

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Speaker 1: something that I learned or picked up in China after

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Speaker 1: the financial crisis that was really general aided from the

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Speaker 1: United States. And one of the senior leaders made interesting

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Speaker 1: he said, we have been operating under the assumption that

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Speaker 1: you were the teacher and we were the student, and

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Speaker 1: we had a lot to learn from you about running

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Speaker 1: our financial system and running our economy. Then he paused

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Speaker 1: and said, now we're no longer so sure that you're

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Speaker 1: a very good teacher or that you're doing a very

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Speaker 1: good job in addressing your economic issues, because of this

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Speaker 1: major financial crisis which occurred and really rocked the American economy.

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Speaker 1: So they at that point they came to declusion that

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Speaker 1: perhaps they ought to be more active in developing their

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Speaker 1: own models of thinking about finance and about other things,

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Speaker 1: and not rely as much on the United States. The

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Speaker 1: second thing is that they really did what we did

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Speaker 1: so well in the early part of the nineteen fifties

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Speaker 1: particularly after Sputnik and we realized we were compete with

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Speaker 1: the Soviet Union, and the Soviet Union was never as

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Speaker 1: formidable a competitor as China in as many ways as

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Speaker 1: we find China is able now to compete. So what

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Speaker 1: are what are the United States do? We spend a

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Speaker 1: lot of money on education, particularly high technology education. We

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Speaker 1: brought the best and the brightest from our own society

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Speaker 1: and from abroad to the United States to work in

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Speaker 1: there and studying our university. We put a lot of

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Speaker 1: money into infrastructure, of the Eisenhower Highway Program being one example.

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Speaker 1: And we mobilize the American people behind the virtues of

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Speaker 1: science and the virtues of technology scientists were regarded is

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Speaker 1: really the key to developing the technology that enable us

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Speaker 1: to prevail in the Cold War. What the Chinese are

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Speaker 1: doing is almost the same thing. They've put hu amounts

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Speaker 1: of money into research. We put money into our national labs.

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Speaker 1: They put money into a whole range of research facilities

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Speaker 1: that they have. They put a lot of money into

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Speaker 1: their educational system. Chinese kids work very hard. They don't

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Speaker 1: go out at night and have social events. They go

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Speaker 1: home and study because they know that's not only good

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Speaker 1: for their country, but it's good for them. It helps

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Speaker 1: them advance. Predicting rural kids who we're not used to

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Speaker 1: the city home to the cities, go to big universities

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Speaker 1: and work very hard to advance. They brought in people

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Speaker 1: from all over the world to do research, to go

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Speaker 1: to a Chinese lab. There are lots of Chinese, but

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Speaker 1: they're also people from other countries. They have become a

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Speaker 1: very uh focused society on advancing and playing a leadership

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Speaker 1: role in the in the century on the advanced technologies

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Speaker 1: like AI or quantum computing or five G or other things.

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Speaker 1: So they have really sort of learned the technology is

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Speaker 1: the key to their economic strength and their economic strengths

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Speaker 1: and their ability to prevail in these new technologies would

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Speaker 1: strengthen their credibility as a leading country in the world.

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Speaker 1: And those are the kinds of lessons that they have

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Speaker 1: learned and the kinds of things that you hear them

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Speaker 1: talk about every time you hear President's hut and Paying

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Speaker 1: or any of the other leaders of China talk. They're

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Speaker 1: talking about technology, about competitiveness, about growth, improving their society.

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Speaker 1: And they've brought four million people plus probably closer to

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Speaker 1: I learn a many of people out of poverty, which

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Speaker 1: they regarded as almost a given in the nineteen fifties,

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Speaker 1: and given them opportunities, economic opportunities that would have been

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Speaker 1: very hard to envisage in the nineteen fifties and nineteen sixties.

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Speaker 1: So they've gotten a lot of credit for that for

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Speaker 1: a more equitable society. Although there are still a lot

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Speaker 1: of inequities, they're attempting to deal with those, and technologically

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Speaker 1: they're advancing at a very rapid rate. They're very formidable competitors,

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Speaker 1: and education, I think is the dominant factor that enables

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Speaker 1: them to be that. Quite quite interesting. Let's talk a

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Speaker 1: little bit about your time at Goldman. Was that your

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Speaker 1: first job after leaving government service? It was. I had

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Speaker 1: been in the government starting in my mid twenties, where

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Speaker 1: I worked for Kissinger as you mentioned earlier, and had

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Speaker 1: a number of other jobs, and then I went in

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Speaker 1: nineteen two from the government to Goldman SAX. So it

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Speaker 1: was really my first private sector job. Yes, So tell

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Speaker 1: us what you did, what was your role and how

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Speaker 1: did that progress. Well, I started out working with a

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Speaker 1: team that was focused primarily on developing countries. Since I'd

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Speaker 1: spent a fair amount of time in the developing world,

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Speaker 1: particularly in Africa, and over a period of time I

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Speaker 1: moved along the track of developing my own experience in

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Speaker 1: investment banking um in trying to identify the global trends

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Speaker 1: that were affecting or would in the future effect the market.

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Speaker 1: And gradually was able to move along the path and

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Speaker 1: became vice chairman for Goldman Sacts International and was able

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Speaker 1: to travel around China being one destination, but the Middle

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00:21:07,440 --> 00:21:11,880
Speaker 1: East was another. Spent a lot of time in in Europe,

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Speaker 1: and spent a lot of time in various other parts

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Speaker 1: of Asia. At that point when I first came to Goldman,

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Speaker 1: Goldman was not a very international firm. Really, None of

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Speaker 1: the American the big American firms in the investment banking

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Speaker 1: world had a very large international presence. Some did, but

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Speaker 1: Goldman was really served at the very early stages. And

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Speaker 1: John Whitehead and John Weinberberg, who were the two co

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Speaker 1: chairs of the firm, were very determined. Both of them

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Speaker 1: had been in World War Two, and both of them

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Speaker 1: had seen the outside world, and they felt that Goldman

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00:21:51,480 --> 00:21:56,879
Speaker 1: should be much more proactive in developing its knowledge and

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Speaker 1: its business relationships internationally, in part to be able to

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Speaker 1: serve international clients, but in part because American investors were

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Speaker 1: increasingly interested in international markets and wanted to know what

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Speaker 1: was going on. So I was at my last government job,

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Speaker 1: which was Assistant Secretary of State, as you pointed out,

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Speaker 1: at that point in the early eighties, and Henry Kissinger

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Speaker 1: and Bob McNamara, we're both on the Golden Advisory Board,

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Speaker 1: and they recommended to John Whitehead and John Weinberg that

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Speaker 1: here was a guy who was getting ready to leave government,

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Speaker 1: had a lot of international experience, so you should bring

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Speaker 1: him on and help him, um give him the sort

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Speaker 1: of support he needs to help build out the capabilities

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Speaker 1: of Goldman internationally. So I traveled a lot throughout the

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Speaker 1: world identifying opportunities, but also working with a growing number

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Speaker 1: of people on our team who were being stationed in

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Speaker 1: various parts of the world to serve local clients and

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Speaker 1: serve American clients who wanted to know more about what

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Speaker 1: was going on in these parts of the world. Quite

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Speaker 1: quite interesting. You've been an eyewitness to how international finance

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Speaker 1: has developed and evolved and changed over time. What are

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Speaker 1: some of the most significant changes we we obviously already

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Speaker 1: started talking about China, but what else is out there

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Speaker 1: that people should have on their radar as changes in

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Speaker 1: international finance that are really going to resonate in the

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Speaker 1: coming years. Well, that's one of the interesting challenges that

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Speaker 1: we have in this globalized world of today because for

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Speaker 1: part of this period there were a series of international crises.

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Speaker 1: One of them started in Asia, one of them started

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Speaker 1: in Mexico, one of them started in the United States

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Speaker 1: um and the problem American investors had was to particularly

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Speaker 1: with events that were occurring abroad, was figuring out what

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Speaker 1: was happening and figuring out how it would affect uh

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Speaker 1: the American market and increasingly Americans who wanted to diversify

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Speaker 1: their portfolios. We're investing in various other parts of the world,

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Speaker 1: particularly first Europe, which is a market or set of

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Speaker 1: markets that they knew, and most Americans had visited Europe

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Speaker 1: and had a good sense that if you wanted to

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Speaker 1: diversify globally, Europe was the place to start, along with Japan.

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Speaker 1: But then which had a booming market for a number

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Speaker 1: of years. We shouldn't forget now it's the growth rate

347
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Speaker 1: to slow down, but it's market for a long time

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Speaker 1: was really steaming. And then m the notion of investing

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Speaker 1: developing countries began to take hold, and first with the

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Speaker 1: banks who were making more and more loans to emerging economies,

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Speaker 1: and then individual investors or foundations or high net worth

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Speaker 1: individuals families were beginning to diversify into the developing world.

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Speaker 1: So that was really one of the changes. When I

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Speaker 1: first started out of Goldman, there was very little UH

355
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Speaker 1: interest in international markets, very little exposure to international markets,

356
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Speaker 1: and international markets had very little impact on the United States.

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Speaker 1: Over the course of the time I was there, and

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Speaker 1: subsequently since I've left left, the exposure has been far greater.

359
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Speaker 1: Events abroad have had a far greater impact on our

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Speaker 1: own market, and the notion of diversification has become an

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00:25:57,760 --> 00:26:03,919
Speaker 1: increasingly powerful one for h for various portfolios, and just

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Speaker 1: for knowing what's going on in the world. So let's

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Speaker 1: stick with um Goldman Sachs and various governments officials who

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00:26:13,560 --> 00:26:18,440
Speaker 1: have moved fluidly back and forth between government and private sector.

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00:26:18,880 --> 00:26:23,400
Speaker 1: I don't think there's another firm in finance that understands

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Speaker 1: the importance of government action and how to both anticipate

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Speaker 1: and shape it better than Goldman Sachs. What is the

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00:26:33,240 --> 00:26:37,480
Speaker 1: secret of their success? They really have put together a

369
00:26:37,600 --> 00:26:42,000
Speaker 1: tremendous track record in that area. It's a it's a

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Speaker 1: very interesting question. It really impart is a tradition UH

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Speaker 1: at Goldman that was there well before I joined the firm. UH.

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Speaker 1: John Weinberg and his father, Sydney Weinberg were both very

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Speaker 1: actively in off them providing financial support and financial advice

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Speaker 1: to the government during World War Two. Joe Fowler, who

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Speaker 1: was the Sectary of the Treasury, came to Goldman Sachs

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Speaker 1: after he was Treasury secretary. UM, We've seen a number

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Speaker 1: of other people like Bob Rubin who was a Goldman

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00:27:23,880 --> 00:27:28,240
Speaker 1: and then became Treasury secretary. So we've had people come

379
00:27:28,280 --> 00:27:32,880
Speaker 1: from the government and and and go to Goldman Sachs afterwards.

380
00:27:33,080 --> 00:27:37,119
Speaker 1: And we've had people that myself included I was in

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00:27:37,160 --> 00:27:39,280
Speaker 1: the government and then came to Goldman Sachs. And then

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00:27:39,320 --> 00:27:43,560
Speaker 1: there numerous people at Goldman who after they leave Goldman

383
00:27:44,359 --> 00:27:47,720
Speaker 1: go to the government. I think in part as they

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00:27:47,760 --> 00:27:53,040
Speaker 1: get developed experience at Goldman and the kinds of issues

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Speaker 1: that the government has to deal with, particularly during a

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Speaker 1: financial crisis, but also in dealing with financial markets. And

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00:28:02,640 --> 00:28:07,280
Speaker 1: they also are people who I want to give back

388
00:28:07,359 --> 00:28:10,679
Speaker 1: They've had their experience in the financial sector in New

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00:28:10,760 --> 00:28:14,119
Speaker 1: York and have done reasonably well, and they feel that

390
00:28:14,480 --> 00:28:18,120
Speaker 1: in their next life, rather than sit back and retire,

391
00:28:18,320 --> 00:28:23,280
Speaker 1: they can bring some of their experience to bear um

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Speaker 1: in working for the government. And I think that back

393
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Speaker 1: and forth movement is is a very um important part

394
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Speaker 1: of the culture of Goldman. Some other firms have this too,

395
00:28:39,320 --> 00:28:44,560
Speaker 1: but I think Goldman really started the tradition really during

396
00:28:44,600 --> 00:28:48,440
Speaker 1: World War Two with Goldman people working in Washington to

397
00:28:49,200 --> 00:28:54,160
Speaker 1: support the war effort. M really really quite interesting and

398
00:28:54,160 --> 00:28:57,320
Speaker 1: and you have been able to move fluidly back and

399
00:28:57,360 --> 00:29:01,280
Speaker 1: forth between government and private sector. How have you found

400
00:29:01,280 --> 00:29:05,440
Speaker 1: that process and what are some of the risks and

401
00:29:05,560 --> 00:29:09,320
Speaker 1: rewards of going back and forth like that. You know,

402
00:29:09,600 --> 00:29:12,800
Speaker 1: when I was in the government, I really did not

403
00:29:13,240 --> 00:29:18,240
Speaker 1: did not have a very deep knowledge of financial markets

404
00:29:18,640 --> 00:29:23,000
Speaker 1: in New York. I had a number of friends with

405
00:29:23,040 --> 00:29:25,960
Speaker 1: whom I'd going to school and or developed over a

406
00:29:25,960 --> 00:29:29,160
Speaker 1: period of time, who were working in the New York

407
00:29:29,160 --> 00:29:34,160
Speaker 1: financial institutions. And we're working for corporations too, because obviously

408
00:29:34,200 --> 00:29:36,600
Speaker 1: they play a very big role in this process. So

409
00:29:37,120 --> 00:29:42,040
Speaker 1: when I was asked to join Goldman Sex, I made

410
00:29:42,080 --> 00:29:45,360
Speaker 1: a very strong point of visiting Washington on a very

411
00:29:45,400 --> 00:29:48,880
Speaker 1: regular basis and meeting with people with whom I had

412
00:29:48,880 --> 00:29:55,000
Speaker 1: worked before while I was in Washington and trading thoughts

413
00:29:55,080 --> 00:29:58,800
Speaker 1: on what was going on in financial markets, and they

414
00:29:58,840 --> 00:30:03,080
Speaker 1: were in turn conveying their thoughts on what was going

415
00:30:03,160 --> 00:30:07,840
Speaker 1: on in government and how the government saw economics and

416
00:30:08,480 --> 00:30:14,120
Speaker 1: the financial world. So it was those those personal relationships

417
00:30:14,800 --> 00:30:18,600
Speaker 1: I think are very important and often underestimated. When the

418
00:30:18,680 --> 00:30:22,000
Speaker 1: relationships you develop when you're in your twenties and thirties,

419
00:30:23,240 --> 00:30:25,400
Speaker 1: no matter where you are, whether you're in the government

420
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Speaker 1: or you're in a corporation or you're in a financial

421
00:30:30,360 --> 00:30:35,240
Speaker 1: institution in New York, you tend to keep those relationships up.

422
00:30:35,280 --> 00:30:41,160
Speaker 1: They build a level of confidence between you and and

423
00:30:41,280 --> 00:30:46,480
Speaker 1: others in Washington and elsewhere in the country. But the

424
00:30:46,560 --> 00:30:49,760
Speaker 1: other part of it that's interesting is you also build up,

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Speaker 1: extremely particular when you're in the government, extremely close relations

426
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Speaker 1: with people at your level, um in other governments around

427
00:30:59,840 --> 00:31:05,400
Speaker 1: the world. So um, your meetings with Japanese and Germans

428
00:31:05,440 --> 00:31:11,280
Speaker 1: and French and Brits and saudiast and many others, and

429
00:31:12,360 --> 00:31:17,720
Speaker 1: over time, not at that point, but later Chinese and others.

430
00:31:17,720 --> 00:31:21,680
Speaker 1: So you developed not only these linkage is at a

431
00:31:21,760 --> 00:31:25,920
Speaker 1: young age with between New York and Washington, and New

432
00:31:26,000 --> 00:31:29,320
Speaker 1: York and the business community in Washington, in the business community,

433
00:31:29,360 --> 00:31:33,560
Speaker 1: but you developed similar kinds of relationships at this relatively

434
00:31:33,600 --> 00:31:38,800
Speaker 1: young age with people in other countries, and those relationships

435
00:31:38,800 --> 00:31:41,880
Speaker 1: helped to build a level of confidence. So you can

436
00:31:41,920 --> 00:31:45,800
Speaker 1: pick up the phone two years later and talk to

437
00:31:45,880 --> 00:31:49,480
Speaker 1: them about a problem. And particularly when you're in a crisis,

438
00:31:50,040 --> 00:31:52,280
Speaker 1: you want to know who to call, who to talk to,

439
00:31:52,920 --> 00:31:55,320
Speaker 1: who's going to be making decisions at the other end

440
00:31:55,360 --> 00:31:59,959
Speaker 1: of the line. And as you advance in your career,

441
00:32:01,440 --> 00:32:06,560
Speaker 1: those relationships get stronger. You see these people, you talk

442
00:32:06,640 --> 00:32:09,600
Speaker 1: to them, and you have that level of confidence that

443
00:32:09,680 --> 00:32:14,280
Speaker 1: you've developed in an early age, and that really sort

444
00:32:14,320 --> 00:32:20,360
Speaker 1: of propels you onwards to develop more relationships, more level,

445
00:32:20,480 --> 00:32:25,280
Speaker 1: more degrees of confidence over the course of your career.

446
00:32:25,440 --> 00:32:29,720
Speaker 1: And I still to this day keep up with phone

447
00:32:29,720 --> 00:32:34,040
Speaker 1: calls with people in China or Britain or France or

448
00:32:34,240 --> 00:32:38,200
Speaker 1: various other parts of the world when something occurs, or

449
00:32:38,240 --> 00:32:40,000
Speaker 1: they'll call me and say, well, what do you think

450
00:32:40,000 --> 00:32:41,720
Speaker 1: of what's going on in Washington? What do you think

451
00:32:41,720 --> 00:32:44,960
Speaker 1: of what's going on in financial markets? So these personal

452
00:32:44,960 --> 00:32:50,160
Speaker 1: relationships are extremely important, and it's important, prickly for younger

453
00:32:50,160 --> 00:32:53,400
Speaker 1: people who are now moving up or are just starting

454
00:32:53,400 --> 00:32:57,360
Speaker 1: out to develop develop those personal relationships and those personal

455
00:32:57,480 --> 00:33:01,400
Speaker 1: confidences over a period of time, because they really do

456
00:33:02,680 --> 00:33:07,040
Speaker 1: become very valuable at that point, but even more so

457
00:33:07,120 --> 00:33:10,480
Speaker 1: as your career advances, and they help your career advance,

458
00:33:10,880 --> 00:33:13,240
Speaker 1: but they also help you understand the world a lot

459
00:33:13,320 --> 00:33:15,960
Speaker 1: better than if you live in a bubble. So, Bob,

460
00:33:16,000 --> 00:33:19,080
Speaker 1: you returned to public office in two thousand and nine

461
00:33:19,360 --> 00:33:23,320
Speaker 1: as Under Secretary of State for Economic and Business and

462
00:33:23,440 --> 00:33:28,080
Speaker 1: Agricultural Affairs in the Obama administration. What made you decide

463
00:33:28,120 --> 00:33:31,520
Speaker 1: to go back to government service And tell me a

464
00:33:31,520 --> 00:33:36,120
Speaker 1: little bit about that period, right as we were dealing

465
00:33:36,160 --> 00:33:41,200
Speaker 1: with the worst of the Great Financial Crisis. Well, I've

466
00:33:41,240 --> 00:33:46,000
Speaker 1: been in the government. Uh So, the years I've spent government,

467
00:33:46,040 --> 00:33:52,959
Speaker 1: we're during the Cold War, UM under various administrations, and

468
00:33:53,040 --> 00:33:57,400
Speaker 1: then UM and then after the Cold War dealing with

469
00:33:57,440 --> 00:34:00,920
Speaker 1: some of the Middle East issues. But I I saw

470
00:34:01,440 --> 00:34:06,600
Speaker 1: in in two thousand nine that we were on the

471
00:34:06,600 --> 00:34:10,960
Speaker 1: brink of or when the process of developing a new

472
00:34:11,000 --> 00:34:16,239
Speaker 1: world order. There's a post Cold War order, and we

473
00:34:16,280 --> 00:34:18,000
Speaker 1: didn't know what it was going to look like. But

474
00:34:18,120 --> 00:34:21,680
Speaker 1: we knew that the old order was changing or had changed,

475
00:34:22,239 --> 00:34:26,000
Speaker 1: and the new order had yet to be created, and

476
00:34:26,640 --> 00:34:29,280
Speaker 1: I thought there was this was a very interesting time

477
00:34:29,320 --> 00:34:36,400
Speaker 1: to participate in that process. Um. Second, Um, I had

478
00:34:36,640 --> 00:34:41,280
Speaker 1: always thought that the job of Undersecretary of State was

479
00:34:42,040 --> 00:34:44,959
Speaker 1: a thrilling job where you had the opportunity to look

480
00:34:45,000 --> 00:34:50,720
Speaker 1: at the entire range of economic issues, international economic issues

481
00:34:50,760 --> 00:34:55,520
Speaker 1: in particular that the country faced and helped to shape

482
00:34:55,880 --> 00:35:00,680
Speaker 1: American policy during that period and have and have an

483
00:35:00,680 --> 00:35:05,680
Speaker 1: impact on the global environment for the next decade or

484
00:35:05,680 --> 00:35:09,560
Speaker 1: two to come. Third, I'd known Hillary Clinton for a

485
00:35:09,640 --> 00:35:14,799
Speaker 1: numbers and had a very developed a very good relationship

486
00:35:14,880 --> 00:35:20,880
Speaker 1: with her, and therefore was was was UM eager to

487
00:35:21,200 --> 00:35:24,960
Speaker 1: when she asked me to do that job, to to

488
00:35:25,560 --> 00:35:30,560
Speaker 1: do it, and I found that it was very exciting

489
00:35:31,040 --> 00:35:33,960
Speaker 1: in terms of the ability to look at how the

490
00:35:34,000 --> 00:35:39,440
Speaker 1: world was changing and play a constructive role in helping

491
00:35:39,440 --> 00:35:42,160
Speaker 1: to change it. I had been the financial markets, the

492
00:35:42,200 --> 00:35:45,480
Speaker 1: financial world for twenty years. I thought, this is an

493
00:35:45,480 --> 00:35:50,200
Speaker 1: opportunity to really make a contribution to my country and

494
00:35:50,280 --> 00:35:55,520
Speaker 1: to our foreign policy and to the global order of

495
00:35:55,560 --> 00:35:59,799
Speaker 1: the of the twenty first century, and to UM get

496
00:36:00,880 --> 00:36:05,840
Speaker 1: back and engage in the kind of issues that UM

497
00:36:05,880 --> 00:36:10,239
Speaker 1: that I royed and found exciting. UH. John McCain had

498
00:36:10,280 --> 00:36:15,720
Speaker 1: the statement, it's really exciting and and a very positive

499
00:36:15,760 --> 00:36:19,000
Speaker 1: feeling to be in the arena, and I felt this

500
00:36:19,080 --> 00:36:21,160
Speaker 1: was a good way of not only being in the

501
00:36:21,200 --> 00:36:24,719
Speaker 1: arena arena, but making the contribution to my country and

502
00:36:25,160 --> 00:36:31,520
Speaker 1: the world UM by going back in the government. M wow,

503
00:36:31,640 --> 00:36:35,040
Speaker 1: quite fascinating. Let's talk a little bit about your new role.

504
00:36:35,120 --> 00:36:37,319
Speaker 1: You've been at Tina Mine Advisors for a couple of

505
00:36:37,400 --> 00:36:41,239
Speaker 1: years where you're managing director. Tell us what they do

506
00:36:41,480 --> 00:36:44,560
Speaker 1: and what your roll at the firm is. Well. I

507
00:36:45,520 --> 00:36:47,920
Speaker 1: when I left government, I spent a number of years

508
00:36:48,239 --> 00:36:54,880
Speaker 1: UM with Kissinger Advisors, and then I was asked to

509
00:36:55,200 --> 00:36:58,839
Speaker 1: join UM, a firm that I had been associated with

510
00:36:59,440 --> 00:37:03,840
Speaker 1: because I was is on their UM Advisory Investment Advisory

511
00:37:03,880 --> 00:37:05,440
Speaker 1: Committee for a number of years and that of his

512
00:37:06,160 --> 00:37:11,200
Speaker 1: firm called Team Advisors. It's a UM my relatively new there,

513
00:37:11,239 --> 00:37:13,560
Speaker 1: but the firm has been around for a while, and

514
00:37:14,800 --> 00:37:17,400
Speaker 1: what impressed me about it was the quality of the

515
00:37:17,440 --> 00:37:22,759
Speaker 1: people and the quality of service to clients. UH. The

516
00:37:22,800 --> 00:37:30,680
Speaker 1: advisors of tetaman Um work alongside individuals families Endowmond's foundations

517
00:37:31,600 --> 00:37:34,120
Speaker 1: to help them meet their financial goals, but also to

518
00:37:34,280 --> 00:37:38,040
Speaker 1: help them UM in in other ways, one of which

519
00:37:38,160 --> 00:37:44,839
Speaker 1: is to UM have a greater impact through investing in

520
00:37:44,840 --> 00:37:51,320
Speaker 1: in in companies and in issues on subjects that they

521
00:37:51,320 --> 00:37:56,719
Speaker 1: that they believe in in. UM emphasizes emphasizing first of all,

522
00:37:56,760 --> 00:37:59,360
Speaker 1: for instance, the environment and other things of this of

523
00:37:59,440 --> 00:38:03,319
Speaker 1: this nature. But it's the strength of the firm is

524
00:38:03,400 --> 00:38:06,880
Speaker 1: that it is a relatively small firm compared to some

525
00:38:06,960 --> 00:38:10,040
Speaker 1: of the very large Wall Street firms, and that there

526
00:38:10,160 --> 00:38:16,160
Speaker 1: is a really strong relationship between the firm and the

527
00:38:16,200 --> 00:38:20,640
Speaker 1: members of the firm and individual clients, UM and families.

528
00:38:20,840 --> 00:38:22,960
Speaker 1: And it's in a way for some people like a

529
00:38:23,000 --> 00:38:26,200
Speaker 1: family office, if they don't want to put together a

530
00:38:26,239 --> 00:38:31,200
Speaker 1: family office, UM tetam and can help them perform all

531
00:38:31,239 --> 00:38:33,680
Speaker 1: the functions of a family office or work with the

532
00:38:33,760 --> 00:38:38,399
Speaker 1: family office that they have now and helped to deal

533
00:38:38,480 --> 00:38:43,560
Speaker 1: with issues that they face in such offices. So UM

534
00:38:44,880 --> 00:38:49,960
Speaker 1: tends to be family offices as opposed to let's say, institutions.

535
00:38:51,200 --> 00:38:55,400
Speaker 1: They tend to be either individuals high net worth individuals

536
00:38:55,520 --> 00:39:01,040
Speaker 1: or institutions or family offices. Yes, it's really all three.

537
00:39:02,040 --> 00:39:07,000
Speaker 1: And your role in some cases endowments, right, So I'm

538
00:39:07,000 --> 00:39:10,040
Speaker 1: going to imagine your role is sort of big picture,

539
00:39:10,440 --> 00:39:12,920
Speaker 1: macro overview of what's going on in the world, or

540
00:39:12,920 --> 00:39:17,680
Speaker 1: do you get more granular than that. Well, I try

541
00:39:17,760 --> 00:39:21,839
Speaker 1: to do both. I UM the team of people that

542
00:39:22,440 --> 00:39:26,640
Speaker 1: is extrict of extremely high quality, and they have people

543
00:39:26,680 --> 00:39:32,359
Speaker 1: who are experts in investment UM and financial markets and

544
00:39:32,560 --> 00:39:39,919
Speaker 1: trusts and UH planning help people plan for their financial futures.

545
00:39:40,000 --> 00:39:44,840
Speaker 1: And we have offices really throughout the country and Western Europe.

546
00:39:45,480 --> 00:39:48,360
Speaker 1: So what I do is work a lot with those

547
00:39:48,840 --> 00:39:53,560
Speaker 1: regional offices in this country and abroad. I also work

548
00:39:53,800 --> 00:39:58,080
Speaker 1: with the individual clients of the firm, particularly those who

549
00:39:58,080 --> 00:40:02,480
Speaker 1: are interested in what's going on internationally and what the

550
00:40:02,520 --> 00:40:07,399
Speaker 1: impact will be on their portfolios or what's coming down

551
00:40:07,400 --> 00:40:09,000
Speaker 1: the road, you know, what are the what are the

552
00:40:09,040 --> 00:40:14,040
Speaker 1: issues that are being UM developed around the world that

553
00:40:14,120 --> 00:40:17,840
Speaker 1: could have an impact on them or their or their portfolios.

554
00:40:18,400 --> 00:40:23,600
Speaker 1: And then I also work with the firm and management

555
00:40:23,600 --> 00:40:26,400
Speaker 1: of the firm on various changes that are going on

556
00:40:26,560 --> 00:40:30,160
Speaker 1: prickly using my experience in Washington, but also using my

557
00:40:30,239 --> 00:40:35,840
Speaker 1: experience internationally. So I work both with individuals with foundations,

558
00:40:35,880 --> 00:40:41,720
Speaker 1: with family offices but also on longer term strategic issues

559
00:40:41,840 --> 00:40:44,720
Speaker 1: that the firm or clients of the firm are likely

560
00:40:44,760 --> 00:40:48,200
Speaker 1: to face. So one of the things I've been hearing

561
00:40:48,480 --> 00:40:52,920
Speaker 1: from a variety of high net worth individuals and family

562
00:40:52,960 --> 00:40:58,680
Speaker 1: offices is just how challenging the macro picture is today.

563
00:40:58,719 --> 00:41:01,920
Speaker 1: It seems there are a lot of cross currents and

564
00:41:02,200 --> 00:41:06,280
Speaker 1: a lot of black swans. And how do you frame

565
00:41:06,719 --> 00:41:09,239
Speaker 1: the state of the world today when you're advising a

566
00:41:09,360 --> 00:41:13,800
Speaker 1: family office. Well, I think what you what you need

567
00:41:13,840 --> 00:41:19,359
Speaker 1: to do is um emphasize that there are a lot

568
00:41:19,400 --> 00:41:22,319
Speaker 1: of uncertainties that were really in a new environment with

569
00:41:23,120 --> 00:41:27,719
Speaker 1: the Fed um constantly increasing its balance sheet with very

570
00:41:27,840 --> 00:41:33,120
Speaker 1: large deficits of an unprecedented leptons that have been built

571
00:41:33,160 --> 00:41:37,600
Speaker 1: up already and are being built up further as we speak.

572
00:41:38,520 --> 00:41:43,120
Speaker 1: And what are the implications of those So I think

573
00:41:43,200 --> 00:41:46,399
Speaker 1: one of the keys is agility, is trying to look

574
00:41:46,440 --> 00:41:52,920
Speaker 1: ahead and be able to make decisions with UM a

575
00:41:53,800 --> 00:41:58,280
Speaker 1: sense of what are the likely opportunities and the likely

576
00:41:58,400 --> 00:42:02,480
Speaker 1: risks three months from now, six months from now, a

577
00:42:02,560 --> 00:42:07,600
Speaker 1: year from now. So we utilize the formidable expertise of

578
00:42:08,040 --> 00:42:11,000
Speaker 1: the firm, and there are a lot of extremely good

579
00:42:11,040 --> 00:42:13,879
Speaker 1: people with whom I work, So it's it's certainly not

580
00:42:13,960 --> 00:42:16,960
Speaker 1: just me alone, it's a whole group of people. But

581
00:42:17,080 --> 00:42:21,959
Speaker 1: we try to acquaint our clients with with all the

582
00:42:22,080 --> 00:42:24,960
Speaker 1: risks and all the opportunities in front of them and

583
00:42:25,560 --> 00:42:31,520
Speaker 1: help them make adjustments in their portfolios that anticipate these

584
00:42:31,600 --> 00:42:35,040
Speaker 1: kinds of risks or these kinds of opportunities. Is as

585
00:42:35,080 --> 00:42:39,600
Speaker 1: we see them, So we try to instead of UM

586
00:42:39,640 --> 00:42:41,960
Speaker 1: just sort of looking at the world as it is

587
00:42:42,080 --> 00:42:45,799
Speaker 1: today and assuming it's going to stay the way it

588
00:42:45,880 --> 00:42:49,799
Speaker 1: is today, try to get a sense of what is

589
00:42:50,480 --> 00:42:52,960
Speaker 1: what is around the corner, what is over the horizon,

590
00:42:53,440 --> 00:42:55,760
Speaker 1: how it roll affect their portfolio, and how they should

591
00:42:56,120 --> 00:43:02,680
Speaker 1: position themselves to address these potential changes. Do you ever

592
00:43:02,719 --> 00:43:06,840
Speaker 1: start to notice a pattern with similar questions bubbling up

593
00:43:06,920 --> 00:43:10,360
Speaker 1: from lots of different clients and types of clients. I

594
00:43:10,440 --> 00:43:12,960
Speaker 1: recall a couple of years ago getting a lot of

595
00:43:13,040 --> 00:43:16,799
Speaker 1: question about crypto, and last year it was about, hey,

596
00:43:16,840 --> 00:43:19,960
Speaker 1: how crazy is this market? This year it's been inflation.

597
00:43:20,440 --> 00:43:23,759
Speaker 1: Do you see that? Or is it? Um? Pretty much

598
00:43:23,840 --> 00:43:28,440
Speaker 1: everything goes well, it's really everything goes But now that

599
00:43:28,480 --> 00:43:35,560
Speaker 1: you mentioned those three things, UM, crypto is really UM

600
00:43:35,680 --> 00:43:40,120
Speaker 1: increasingly important. I mean all, virtually all countries are at

601
00:43:40,400 --> 00:43:44,279
Speaker 1: one state or another looking at what crypto is going

602
00:43:44,320 --> 00:43:48,560
Speaker 1: to mean financial markets and for the world, and different

603
00:43:48,560 --> 00:43:53,400
Speaker 1: countries have different models, different companies are developing different models,

604
00:43:53,440 --> 00:43:57,560
Speaker 1: So UM, it's something that you really can't avoid. You

605
00:43:57,600 --> 00:44:01,000
Speaker 1: have to really develop a knowledge of of what's going on.

606
00:44:01,160 --> 00:44:02,959
Speaker 1: We don't know how it's all going to turn out,

607
00:44:03,520 --> 00:44:05,479
Speaker 1: but we do know that a lot of very bright

608
00:44:05,560 --> 00:44:11,440
Speaker 1: people are working on this now and inevitably it's going

609
00:44:11,480 --> 00:44:17,719
Speaker 1: to have um some perhaps a substantial impact on on

610
00:44:17,800 --> 00:44:21,080
Speaker 1: the world and perhaps on individual plos and perhaps in

611
00:44:21,120 --> 00:44:25,560
Speaker 1: the way markets operate. So knowing about it um and

612
00:44:25,680 --> 00:44:29,240
Speaker 1: keeping these issues in the back of your mind or

613
00:44:29,960 --> 00:44:36,319
Speaker 1: making financial decisions anticipating those are are is really is

614
00:44:36,400 --> 00:44:39,560
Speaker 1: very important to sort of keep up with one this

615
00:44:39,719 --> 00:44:43,359
Speaker 1: being one of the sort of advanced technological changes that's

616
00:44:43,360 --> 00:44:48,880
Speaker 1: occurring in markets and in companies and in financial institutions.

617
00:44:48,920 --> 00:44:54,000
Speaker 1: The second you've put your what are the inflationary implications

618
00:44:54,120 --> 00:44:57,480
Speaker 1: of all these things that are going on. Traditionally it's

619
00:44:57,520 --> 00:45:01,200
Speaker 1: been the case that when the Fed prints money and

620
00:45:01,320 --> 00:45:03,880
Speaker 1: builds up a large balance sheet, and you see so

621
00:45:03,960 --> 00:45:07,799
Speaker 1: much liquidity out there, in part as a result of

622
00:45:07,840 --> 00:45:10,080
Speaker 1: what the government is providing in part as a result

623
00:45:10,080 --> 00:45:15,520
Speaker 1: of FED policy, it's going to be inflationary. UM. So far,

624
00:45:15,600 --> 00:45:19,239
Speaker 1: we have seen evidence of a certain amount of inflation,

625
00:45:19,360 --> 00:45:22,239
Speaker 1: in part because of that, but more importantly because of

626
00:45:22,840 --> 00:45:28,400
Speaker 1: by constraints and various impediments and the supply chain that

627
00:45:28,520 --> 00:45:33,839
Speaker 1: are causing delays in such things as building supplies, uh,

628
00:45:33,960 --> 00:45:39,080
Speaker 1: semiconductors for automobiles and a variety of things like that,

629
00:45:39,600 --> 00:45:43,320
Speaker 1: and those two push up prices. So but we really

630
00:45:43,320 --> 00:45:47,520
Speaker 1: haven't seen and then wages going up in certain areas

631
00:45:47,200 --> 00:45:51,359
Speaker 1: as their labor shortages in certain sectors. But we really

632
00:45:51,400 --> 00:45:56,239
Speaker 1: haven't seen this sort of runaway inflation that we had prinstance,

633
00:45:56,239 --> 00:46:00,440
Speaker 1: straying the Paul volcre arab that he's so courage was

634
00:46:00,520 --> 00:46:04,840
Speaker 1: able to deal with so UM. I think we're keeping

635
00:46:04,880 --> 00:46:07,400
Speaker 1: an eye on this as our most investors, but the

636
00:46:08,000 --> 00:46:11,120
Speaker 1: impact so far has not been that great. And if

637
00:46:11,160 --> 00:46:17,560
Speaker 1: the FED um starts changing its policy a little bit um,

638
00:46:18,480 --> 00:46:22,200
Speaker 1: which it sort of signals now, then the question is

639
00:46:22,200 --> 00:46:24,280
Speaker 1: what does that mean for markets? So far, the markets

640
00:46:24,280 --> 00:46:29,480
Speaker 1: have not regarded this as a serious thing. And we're

641
00:46:29,600 --> 00:46:33,319
Speaker 1: very fortunate to have J. Powell is as FED chair

642
00:46:34,200 --> 00:46:36,920
Speaker 1: who I've known for a long time, very sensible, thoughtful

643
00:46:36,960 --> 00:46:40,360
Speaker 1: guy in and Gianet Yelling, who I work with in Washington,

644
00:46:41,120 --> 00:46:47,319
Speaker 1: very sensible, thoughtful Treasury secretary. So I have a lot

645
00:46:47,360 --> 00:46:51,560
Speaker 1: of confidence that the President is getting very good advice

646
00:46:51,640 --> 00:46:55,120
Speaker 1: from those people as to what's happening and how to

647
00:46:55,200 --> 00:46:58,960
Speaker 1: react to it. And I think is one reason the

648
00:46:59,000 --> 00:47:04,239
Speaker 1: markets have reacted in a more um steady way than

649
00:47:04,320 --> 00:47:07,120
Speaker 1: they might otherwise when you look at these numbers, because

650
00:47:07,160 --> 00:47:11,640
Speaker 1: they see competent people who are running the economy, who

651
00:47:12,040 --> 00:47:16,480
Speaker 1: have had experience and can deal with these issues, even

652
00:47:16,480 --> 00:47:19,640
Speaker 1: though there's a lot of unknowns, and there are because

653
00:47:19,640 --> 00:47:24,640
Speaker 1: we've never been in quite this situation before. Um, these

654
00:47:24,680 --> 00:47:26,680
Speaker 1: are people who know what to do. I wrote a

655
00:47:26,680 --> 00:47:29,960
Speaker 1: book years ago on happy for our wars called The

656
00:47:30,000 --> 00:47:33,440
Speaker 1: Cost of the Price of Liberty. And we've had numbers,

657
00:47:33,640 --> 00:47:38,600
Speaker 1: big deficits and big debts like this during World War Two,

658
00:47:38,719 --> 00:47:40,319
Speaker 1: towards the end of World War Two, but we knew

659
00:47:40,320 --> 00:47:44,680
Speaker 1: when the war ended those numbers would start coming down. Um.

660
00:47:44,800 --> 00:47:48,040
Speaker 1: And now the question is how do you bring things

661
00:47:48,120 --> 00:47:51,640
Speaker 1: back to a more normal environment. But we don't know

662
00:47:52,000 --> 00:47:55,319
Speaker 1: how that's going to happen or what the implications are

663
00:47:55,320 --> 00:47:57,759
Speaker 1: going to be. But you just have to keep your

664
00:47:57,760 --> 00:48:01,840
Speaker 1: eyes open and watch and simplications are going to be

665
00:48:01,960 --> 00:48:07,560
Speaker 1: for for markets and individuals and and for the global economy.

666
00:48:07,800 --> 00:48:11,560
Speaker 1: So Wall Street very much as a fan of Jerome Powell,

667
00:48:11,680 --> 00:48:17,160
Speaker 1: arguably Trump's most competent appointee. I think that's a fair statement.

668
00:48:17,800 --> 00:48:21,280
Speaker 1: You want to handicap the odds of him getting reappointed

669
00:48:22,120 --> 00:48:26,359
Speaker 1: or did the previous president not reappointing Janet Yellen sort

670
00:48:26,360 --> 00:48:30,160
Speaker 1: of set a president that, Hey, when a FED chair

671
00:48:30,320 --> 00:48:33,880
Speaker 1: comes live, when that when that seat is up to

672
00:48:33,960 --> 00:48:38,000
Speaker 1: be reopened, the president gets to put his impremature on

673
00:48:38,080 --> 00:48:43,759
Speaker 1: the Federal Reserve by appointing his own chairman. I've long

674
00:48:43,840 --> 00:48:51,279
Speaker 1: since given up the the handicapping of decisions on individuals

675
00:48:51,280 --> 00:48:55,400
Speaker 1: in Washington, having lived there and participated there for a

676
00:48:55,440 --> 00:48:58,640
Speaker 1: long time. In these kinds of decisions, it's very very

677
00:48:58,640 --> 00:49:01,600
Speaker 1: hard to know my I would I would simply make

678
00:49:01,640 --> 00:49:05,360
Speaker 1: the point that I think he is and the board

679
00:49:05,600 --> 00:49:10,520
Speaker 1: are very competent people, and I do think that UM

680
00:49:10,719 --> 00:49:14,120
Speaker 1: markets have a lot of trust in them, and uh

681
00:49:15,239 --> 00:49:17,160
Speaker 1: and and leave it at that. What the president is

682
00:49:17,200 --> 00:49:19,640
Speaker 1: going to do or not do, I'm is beyond my

683
00:49:19,719 --> 00:49:25,400
Speaker 1: pay grade. Fair enough, so, by the time this broadcast,

684
00:49:25,640 --> 00:49:30,279
Speaker 1: we should likely have an infrastructure bill passed in the

685
00:49:30,360 --> 00:49:35,640
Speaker 1: United States. You have long been a very zealous advocate

686
00:49:36,560 --> 00:49:42,560
Speaker 1: for both building and repairing infrastructure in the country. Tell

687
00:49:42,640 --> 00:49:44,520
Speaker 1: us some of the things you think we should have

688
00:49:44,640 --> 00:49:48,279
Speaker 1: done years, if not decades ago, and what do you

689
00:49:48,320 --> 00:49:52,319
Speaker 1: like about what you see in the current infrastructure bill. Well,

690
00:49:52,320 --> 00:49:54,839
Speaker 1: I think this is the best chance we've had in

691
00:49:54,880 --> 00:49:58,359
Speaker 1: a long time of getting a really good infrastructure bill,

692
00:49:58,680 --> 00:50:05,640
Speaker 1: because we need it for several reasons. One, first of all,

693
00:50:05,719 --> 00:50:09,839
Speaker 1: we've we've for decades, I've been, as you correctly point out,

694
00:50:09,960 --> 00:50:16,640
Speaker 1: arguing that are weak and deteriorating infrastructure is a huge

695
00:50:16,760 --> 00:50:23,000
Speaker 1: hindrance to our economic outlook. And if you look around

696
00:50:23,000 --> 00:50:28,000
Speaker 1: the world, the emphasis of China and many other countries

697
00:50:28,040 --> 00:50:31,399
Speaker 1: on infrastructure has been one reason that they've been able

698
00:50:31,440 --> 00:50:34,440
Speaker 1: to create a lot of jobs and b has made

699
00:50:34,480 --> 00:50:40,160
Speaker 1: them more competitive. And see, you're a stronger country internationally

700
00:50:42,239 --> 00:50:45,879
Speaker 1: if you have a strong economy domestically, and a key

701
00:50:45,920 --> 00:50:52,800
Speaker 1: to a strong economy domestically is good infrastructure, roads, highways, telecommunications,

702
00:50:53,920 --> 00:50:58,640
Speaker 1: and a variety of other factors. And the Chinese have

703
00:50:58,800 --> 00:51:02,880
Speaker 1: understood this and at a good training system obviously is

704
00:51:02,960 --> 00:51:06,880
Speaker 1: very important and modern airports. All these things are important

705
00:51:06,920 --> 00:51:09,200
Speaker 1: to a strong economy, and as strong economy, as they say,

706
00:51:09,320 --> 00:51:14,440
Speaker 1: is critical to your economic influence. It demonstrates your government

707
00:51:14,560 --> 00:51:19,120
Speaker 1: is functionally able to operate in an effective way, and

708
00:51:19,360 --> 00:51:23,920
Speaker 1: it strengthens your leadership because other countries themselves want to

709
00:51:24,400 --> 00:51:29,200
Speaker 1: develop their own infrastructure capability, so that to me is

710
00:51:29,400 --> 00:51:33,440
Speaker 1: very important. For the moment, we have an especially good opportunity.

711
00:51:33,520 --> 00:51:38,600
Speaker 1: Interest rates are very low. There is a lot of

712
00:51:38,760 --> 00:51:42,680
Speaker 1: bipartisan support, as we've seen on the Hill, particularly now

713
00:51:42,719 --> 00:51:49,560
Speaker 1: and the recent Center votes for UH infrastructure, large scale infrastructure,

714
00:51:50,760 --> 00:51:57,279
Speaker 1: and it is critical also to national security because as

715
00:51:57,360 --> 00:52:01,439
Speaker 1: Eisenhower understood when he developed his Highway bill, you've got

716
00:52:01,440 --> 00:52:03,839
Speaker 1: to be able to have a good infrastructure to keep

717
00:52:03,920 --> 00:52:08,760
Speaker 1: up the mobility of people back and forth and build

718
00:52:08,800 --> 00:52:13,400
Speaker 1: your own strength as an economy. So we need to

719
00:52:13,440 --> 00:52:15,960
Speaker 1: do this now more than ever because we have the

720
00:52:16,040 --> 00:52:20,760
Speaker 1: chance low interest rates. We need more jobs for people

721
00:52:20,760 --> 00:52:23,879
Speaker 1: who have been laid off during the pandemic. We need

722
00:52:23,880 --> 00:52:25,879
Speaker 1: to demonstrate to the rest of the world that our

723
00:52:25,960 --> 00:52:30,560
Speaker 1: economy and our government can function on a bipartisan basis

724
00:52:30,680 --> 00:52:35,120
Speaker 1: in an effective way. And we need also to deal

725
00:52:35,160 --> 00:52:39,040
Speaker 1: with a backlog of unmet infrastructure needs that if we

726
00:52:39,120 --> 00:52:41,120
Speaker 1: don't deal with them now, are just going to get

727
00:52:41,160 --> 00:52:44,640
Speaker 1: worse and worse. So people say, well, you're you're leaving

728
00:52:44,880 --> 00:52:49,560
Speaker 1: a large debt to the next generation. Maybe so, but

729
00:52:49,719 --> 00:52:53,040
Speaker 1: if you don't do something now, you're leaving a deteriorating

730
00:52:53,080 --> 00:52:57,600
Speaker 1: infrastructure to the next generation, which is going to hinder

731
00:52:57,719 --> 00:53:01,319
Speaker 1: the ability to create jobs, and hinder our strength as

732
00:53:01,360 --> 00:53:05,560
Speaker 1: a country and and make us a weaker economy later on.

733
00:53:05,680 --> 00:53:09,040
Speaker 1: So now is the moment, and we ought to be

734
00:53:09,600 --> 00:53:14,040
Speaker 1: doing this auto biopartisan basis to demonstrate that we can

735
00:53:14,120 --> 00:53:18,120
Speaker 1: do something on a bipartisan basis that leaves the next

736
00:53:18,160 --> 00:53:23,279
Speaker 1: generation better off, and a strong infrastructure would would do that.

737
00:53:23,800 --> 00:53:27,440
Speaker 1: I've always hated the argument you're leaving a large debt

738
00:53:27,440 --> 00:53:32,560
Speaker 1: to the next generation because it's so intellectually disingenuous. You're

739
00:53:32,600 --> 00:53:37,440
Speaker 1: also leaving a massive infrastructure, a platform that the private

740
00:53:37,440 --> 00:53:41,120
Speaker 1: sector can build on. You know, companies report earnings, they

741
00:53:41,160 --> 00:53:44,880
Speaker 1: have to report both liabilities and assets. Debt is only

742
00:53:45,040 --> 00:53:48,840
Speaker 1: half of the picture. And as you pointed out, interest

743
00:53:48,920 --> 00:53:52,000
Speaker 1: rates are so low. So let me throw a curve

744
00:53:52,000 --> 00:53:55,319
Speaker 1: ball at you. What do you think of financing a

745
00:53:55,360 --> 00:53:58,080
Speaker 1: big infrastructure build out with a fifty year or a

746
00:53:58,160 --> 00:54:01,160
Speaker 1: hundred year bonds. Well, I don't know about a fifty

747
00:54:01,200 --> 00:54:03,120
Speaker 1: year hundred year bond. We're not really used to this,

748
00:54:03,239 --> 00:54:05,680
Speaker 1: and the markets are not used to these kinds of

749
00:54:05,719 --> 00:54:10,120
Speaker 1: things that do this thirty Well, it's hard for me

750
00:54:10,200 --> 00:54:13,640
Speaker 1: to picture. But a sort of long term bond is

751
00:54:13,719 --> 00:54:17,560
Speaker 1: to me very logical. It's the way corporations finance. They don't.

752
00:54:17,640 --> 00:54:21,239
Speaker 1: They don't finance a new corporation with one with one

753
00:54:21,320 --> 00:54:26,520
Speaker 1: year paper. They don't finance a new building, a new

754
00:54:26,560 --> 00:54:30,520
Speaker 1: factory with one year paper. They normally take a longer

755
00:54:30,640 --> 00:54:34,480
Speaker 1: term picture. They build. They build a factory today and

756
00:54:34,480 --> 00:54:36,919
Speaker 1: then pay for it over a period of time when

757
00:54:36,960 --> 00:54:40,520
Speaker 1: it starts increasing its returns, and they blame them the

758
00:54:40,600 --> 00:54:43,520
Speaker 1: service the debt. We have to look at at the

759
00:54:43,520 --> 00:54:45,840
Speaker 1: government in the same way, and that is and the

760
00:54:45,840 --> 00:54:48,400
Speaker 1: Biden administration I think, is doing this, and that is

761
00:54:48,480 --> 00:54:53,560
Speaker 1: the big bulk of the infrastructure building will take place

762
00:54:53,640 --> 00:54:57,759
Speaker 1: in the next few years, and the repayment period will

763
00:54:57,800 --> 00:55:02,640
Speaker 1: be of a much longer durace ten years, fifteen years,

764
00:55:02,640 --> 00:55:07,040
Speaker 1: twenty years, something like that. Whichever, however, the Treasury decides

765
00:55:07,120 --> 00:55:10,680
Speaker 1: to structure the bonds but I do think that the

766
00:55:10,800 --> 00:55:14,239
Speaker 1: point that we're both trying to get at is we

767
00:55:14,880 --> 00:55:18,080
Speaker 1: have a chance now to borrow long term at low

768
00:55:18,160 --> 00:55:21,400
Speaker 1: rates and build a strong economy which will create a

769
00:55:21,440 --> 00:55:26,040
Speaker 1: lot of jobs for future generations. And if the economy,

770
00:55:26,239 --> 00:55:29,800
Speaker 1: as I believe it will, is strengthened by this infrastructure,

771
00:55:30,640 --> 00:55:34,680
Speaker 1: it will leave opportunities for additional growth and make it

772
00:55:34,680 --> 00:55:38,360
Speaker 1: easier to repay the debt. So we have to think ahead.

773
00:55:38,920 --> 00:55:41,560
Speaker 1: I mean, one of the things that we go back

774
00:55:41,560 --> 00:55:44,920
Speaker 1: to China, we had teat them and to spend a

775
00:55:44,960 --> 00:55:46,960
Speaker 1: lot of time trying to think ahead and what's going

776
00:55:47,000 --> 00:55:49,000
Speaker 1: to happen now and what's going to happen in the future.

777
00:55:50,400 --> 00:55:54,040
Speaker 1: One thing when you think about China is we're not

778
00:55:54,120 --> 00:55:58,000
Speaker 1: just competing with the China of today. We're competing with

779
00:55:58,239 --> 00:56:02,919
Speaker 1: a four thousand year old civilization and they are used

780
00:56:02,920 --> 00:56:08,560
Speaker 1: to thinking long term. Um they and what they're doing

781
00:56:08,600 --> 00:56:12,160
Speaker 1: now is they're they're they're spending money today on infrastructure,

782
00:56:12,800 --> 00:56:16,520
Speaker 1: not just for the current generation, but for generations to come.

783
00:56:17,080 --> 00:56:19,279
Speaker 1: We have to have a strategy that is not just

784
00:56:19,800 --> 00:56:24,440
Speaker 1: focused or preoccupied with what happens today. It's what are

785
00:56:24,480 --> 00:56:28,200
Speaker 1: we doing to make the economy stronger in the future.

786
00:56:28,239 --> 00:56:32,880
Speaker 1: What are we doing to build up UH job capabilities

787
00:56:32,920 --> 00:56:36,759
Speaker 1: for people who have lost their jobs over the long term,

788
00:56:36,920 --> 00:56:41,200
Speaker 1: And that's what UM infrastructure will do. UM. We can

789
00:56:42,239 --> 00:56:45,160
Speaker 1: be a much stronger economy five years from now if

790
00:56:45,160 --> 00:56:48,719
Speaker 1: we invest today in the roads and the and the bridges,

791
00:56:49,000 --> 00:56:52,759
Speaker 1: and the airports and the trains and the and the

792
00:56:53,040 --> 00:56:56,880
Speaker 1: telecommunications infrastructure, all of which will make us more competitive,

793
00:56:57,360 --> 00:57:00,600
Speaker 1: creating jobs today and making us more competitive not just

794
00:57:00,760 --> 00:57:03,520
Speaker 1: for one year or two years, but for decades to come.

795
00:57:04,360 --> 00:57:08,600
Speaker 1: Eyes and our understood that the so called Greatest Generation,

796
00:57:09,320 --> 00:57:11,839
Speaker 1: and I believe it was a great generation that Tom

797
00:57:11,880 --> 00:57:15,719
Speaker 1: Brokaw wrote about the fifties and sixties. UM. They were

798
00:57:15,760 --> 00:57:19,160
Speaker 1: a great generation in part because of winning the war,

799
00:57:19,320 --> 00:57:22,400
Speaker 1: in part because of what they did after the war,

800
00:57:22,520 --> 00:57:25,720
Speaker 1: but in part because they left this country in a

801
00:57:25,840 --> 00:57:30,880
Speaker 1: much stronger financial and economic position and physician in the world.

802
00:57:31,840 --> 00:57:35,240
Speaker 1: Because of what they did. They fought ahead. And we

803
00:57:35,320 --> 00:57:37,080
Speaker 1: have to think ahead, We have to have a long

804
00:57:37,200 --> 00:57:41,880
Speaker 1: term perspective, and infrastructure is one of the critical ways

805
00:57:42,520 --> 00:57:46,080
Speaker 1: of not only thinking ahead but acting UM in a

806
00:57:46,160 --> 00:57:49,960
Speaker 1: bold way to make our country stronger and to create

807
00:57:50,000 --> 00:57:56,920
Speaker 1: a much UH stronger capability of creating jobs and demonstrating

808
00:57:57,600 --> 00:58:01,040
Speaker 1: our strength in the world, and a strong infrastructure program

809
00:58:01,040 --> 00:58:03,960
Speaker 1: would do that. So so let's stick with that generation.

810
00:58:04,280 --> 00:58:08,680
Speaker 1: Right after World War Two, the US implemented the Marshall Plan.

811
00:58:08,840 --> 00:58:11,960
Speaker 1: We helped to rebuild pretty much all of Europe. We

812
00:58:12,000 --> 00:58:17,120
Speaker 1: helped to re structure Japan and and create a platform

813
00:58:17,200 --> 00:58:22,440
Speaker 1: for them to rebuild their economy, and we saw decades

814
00:58:22,520 --> 00:58:26,800
Speaker 1: of unprecedented growth around the world. When I look at

815
00:58:26,880 --> 00:58:32,240
Speaker 1: the state of that sort of policy, the closest thing

816
00:58:32,320 --> 00:58:36,280
Speaker 1: I see to that is the China Built in Road initiative.

817
00:58:37,440 --> 00:58:41,480
Speaker 1: What sort of plans are there for a new martial plan?

818
00:58:43,080 --> 00:58:47,480
Speaker 1: Is the US participating on the global stage that way

819
00:58:47,600 --> 00:58:52,280
Speaker 1: or have we seeded that leadership role to China. Well,

820
00:58:52,320 --> 00:58:58,280
Speaker 1: it's certainly true that China is building in two ways. One,

821
00:58:58,640 --> 00:59:01,880
Speaker 1: if you look at the infrastr ructure within China, it's

822
00:59:01,880 --> 00:59:08,440
Speaker 1: it's remarkable. These fast trains and modern harbors and modern airports.

823
00:59:08,560 --> 00:59:13,320
Speaker 1: I mean, the the and the telecommunication system is remarkable.

824
00:59:13,320 --> 00:59:16,880
Speaker 1: They're rushing moving ahead toward five G and six G.

825
00:59:17,520 --> 00:59:19,280
Speaker 1: We've got to be doing that too. We've got to

826
00:59:19,360 --> 00:59:24,360
Speaker 1: be lead frogging the Chinese and developing our own capability

827
00:59:24,480 --> 00:59:26,560
Speaker 1: in say five GEN, which you can do with the

828
00:59:26,560 --> 00:59:33,560
Speaker 1: greater openness open radio access network around their various ways,

829
00:59:33,600 --> 00:59:37,520
Speaker 1: we can really move dramatically ahead. And five G we're

830
00:59:37,560 --> 00:59:42,440
Speaker 1: working on things like um quantum computing AI. These are

831
00:59:42,480 --> 00:59:46,720
Speaker 1: always and then I'd say it's can demonstrate a our

832
00:59:46,800 --> 00:59:51,920
Speaker 1: internal capability for technological advancement, but also our capability as

833
00:59:51,960 --> 00:59:55,720
Speaker 1: a competitive country vis v not just China, but other

834
00:59:55,760 --> 00:59:58,920
Speaker 1: countries that there are other countries that are competing very

835
00:59:59,040 --> 01:00:02,160
Speaker 1: rapidly as well. So I think we've we we we've

836
01:00:02,200 --> 01:00:04,800
Speaker 1: got to do that. I don't know the Belton Road

837
01:00:04,840 --> 01:00:10,560
Speaker 1: Initiative UM does help, particularly Southeast Asian and Central Asia.

838
01:00:11,200 --> 01:00:13,040
Speaker 1: I don't think we're going to get back to a

839
01:00:13,080 --> 01:00:16,120
Speaker 1: Marshall plan because I think the willingness to spend money

840
01:00:16,160 --> 01:00:21,640
Speaker 1: here UM it's really focused more on domestic than far

841
01:00:21,720 --> 01:00:25,000
Speaker 1: and but if we do well domestically, we will strengthen

842
01:00:25,000 --> 01:00:28,840
Speaker 1: our influence both in terms of a strong economy here

843
01:00:29,520 --> 01:00:33,480
Speaker 1: and do better abroad. I do think we're also working

844
01:00:33,520 --> 01:00:36,400
Speaker 1: more and more with the Japanese and working with other

845
01:00:36,440 --> 01:00:40,960
Speaker 1: countries and what's known as the Quad Australia, Japan, India,

846
01:00:41,000 --> 01:00:45,360
Speaker 1: and the United States to help build up infrastructure in

847
01:00:45,360 --> 01:00:48,840
Speaker 1: in Southeast Asia and elsewhere. But I suspect that the

848
01:00:48,920 --> 01:00:53,040
Speaker 1: main focus will be domestic and the other part of

849
01:00:53,040 --> 01:00:56,360
Speaker 1: the of the of the Martial Plan that was so

850
01:00:56,760 --> 01:00:59,080
Speaker 1: important was not just the money spent, but the fact

851
01:00:59,160 --> 01:01:03,640
Speaker 1: that it enabled the European countries to work together um

852
01:01:03,680 --> 01:01:05,520
Speaker 1: to figure out how to spend the money and to

853
01:01:05,640 --> 01:01:10,120
Speaker 1: cooperate more to prevent a war like we had just

854
01:01:10,200 --> 01:01:12,840
Speaker 1: been through in World War Two. And I think that

855
01:01:13,000 --> 01:01:17,280
Speaker 1: one of the keys to the success of the next

856
01:01:17,320 --> 01:01:21,440
Speaker 1: generation abroad will be countries like Osson and others working

857
01:01:21,440 --> 01:01:26,920
Speaker 1: together for joint cooperation on infrastructure. And the United States,

858
01:01:26,920 --> 01:01:29,400
Speaker 1: I think can play can play a role in that,

859
01:01:29,600 --> 01:01:31,400
Speaker 1: and that would be that would be a big plus.

860
01:01:31,800 --> 01:01:36,480
Speaker 1: So let's stay with domestic policy. The US, really since

861
01:01:36,520 --> 01:01:41,240
Speaker 1: Eisenhower hasn't had much of an industrial policy. We're seeing

862
01:01:41,400 --> 01:01:47,000
Speaker 1: some some inklings of that in the Binden administration, including

863
01:01:47,320 --> 01:01:51,040
Speaker 1: a bit of a push for an electric charging station

864
01:01:51,120 --> 01:01:56,440
Speaker 1: infrastructure for automobiles. What do you think of current lack

865
01:01:56,520 --> 01:01:59,959
Speaker 1: of industrial policy. Is that something that the US needs

866
01:02:00,040 --> 01:02:04,280
Speaker 1: to do to stay competitive with China. I think we

867
01:02:04,440 --> 01:02:08,560
Speaker 1: tend to look in industrial policy somewhat differently from some

868
01:02:08,680 --> 01:02:12,480
Speaker 1: of these other countries. But uh, the answer your question

869
01:02:12,520 --> 01:02:22,000
Speaker 1: would be, we need a fundamental h collaboration between American

870
01:02:22,040 --> 01:02:26,080
Speaker 1: companies and the US government, particularly in early stage research

871
01:02:26,160 --> 01:02:28,800
Speaker 1: and development. We've we used to put a lot of

872
01:02:28,800 --> 01:02:32,400
Speaker 1: money in the National Science Foundation, into the National Labs,

873
01:02:33,240 --> 01:02:38,840
Speaker 1: into DARPA, into the sort of energy version of DARPA.

874
01:02:39,480 --> 01:02:43,600
Speaker 1: So I do think that the that the Biden administration

875
01:02:43,840 --> 01:02:49,120
Speaker 1: is really working uh increasingly and I think quite effectively

876
01:02:49,200 --> 01:02:56,760
Speaker 1: towards a set of policies where the government supports industries

877
01:02:57,320 --> 01:03:02,880
Speaker 1: that are critically important to US, and particularly high technology industries,

878
01:03:03,600 --> 01:03:08,800
Speaker 1: but also other other companies like semiconductors where we have

879
01:03:09,280 --> 01:03:13,480
Speaker 1: UM where we're going to need to make continue to

880
01:03:13,520 --> 01:03:18,680
Speaker 1: make advancements in semiconductors to compete with various countries. If

881
01:03:18,760 --> 01:03:21,080
Speaker 1: you if you look around the world, as I say,

882
01:03:21,120 --> 01:03:25,360
Speaker 1: it's not just China, it's Taiwan with Taiwan Semiconductor, it's

883
01:03:25,480 --> 01:03:28,880
Speaker 1: UM Korea and its other countries that are that are

884
01:03:28,920 --> 01:03:36,760
Speaker 1: advancing pretty rapidly on on stomach conductors. So what we

885
01:03:36,800 --> 01:03:41,320
Speaker 1: need to do, I think is put money, and I

886
01:03:41,360 --> 01:03:45,720
Speaker 1: think this infrastructure program will do that. Put money, working

887
01:03:45,840 --> 01:03:50,680
Speaker 1: with the private sector into advancements in various types of

888
01:03:50,720 --> 01:03:55,600
Speaker 1: technology and various types of infrastructure which could be helpful

889
01:03:55,600 --> 01:03:58,680
Speaker 1: in getting the government more active. We did. It worked

890
01:03:58,760 --> 01:04:02,520
Speaker 1: quite well in the fifties where the government did play

891
01:04:02,520 --> 01:04:06,280
Speaker 1: a great role in a lot of new technologies sprung

892
01:04:06,520 --> 01:04:10,640
Speaker 1: from government collaboration with companies. And I think the government

893
01:04:10,680 --> 01:04:14,600
Speaker 1: now needs to find new ways of collaborating with companies

894
01:04:15,160 --> 01:04:20,760
Speaker 1: in an advanced areas of technology and infrastructure. And and

895
01:04:21,360 --> 01:04:28,160
Speaker 1: I think that will happen if a bill, an infrastructure

896
01:04:28,160 --> 01:04:30,840
Speaker 1: bill of the kind they're talking about, is passed. I

897
01:04:30,880 --> 01:04:33,840
Speaker 1: think it does. We haven't had this for a long time,

898
01:04:33,880 --> 01:04:36,560
Speaker 1: As you correctly point out, this would be the chance

899
01:04:36,600 --> 01:04:42,520
Speaker 1: to do it. So, speaking of government and high tech companies,

900
01:04:43,320 --> 01:04:47,240
Speaker 1: I was kind of surprised by China's crackdown on on

901
01:04:47,320 --> 01:04:51,600
Speaker 1: their own tech companies and leadership. What do you make

902
01:04:51,640 --> 01:04:54,560
Speaker 1: of that? It's it's been about a hundred and fifty

903
01:04:54,600 --> 01:04:58,080
Speaker 1: billion dollars in market cap lost in the US of

904
01:04:58,360 --> 01:05:02,120
Speaker 1: China companies listed here, and some people have bullpart died

905
01:05:02,240 --> 01:05:08,280
Speaker 1: at about a trillion dollars potentially in a shares in China.

906
01:05:08,680 --> 01:05:11,400
Speaker 1: What are we to make of this? Well, I think

907
01:05:11,440 --> 01:05:13,480
Speaker 1: it's hard to know exactly what to make of it

908
01:05:13,560 --> 01:05:18,400
Speaker 1: at this point. UM and I study China pretty carefully,

909
01:05:18,440 --> 01:05:23,880
Speaker 1: and I would find it awfully hard to analyze what

910
01:05:25,200 --> 01:05:28,800
Speaker 1: the government's doing and what the purposes are of some

911
01:05:28,880 --> 01:05:32,840
Speaker 1: of the measures they have taken. I would simply make

912
01:05:33,080 --> 01:05:37,560
Speaker 1: two to one this is something that's going on in

913
01:05:37,600 --> 01:05:41,680
Speaker 1: the in the short term. We have to see whether

914
01:05:41,760 --> 01:05:46,240
Speaker 1: it's a continuous process or just being done over the

915
01:05:46,560 --> 01:05:51,520
Speaker 1: over the short term. And second, UM, the government of

916
01:05:51,600 --> 01:06:00,440
Speaker 1: China does have a strong sense of national champions, and

917
01:06:00,680 --> 01:06:04,200
Speaker 1: I think that if you look at the way China

918
01:06:04,240 --> 01:06:09,400
Speaker 1: has developed vias national champions, these big companies have a

919
01:06:09,480 --> 01:06:14,440
Speaker 1: lot of collaboration with the Communist Party of China. There's

920
01:06:14,520 --> 01:06:22,800
Speaker 1: normally representative of of the CPCC um UM the Communist

921
01:06:22,880 --> 01:06:31,080
Speaker 1: Party of China rating in these companies, and there are

922
01:06:32,160 --> 01:06:37,360
Speaker 1: probably going to be UM there. I think there's a

923
01:06:37,800 --> 01:06:41,040
Speaker 1: need really to wait and see what's happening in China

924
01:06:41,120 --> 01:06:45,480
Speaker 1: before we come to any long term conclusions. So I'm

925
01:06:46,800 --> 01:06:50,560
Speaker 1: really looking at this as as something that could well

926
01:06:50,600 --> 01:06:52,640
Speaker 1: be a short term thing, and I wouldn't make any

927
01:06:52,680 --> 01:06:56,080
Speaker 1: long term judgments. But this means because there is still

928
01:06:56,120 --> 01:07:01,800
Speaker 1: a strong government support for innovation and UM and UH,

929
01:07:01,800 --> 01:07:04,400
Speaker 1: it probably it's going to is going to continue. I

930
01:07:04,440 --> 01:07:08,240
Speaker 1: don't know how long this current sauda is going to last.

931
01:07:08,760 --> 01:07:12,000
Speaker 1: So when China first started doing this, I think it

932
01:07:12,000 --> 01:07:15,960
Speaker 1: was last October or November. With Jack ma of Ali

933
01:07:16,040 --> 01:07:21,439
Speaker 1: Baba clearly a national champion in China, people thought, hey,

934
01:07:21,480 --> 01:07:23,840
Speaker 1: maybe this is a one off and Jack just got

935
01:07:23,880 --> 01:07:27,760
Speaker 1: a little too big first bridges and China sending a

936
01:07:27,880 --> 01:07:32,480
Speaker 1: warning shot. But it seems to be pretty aggressive across

937
01:07:32,560 --> 01:07:36,600
Speaker 1: the board. Uh. It makes me wonder if if is

938
01:07:36,720 --> 01:07:41,080
Speaker 1: China uninvestable, if you're not a Chinese citizen, can you

939
01:07:41,200 --> 01:07:44,600
Speaker 1: as an outsider, as an American, put capital at risk

940
01:07:44,640 --> 01:07:48,360
Speaker 1: in a country that doesn't seem to have the same

941
01:07:49,080 --> 01:07:54,080
Speaker 1: sanctity of private property either contract laws, rule of law

942
01:07:54,160 --> 01:07:58,919
Speaker 1: in general? How can an outsider invest in China with

943
01:07:59,160 --> 01:08:05,439
Speaker 1: such a different set of experiences around private property. Well,

944
01:08:05,480 --> 01:08:07,760
Speaker 1: this is the area where we have to wait and see.

945
01:08:07,800 --> 01:08:11,280
Speaker 1: Because they have been if you read the speeches of

946
01:08:12,800 --> 01:08:20,839
Speaker 1: President she and others, there is still a strong narrative

947
01:08:21,160 --> 01:08:27,519
Speaker 1: of getting foreign companies to invest in China. Um they

948
01:08:27,520 --> 01:08:30,880
Speaker 1: have they have really not said that they don't want

949
01:08:30,920 --> 01:08:34,280
Speaker 1: foreigners to invest in China, and in fact they're trying

950
01:08:34,400 --> 01:08:39,520
Speaker 1: to get more foreign companies too to invest in China.

951
01:08:39,720 --> 01:08:45,000
Speaker 1: So I hesitate to try to make judgments now about

952
01:08:45,040 --> 01:08:48,160
Speaker 1: what China is going to look like a year from

953
01:08:48,200 --> 01:08:50,519
Speaker 1: now or two years from now in terms of its

954
01:08:50,560 --> 01:08:55,759
Speaker 1: relationship with Chinese companies or foreign companies operating in China.

955
01:08:55,800 --> 01:09:01,160
Speaker 1: I think China, as we were discussing earlier, has it

956
01:09:01,439 --> 01:09:06,679
Speaker 1: takes a long term view of virtually any anything and everything.

957
01:09:06,720 --> 01:09:10,960
Speaker 1: They're not they're not necessarily in most cases, short term players.

958
01:09:10,960 --> 01:09:12,960
Speaker 1: They have a medium or a long term view. So

959
01:09:13,560 --> 01:09:17,840
Speaker 1: I hesitate to jump to any conclusions along the lines

960
01:09:17,920 --> 01:09:21,080
Speaker 1: of whether it's going to be a year from now

961
01:09:21,120 --> 01:09:24,040
Speaker 1: an attractive place to invest or two years from now.

962
01:09:25,280 --> 01:09:29,040
Speaker 1: I don't know, uh and but I but I do

963
01:09:29,240 --> 01:09:33,479
Speaker 1: think that they understand two things. One that they do

964
01:09:33,680 --> 01:09:38,680
Speaker 1: want to become more self dependent on certain kinds of

965
01:09:38,720 --> 01:09:44,120
Speaker 1: technology and certain kinds of companies they're putting, for instance,

966
01:09:44,160 --> 01:09:48,639
Speaker 1: and semiconductors. They're putting a lot of money into semi inductors.

967
01:09:48,680 --> 01:09:50,639
Speaker 1: They're putting a lot of money, as we've just seen

968
01:09:50,720 --> 01:09:56,120
Speaker 1: in the news, into AI for instance. UM So they

969
01:09:56,160 --> 01:10:00,600
Speaker 1: want they don't want to be vulnerable to eruptions and

970
01:10:00,680 --> 01:10:05,280
Speaker 1: supply for whatever reason from other countries. On the other hand,

971
01:10:05,320 --> 01:10:10,519
Speaker 1: there is not in China a blanket. Um. They don't

972
01:10:10,600 --> 01:10:14,439
Speaker 1: They don't like the I D coupling because they are

973
01:10:15,360 --> 01:10:21,000
Speaker 1: in general because they are heavily dependent on foreign energy

974
01:10:21,040 --> 01:10:25,680
Speaker 1: and foreign food and certain kinds of other foreign products.

975
01:10:26,160 --> 01:10:28,320
Speaker 1: And they want to be able their companies want to

976
01:10:28,360 --> 01:10:32,880
Speaker 1: be able to sell abroad. Um so. And and also

977
01:10:33,760 --> 01:10:38,280
Speaker 1: they do have, and have had for quite some time,

978
01:10:39,320 --> 01:10:41,960
Speaker 1: a desire to attract foreign capital. They've been a one

979
01:10:42,000 --> 01:10:45,559
Speaker 1: American financial firms to operate to a much greater degree

980
01:10:45,600 --> 01:10:49,280
Speaker 1: in China, and they want some of their companies to

981
01:10:49,320 --> 01:10:53,040
Speaker 1: be able to invest more or produce more in the

982
01:10:53,120 --> 01:10:56,680
Speaker 1: United States as they as they globalize. So there are

983
01:10:56,920 --> 01:11:01,920
Speaker 1: different strains of of of thinking an action taking place

984
01:11:01,960 --> 01:11:06,200
Speaker 1: in China. Uh So, I don't think we can simply

985
01:11:06,720 --> 01:11:09,640
Speaker 1: come to one conclusion about what China is going to

986
01:11:09,720 --> 01:11:12,360
Speaker 1: do a year from now, or two years from an

987
01:11:12,360 --> 01:11:15,479
Speaker 1: hour or six months from now. So my preference is,

988
01:11:15,600 --> 01:11:19,599
Speaker 1: having observed China and also observed what they're doing and

989
01:11:19,680 --> 01:11:24,519
Speaker 1: have done over the last several years and months, is

990
01:11:24,640 --> 01:11:28,480
Speaker 1: to wait and see before growing any long term conclusions.

991
01:11:29,479 --> 01:11:32,400
Speaker 1: Quite fascinating, I know, I only have you for a

992
01:11:32,400 --> 01:11:36,120
Speaker 1: certain amount of time. So let's jump to our favorite

993
01:11:36,200 --> 01:11:40,760
Speaker 1: questions that we ask all our guests, starting with tell

994
01:11:40,840 --> 01:11:44,240
Speaker 1: us what you were streaming during lockdown? What was keeping

995
01:11:44,240 --> 01:11:49,840
Speaker 1: you entertained on Netflix or Amazon Prime or whatever. Well,

996
01:11:50,600 --> 01:11:55,600
Speaker 1: during lockdown, I was I was actually I mean I

997
01:11:55,760 --> 01:11:58,840
Speaker 1: and my colleagues that teetam and we're doing a lot

998
01:11:58,960 --> 01:12:03,639
Speaker 1: with our client and trying to um keep keep up

999
01:12:03,640 --> 01:12:08,719
Speaker 1: relations with them through zoom and phone calls and other things.

1000
01:12:08,720 --> 01:12:12,400
Speaker 1: So I was really a sort of a zoom. I

1001
01:12:12,479 --> 01:12:15,400
Speaker 1: was in a way glued to zoom for part of

1002
01:12:15,400 --> 01:12:23,800
Speaker 1: the time. UM. What I have done, UM and my

1003
01:12:23,840 --> 01:12:26,000
Speaker 1: wife and I as the result of the end of

1004
01:12:26,000 --> 01:12:28,479
Speaker 1: the day trying to relax a little bit, is to

1005
01:12:30,520 --> 01:12:33,479
Speaker 1: UM before we go to bed, watch a movie or

1006
01:12:33,680 --> 01:12:38,880
Speaker 1: an old sitcom or something like that. UM sort of

1007
01:12:39,880 --> 01:12:42,360
Speaker 1: peacefully in the day in a in a more in

1008
01:12:42,360 --> 01:12:45,240
Speaker 1: a more normal way. So those are the those are

1009
01:12:45,240 --> 01:12:48,439
Speaker 1: the kinds of things that that I have been doing.

1010
01:12:48,800 --> 01:12:53,599
Speaker 1: And I've tried during lockdown to stay in touch with

1011
01:12:53,800 --> 01:12:58,040
Speaker 1: friends and with colleagues and with people in other countries

1012
01:12:58,120 --> 01:13:00,840
Speaker 1: and see how they're doing. I think one of the

1013
01:13:00,880 --> 01:13:05,720
Speaker 1: things about lockdown is that you were dep physical interperson

1014
01:13:05,840 --> 01:13:10,800
Speaker 1: relations with other people. But the one thing I concluded

1015
01:13:10,960 --> 01:13:16,120
Speaker 1: was the more conversations you have with with friends and colleagues, um,

1016
01:13:16,760 --> 01:13:20,200
Speaker 1: people you work with, or friends you know and have

1017
01:13:20,360 --> 01:13:23,120
Speaker 1: known over the years, that you're you're keeping up that

1018
01:13:23,720 --> 01:13:27,920
Speaker 1: those human relationships, which to me were very important. And

1019
01:13:28,000 --> 01:13:31,559
Speaker 1: now that things are becoming a little bit more normal

1020
01:13:32,200 --> 01:13:36,680
Speaker 1: in some cases a lot more normal, um, individual relationships

1021
01:13:37,240 --> 01:13:40,400
Speaker 1: mean mean more and more. So those are the kinds

1022
01:13:40,400 --> 01:13:45,680
Speaker 1: of things I did did during lockdown. Very interesting. Tell

1023
01:13:45,760 --> 01:13:49,600
Speaker 1: us about your mentors. We obviously know some of the

1024
01:13:49,640 --> 01:13:55,240
Speaker 1: bigger names, but who helped shape your career, Well, that's

1025
01:13:55,680 --> 01:14:02,760
Speaker 1: that's interesting And I always, um think when ever anything

1026
01:14:02,880 --> 01:14:07,200
Speaker 1: good happens, I always think that I really owe a

1027
01:14:07,280 --> 01:14:12,639
Speaker 1: lot um to the mentors I had. Starting from when

1028
01:14:12,640 --> 01:14:16,200
Speaker 1: I was in college and graduate school, I had two

1029
01:14:16,280 --> 01:14:20,000
Speaker 1: or three teachers who I always was sort of turned

1030
01:14:20,000 --> 01:14:25,360
Speaker 1: to for advice and wisdom and friendship. When I started

1031
01:14:25,439 --> 01:14:30,080
Speaker 1: working in the government, Kissinger was a mentor, Brent Skullcroft

1032
01:14:30,360 --> 01:14:38,240
Speaker 1: was a mentor. Hensinger um and big Bridsinski were both

1033
01:14:38,280 --> 01:14:41,080
Speaker 1: heads of the National Security Council staff, and as was

1034
01:14:41,880 --> 01:14:45,639
Speaker 1: as was Scullcroft, and they were all they were all

1035
01:14:45,920 --> 01:14:49,080
Speaker 1: in various ways mentors. And then there were a number

1036
01:14:49,120 --> 01:14:52,920
Speaker 1: of people who were, uh, not necessarily at such a

1037
01:14:53,040 --> 01:14:57,920
Speaker 1: high level, but I had a lot of good friends

1038
01:14:57,920 --> 01:15:00,639
Speaker 1: who when I was working as a june your person,

1039
01:15:01,560 --> 01:15:04,240
Speaker 1: a summer intern in the state department or intern in

1040
01:15:04,320 --> 01:15:08,639
Speaker 1: Germany or elsewhere, I could turn to and they were

1041
01:15:09,000 --> 01:15:15,680
Speaker 1: you know, desk officers or assistant secretaries or deputy assistant secretaries.

1042
01:15:15,760 --> 01:15:18,400
Speaker 1: The people you could sit down and say, look, I've

1043
01:15:18,400 --> 01:15:21,599
Speaker 1: got an issue here, I've got something that's on my mind.

1044
01:15:21,720 --> 01:15:25,559
Speaker 1: I'd like to get your advice. And I think the

1045
01:15:25,600 --> 01:15:30,439
Speaker 1: thing I gave a commencement speech at UCSD years ago,

1046
01:15:30,840 --> 01:15:34,600
Speaker 1: um and about five years ago, and the points I

1047
01:15:34,640 --> 01:15:39,799
Speaker 1: made was, people say, don't sweat the small stuff. Um.

1048
01:15:39,840 --> 01:15:45,200
Speaker 1: The theme of my speech was, yes, sweat the small stuff. Um.

1049
01:15:45,240 --> 01:15:48,560
Speaker 1: If you do well at what you're doing, whatever the

1050
01:15:48,680 --> 01:15:52,800
Speaker 1: job is, and it may seem very small, um, you're

1051
01:15:52,880 --> 01:15:54,720
Speaker 1: going to be People are going to say this, this

1052
01:15:54,760 --> 01:15:57,240
Speaker 1: person really cares about what they're doing, They care about

1053
01:15:57,240 --> 01:16:02,400
Speaker 1: their job, and it really helps you to credibility and

1054
01:16:03,160 --> 01:16:08,040
Speaker 1: momentum um and um a lot of a lot of

1055
01:16:08,160 --> 01:16:10,639
Speaker 1: and work with people, work with people as a team.

1056
01:16:10,680 --> 01:16:16,960
Speaker 1: You don't get anything done um alone in UM. In government,

1057
01:16:17,000 --> 01:16:20,120
Speaker 1: you need you need to have a team um of

1058
01:16:20,280 --> 01:16:25,120
Speaker 1: people working together, not just in your agency, but but

1059
01:16:25,280 --> 01:16:28,080
Speaker 1: all around the government and outside the government also, So

1060
01:16:29,160 --> 01:16:33,720
Speaker 1: I would I would often turn to various people who

1061
01:16:33,800 --> 01:16:38,320
Speaker 1: I knew or I'd worked with for advice and and mentorship,

1062
01:16:38,360 --> 01:16:41,479
Speaker 1: and that was to me very valuable. And I always

1063
01:16:41,479 --> 01:16:45,040
Speaker 1: think how generous they were to take their time for

1064
01:16:45,080 --> 01:16:47,400
Speaker 1: a young guy who has just come out of graduate

1065
01:16:47,400 --> 01:16:53,120
Speaker 1: school to help. I'm very very grateful to people like that,

1066
01:16:53,360 --> 01:16:57,200
Speaker 1: and and and in retrospect also I'm grateful I did

1067
01:16:57,200 --> 01:17:00,080
Speaker 1: some of the smaller things that for the moment it

1068
01:17:00,960 --> 01:17:06,880
Speaker 1: didn't seem particularly um interesting um or I didn't see

1069
01:17:06,880 --> 01:17:08,559
Speaker 1: what they were going to do for me. But over

1070
01:17:08,600 --> 01:17:12,479
Speaker 1: a period of time they have built UM. You build

1071
01:17:12,479 --> 01:17:17,720
Speaker 1: confidence in yourself by achieving things that are that are

1072
01:17:17,800 --> 01:17:21,800
Speaker 1: small in nature, and that enables you to have confidence

1073
01:17:21,840 --> 01:17:25,080
Speaker 1: that you can take on bigger things. I mean. One

1074
01:17:25,240 --> 01:17:28,679
Speaker 1: one example was when I was a summer intern in Germany.

1075
01:17:28,760 --> 01:17:32,200
Speaker 1: The this is still during the Cold War, and they

1076
01:17:32,200 --> 01:17:36,599
Speaker 1: were anxious that people use the autobon to drive from

1077
01:17:36,720 --> 01:17:39,880
Speaker 1: bond which was in the capital of West Germany, to Berlin.

1078
01:17:40,000 --> 01:17:42,640
Speaker 1: To preserve what they called Allied rights to use the

1079
01:17:42,680 --> 01:17:47,439
Speaker 1: Audubon and they really wasn't a very pleasant trip as

1080
01:17:47,479 --> 01:17:50,800
Speaker 1: you might imagine. So they said, are there any volunteers.

1081
01:17:50,800 --> 01:17:53,000
Speaker 1: I was a summer intern, and I said, yeah, I'll

1082
01:17:53,040 --> 01:17:55,040
Speaker 1: do it. So I would get they'd give you a

1083
01:17:55,080 --> 01:17:57,840
Speaker 1: little money for gas, and then you could go from

1084
01:17:58,320 --> 01:18:02,880
Speaker 1: Bond to West Berlin and it it enabled me to

1085
01:18:03,000 --> 01:18:07,280
Speaker 1: sort of understand the Cold War in ways traveling through

1086
01:18:07,520 --> 01:18:11,679
Speaker 1: East Germany um on an American paths so they didn't

1087
01:18:11,760 --> 01:18:15,960
Speaker 1: stop you, um and seeing what West Berlin looked like

1088
01:18:16,520 --> 01:18:19,160
Speaker 1: the wall, you could go into East Germany if you

1089
01:18:19,880 --> 01:18:23,639
Speaker 1: used your pass. So it was and when it came

1090
01:18:23,680 --> 01:18:27,679
Speaker 1: to working in Washington, I had a feel for how

1091
01:18:27,720 --> 01:18:30,599
Speaker 1: the Cold War was working, how it affected individuals. So

1092
01:18:31,600 --> 01:18:34,080
Speaker 1: doing the little things that other people may not want

1093
01:18:34,080 --> 01:18:36,160
Speaker 1: to do, and doing them well, or doing them with

1094
01:18:36,200 --> 01:18:39,680
Speaker 1: some interest in some enthusiasm really was very helpful to me.

1095
01:18:40,439 --> 01:18:43,679
Speaker 1: So and and and a number of people who were

1096
01:18:43,760 --> 01:18:46,639
Speaker 1: mentors said, oh, go do it. There will be something

1097
01:18:47,040 --> 01:18:48,760
Speaker 1: no one else is going to do it. Go do it,

1098
01:18:48,960 --> 01:18:53,800
Speaker 1: enjoy it, learn and and I did so. Um, I

1099
01:18:53,840 --> 01:18:58,240
Speaker 1: think you can you can almost always learn from someone

1100
01:18:58,280 --> 01:19:00,800
Speaker 1: else if you keep your ears open, your eyes open,

1101
01:19:01,400 --> 01:19:04,920
Speaker 1: and your willingness to interact. You can have mentors like

1102
01:19:05,040 --> 01:19:08,920
Speaker 1: a Kissinger or skull Croft or Braginsky, or you can

1103
01:19:09,000 --> 01:19:13,040
Speaker 1: have mentors who were uh in different levels, who are

1104
01:19:13,040 --> 01:19:15,479
Speaker 1: willing to spend time with you and teach you and

1105
01:19:15,520 --> 01:19:18,559
Speaker 1: help you learn. In those days, was the auto bon

1106
01:19:19,000 --> 01:19:22,800
Speaker 1: no speed limit? Were you were you able to well?

1107
01:19:23,880 --> 01:19:27,400
Speaker 1: It was This was the part of the autobon that

1108
01:19:27,560 --> 01:19:30,439
Speaker 1: was in Eastern Germany, so part of it was in

1109
01:19:30,520 --> 01:19:33,840
Speaker 1: West Germany, part in East Germany. But the there was

1110
01:19:33,920 --> 01:19:36,160
Speaker 1: no speed limit in East Germany. But the quality of

1111
01:19:36,200 --> 01:19:40,280
Speaker 1: the road was not so good. So um, you could

1112
01:19:40,520 --> 01:19:43,519
Speaker 1: you had no speed limit, but you didn't go to

1113
01:19:43,640 --> 01:19:48,120
Speaker 1: speed limit because there were a lot of potholes. Let's

1114
01:19:48,160 --> 01:19:50,160
Speaker 1: let's talk a little bit about books. What are some

1115
01:19:50,240 --> 01:19:55,800
Speaker 1: of your favorites and what are you reading right now? Uh? Um,

1116
01:19:55,840 --> 01:19:58,519
Speaker 1: what I'm reading right now, I'm reading more books about

1117
01:19:58,560 --> 01:20:01,240
Speaker 1: the future. That There's one book called The Future Is

1118
01:20:01,280 --> 01:20:05,679
Speaker 1: Coming Faster Than You Think, which which documents a lot

1119
01:20:05,720 --> 01:20:09,160
Speaker 1: of the changes that are going on and in in

1120
01:20:09,600 --> 01:20:13,360
Speaker 1: various tech areas of technology. I've just read a very

1121
01:20:13,400 --> 01:20:18,480
Speaker 1: interesting book called The Queen and the Sultan about relations

1122
01:20:18,560 --> 01:20:23,639
Speaker 1: between Britain and Inland at that point and the Middle

1123
01:20:23,680 --> 01:20:28,040
Speaker 1: East UM in under the reign of Queen Elizabeth the First,

1124
01:20:28,640 --> 01:20:32,160
Speaker 1: which is a very interesting history of of the Middle

1125
01:20:32,280 --> 01:20:37,600
Speaker 1: of Middle Eastern European or British relations UM. I have

1126
01:20:38,880 --> 01:20:42,719
Speaker 1: been reading a lot of American history, documentary American history

1127
01:20:43,320 --> 01:20:48,719
Speaker 1: UM Ulysses Grants memoirs which are fascinating and beautifully written.

1128
01:20:49,479 --> 01:20:55,880
Speaker 1: I read a wonderful book on Eisenhower and Marshall called

1129
01:20:55,920 --> 01:21:01,080
Speaker 1: Partners in War. Another book on the debate ongoing debatis

1130
01:21:01,120 --> 01:21:04,120
Speaker 1: to whether we should engage in World War Two between

1131
01:21:04,880 --> 01:21:08,720
Speaker 1: Franklin Roosevelt and Charles Lindberg, where Lindbergh was sort of

1132
01:21:08,760 --> 01:21:13,120
Speaker 1: the icon of the isolationists and Roosevelt was trying to

1133
01:21:13,120 --> 01:21:16,759
Speaker 1: get America prepared for for a war that he thought

1134
01:21:16,800 --> 01:21:19,559
Speaker 1: was coming, but America was not after World War One

1135
01:21:20,160 --> 01:21:22,479
Speaker 1: in a move to spend a lot of money and

1136
01:21:22,560 --> 01:21:25,519
Speaker 1: prepare itself for World War Two. Those are the Those

1137
01:21:25,560 --> 01:21:28,880
Speaker 1: are the are the are the books I've I've read

1138
01:21:29,160 --> 01:21:34,559
Speaker 1: UM last one of Those Angry Days, Yes, those Angry Days.

1139
01:21:36,280 --> 01:21:39,439
Speaker 1: That was That was exactly the title of the book, UM.

1140
01:21:39,479 --> 01:21:43,439
Speaker 1: And it was fascinating because a lot of the arguments

1141
01:21:43,479 --> 01:21:46,160
Speaker 1: that were used during those days are used now for

1142
01:21:47,360 --> 01:21:54,160
Speaker 1: UH internationalism versus intense nationalism. Yes, and the Queen and

1143
01:21:54,160 --> 01:21:56,839
Speaker 1: the Sultan is very interesting because I had no idea

1144
01:21:56,880 --> 01:22:00,320
Speaker 1: how much how close relations between Britain and the Middle

1145
01:22:00,360 --> 01:22:05,400
Speaker 1: East were, particularly the Ottoman Empire were during those days. UM.

1146
01:22:05,439 --> 01:22:09,439
Speaker 1: So it was it was very interesting. And I'm also

1147
01:22:09,520 --> 01:22:15,599
Speaker 1: trying to read more and more UM about how other

1148
01:22:15,760 --> 01:22:21,120
Speaker 1: societies have UM dealt with their internal issues health, health,

1149
01:22:21,120 --> 01:22:24,400
Speaker 1: societies change, because I think the United States is going

1150
01:22:24,439 --> 01:22:29,439
Speaker 1: to have to spend a lot more time addressing UM,

1151
01:22:29,560 --> 01:22:35,240
Speaker 1: this sort of angry partisanship that is emerging, UM, dealing

1152
01:22:35,320 --> 01:22:42,840
Speaker 1: with UM a number of inequities in our society. UM.

1153
01:22:42,960 --> 01:22:45,920
Speaker 1: So I'm sort of reading about how other societies have

1154
01:22:46,160 --> 01:22:49,280
Speaker 1: done this. Give us a title that it might be

1155
01:22:49,320 --> 01:22:51,880
Speaker 1: an example of that, or is clean and the Sultan

1156
01:22:52,160 --> 01:22:55,720
Speaker 1: one of those, Well, the Queen the Sultan is one

1157
01:22:55,760 --> 01:22:58,840
Speaker 1: of those, although that was more about Arabs and that

1158
01:22:58,960 --> 01:23:06,240
Speaker 1: more were about ut Ottomans and UM and England. But

1159
01:23:06,520 --> 01:23:11,679
Speaker 1: on in terms of internal relations. UM. It's mostly articles

1160
01:23:11,800 --> 01:23:15,200
Speaker 1: in for instance, The Atlantic and and and other magazines

1161
01:23:15,960 --> 01:23:19,040
Speaker 1: that are looking at some of these more contemporary issues.

1162
01:23:19,760 --> 01:23:23,479
Speaker 1: Really interesting stuff. What sort of advice would you give

1163
01:23:23,560 --> 01:23:26,240
Speaker 1: to a recent college grad who was interested in a

1164
01:23:26,360 --> 01:23:36,080
Speaker 1: career in either finance or international relations. Well, first of all,

1165
01:23:36,280 --> 01:23:39,280
Speaker 1: you're you're not going to this sort of goes back

1166
01:23:39,280 --> 01:23:41,720
Speaker 1: to the commencement address I gave. You're not going to

1167
01:23:41,800 --> 01:23:45,759
Speaker 1: remake the world in your first job. So spend time

1168
01:23:46,160 --> 01:23:50,920
Speaker 1: learning learning in two ways. One is learning about the

1169
01:23:50,960 --> 01:23:55,639
Speaker 1: subject that you're dealing with, and you've learned and most

1170
01:23:55,640 --> 01:23:58,880
Speaker 1: people picked up a lot of knowledge from universities or

1171
01:23:58,880 --> 01:24:03,760
Speaker 1: grad schools UM. And second, develop a a group of

1172
01:24:03,800 --> 01:24:09,800
Speaker 1: friends and colleagues who you can work with, who you

1173
01:24:09,840 --> 01:24:14,719
Speaker 1: can develop teamwork with, because, as I mentioned earlier, things

1174
01:24:14,720 --> 01:24:19,880
Speaker 1: are done by by teams and and UM and the

1175
01:24:19,920 --> 01:24:24,559
Speaker 1: more people you work with, the better your outcome is

1176
01:24:24,600 --> 01:24:28,960
Speaker 1: going to be. And you're also building relationships now and

1177
01:24:29,000 --> 01:24:31,200
Speaker 1: for the for the future that are going to Then

1178
01:24:31,320 --> 01:24:34,439
Speaker 1: I have friends today who I got to know in

1179
01:24:34,479 --> 01:24:38,000
Speaker 1: my twenties working in the government, and friends who I

1180
01:24:38,000 --> 01:24:43,639
Speaker 1: got to know in my thirties working in the financial world.

1181
01:24:43,720 --> 01:24:49,200
Speaker 1: So I think that those than the education, the teamwork

1182
01:24:49,920 --> 01:24:55,840
Speaker 1: that you teamwork skills you've developed, and the UM and

1183
01:24:55,880 --> 01:24:59,519
Speaker 1: the and the long term friendships and interactions that you've

1184
01:24:59,560 --> 01:25:04,080
Speaker 1: developed are extremely important. I've I find them true for me.

1185
01:25:04,240 --> 01:25:09,559
Speaker 1: I've i've I've valued them enormously, UM, and I think

1186
01:25:09,600 --> 01:25:16,400
Speaker 1: those with respect to specific jobs, I regarded the summer

1187
01:25:16,439 --> 01:25:20,960
Speaker 1: intern program in Washington as a great way of learning.

1188
01:25:21,000 --> 01:25:24,479
Speaker 1: You start out at the lowest possible level, but you're

1189
01:25:24,520 --> 01:25:28,080
Speaker 1: working with a number of people, and you learn about

1190
01:25:28,840 --> 01:25:31,519
Speaker 1: the State Department. You learn about what's going on in

1191
01:25:31,560 --> 01:25:35,200
Speaker 1: Germany from being an intern in Germany, or what other

1192
01:25:35,280 --> 01:25:41,160
Speaker 1: countries you you might be visiting or working in. And UM,

1193
01:25:41,200 --> 01:25:44,240
Speaker 1: if you're in the financial world, start out at you

1194
01:25:44,320 --> 01:25:47,680
Speaker 1: start at at a low level. You're an analyst, and

1195
01:25:47,800 --> 01:25:49,880
Speaker 1: you build from being an analyst. A lot of the

1196
01:25:49,920 --> 01:25:53,960
Speaker 1: people who run big firms today, we're analysts or runners

1197
01:25:55,040 --> 01:25:59,479
Speaker 1: running stock certificates from one company to another. You had

1198
01:25:59,600 --> 01:26:03,840
Speaker 1: took and did well in low level jobs and developed friendships,

1199
01:26:04,439 --> 01:26:09,559
Speaker 1: develop respect from others, and built from that. So, UM,

1200
01:26:09,600 --> 01:26:13,000
Speaker 1: you're not going to remake the world. At least I

1201
01:26:13,040 --> 01:26:17,719
Speaker 1: wasn't about to remake the world from from the beginning, UM,

1202
01:26:17,760 --> 01:26:21,000
Speaker 1: but I was determined to learn as much as I

1203
01:26:21,040 --> 01:26:28,120
Speaker 1: could so that I, UM would be able to contribute

1204
01:26:28,960 --> 01:26:33,639
Speaker 1: and learn and do other jobs as as my career.

1205
01:26:33,920 --> 01:26:36,800
Speaker 1: As my career advanced, and I would have a lot

1206
01:26:36,840 --> 01:26:40,200
Speaker 1: of friends who I could count on to talk to

1207
01:26:40,200 --> 01:26:44,000
Speaker 1: to get their perspectives as as I developed. There's a

1208
01:26:44,120 --> 01:26:47,040
Speaker 1: very good story in the book I mentioned partners in

1209
01:26:47,120 --> 01:26:51,640
Speaker 1: war Marshall and Eisenhower, where Marshall he didn't go to

1210
01:26:51,640 --> 01:26:54,439
Speaker 1: West Point. He went to v M I UM, So

1211
01:26:54,520 --> 01:26:57,320
Speaker 1: he didn't have the advantage of knowing of having the

1212
01:26:57,360 --> 01:27:02,400
Speaker 1: West Point club that that that those who went to

1213
01:27:02,439 --> 01:27:07,000
Speaker 1: West Point you had when they graduated, like MacArthur and others.

1214
01:27:07,040 --> 01:27:09,400
Speaker 1: But what he did do was, as he advanced in

1215
01:27:09,520 --> 01:27:13,160
Speaker 1: his career, kept a little book UM and he wrote

1216
01:27:13,160 --> 01:27:16,680
Speaker 1: down the names of people who he was impressed by,

1217
01:27:16,720 --> 01:27:19,960
Speaker 1: because at some point he made the decision that he

1218
01:27:20,040 --> 01:27:24,160
Speaker 1: was destined for future leadership of some kind. I don't

1219
01:27:24,200 --> 01:27:26,760
Speaker 1: think he necessarily envisaged that he was going to be

1220
01:27:26,800 --> 01:27:31,200
Speaker 1: the the main presidential advisor for World War Two, but

1221
01:27:31,280 --> 01:27:34,519
Speaker 1: he did anticipate that his career was going to advance.

1222
01:27:35,040 --> 01:27:37,639
Speaker 1: So he kept the names of people he was impressed by,

1223
01:27:37,680 --> 01:27:41,000
Speaker 1: and when he got higher and higher level jobs, he

1224
01:27:41,080 --> 01:27:45,320
Speaker 1: would call those people that he had met and they were,

1225
01:27:45,640 --> 01:27:49,479
Speaker 1: you know, strewn throughout the country in various military bases

1226
01:27:49,920 --> 01:27:51,960
Speaker 1: and call them and bring them to Washington and have

1227
01:27:52,040 --> 01:27:55,799
Speaker 1: them beyond his staff so or call them for their advice.

1228
01:27:56,520 --> 01:28:01,720
Speaker 1: So he understood the notion of the looking teamwork very

1229
01:28:01,840 --> 01:28:05,760
Speaker 1: very intriguing. And our final question, tell us what you

1230
01:28:05,800 --> 01:28:09,320
Speaker 1: know about the world of investing today that you wish

1231
01:28:09,360 --> 01:28:11,800
Speaker 1: you knew thirty years or so ago when you were

1232
01:28:11,800 --> 01:28:22,800
Speaker 1: first getting started. Um, I think one thing is this

1233
01:28:23,040 --> 01:28:32,120
Speaker 1: country is when it pulls together, h is very good

1234
01:28:32,160 --> 01:28:38,840
Speaker 1: at overcoming obstacles. A democratic system that is representative of

1235
01:28:38,880 --> 01:28:43,600
Speaker 1: the of the people and is able to um to

1236
01:28:43,760 --> 01:28:48,880
Speaker 1: harness the talents of the millions of Americans who are

1237
01:28:49,640 --> 01:28:53,720
Speaker 1: you know, working hard and and and want to participate

1238
01:28:53,800 --> 01:28:59,080
Speaker 1: in the growth the economy. That this country is able

1239
01:28:59,120 --> 01:29:05,000
Speaker 1: to grow very rapidly and is able to overcome lots

1240
01:29:05,000 --> 01:29:08,719
Speaker 1: of difficult obstacles. And I think that there are points

1241
01:29:08,720 --> 01:29:12,760
Speaker 1: in time when after a crisis, the middle of a crisis,

1242
01:29:12,760 --> 01:29:16,559
Speaker 1: when there are moments that I would say, Gee, this

1243
01:29:16,640 --> 01:29:18,439
Speaker 1: is going to last for a long time. It's going

1244
01:29:18,479 --> 01:29:23,280
Speaker 1: to be very hard for the US to recover. Every

1245
01:29:23,280 --> 01:29:27,360
Speaker 1: time that thought has crossed my mind, UM, I come

1246
01:29:27,400 --> 01:29:34,840
Speaker 1: to realize that two years, three years later, the economy

1247
01:29:34,880 --> 01:29:41,719
Speaker 1: has recovered, The country has recovered and is pulling together again.

1248
01:29:42,120 --> 01:29:47,800
Speaker 1: So I guess I come to the conclusion that optimism

1249
01:29:48,120 --> 01:29:55,280
Speaker 1: is a better strategy for addressing financial markets and addressing

1250
01:29:55,360 --> 01:30:01,680
Speaker 1: the economic outlook than pessimism, because in general the optimism

1251
01:30:01,800 --> 01:30:08,240
Speaker 1: is paid off better um than than taking the negative

1252
01:30:08,320 --> 01:30:12,960
Speaker 1: view of availed look. I will say, however, that in

1253
01:30:13,040 --> 01:30:18,200
Speaker 1: the current environment, UM, it requires and in those earlier

1254
01:30:18,280 --> 01:30:24,479
Speaker 1: environments as well, it requires really good leadership UM. And

1255
01:30:24,840 --> 01:30:28,639
Speaker 1: we have been very fortunate in this country for many

1256
01:30:28,720 --> 01:30:33,920
Speaker 1: decades to have leaders who come through and are are

1257
01:30:34,800 --> 01:30:38,839
Speaker 1: um able to take the reins when when the country

1258
01:30:38,920 --> 01:30:42,720
Speaker 1: needs them. Harry Truman, who would have thought that a

1259
01:30:42,960 --> 01:30:50,760
Speaker 1: relatively junior senator from Missouri who Roosevelt hardly knew UM

1260
01:30:51,080 --> 01:30:54,600
Speaker 1: was put in as vice president almost by accident and

1261
01:30:54,760 --> 01:30:59,479
Speaker 1: turned out to be, in my judgment, a really great president. UM.

1262
01:30:59,520 --> 01:31:02,519
Speaker 1: That we've we've seen this in the past, that that

1263
01:31:02,640 --> 01:31:07,680
Speaker 1: American that you get various people from various sectors, not

1264
01:31:07,760 --> 01:31:11,320
Speaker 1: just at the presidential level but other levels, who exercise

1265
01:31:11,960 --> 01:31:15,480
Speaker 1: leadership to help pull this country together again. And I

1266
01:31:15,479 --> 01:31:19,280
Speaker 1: I do think at point we need that more than

1267
01:31:19,280 --> 01:31:26,480
Speaker 1: ever to heal the pipe. The partisanship that tends to

1268
01:31:26,520 --> 01:31:36,160
Speaker 1: stop things from moving ahead. To deal with inequities, inequalities, discrimination,

1269
01:31:36,400 --> 01:31:38,880
Speaker 1: things of that sort, We've got we've got to demonstrate

1270
01:31:38,920 --> 01:31:42,479
Speaker 1: that America is capable of doing the kind of great

1271
01:31:42,479 --> 01:31:44,559
Speaker 1: things that it's done in the past, and that's gonna

1272
01:31:44,760 --> 01:31:48,759
Speaker 1: quite We've gotten into some bad patterns. We think about

1273
01:31:48,960 --> 01:31:51,799
Speaker 1: the future and how to bring this pull this country

1274
01:31:51,880 --> 01:31:55,360
Speaker 1: together again, not just for economic growth, but for social

1275
01:31:55,400 --> 01:31:58,800
Speaker 1: coesion and a more positive outlook for more and more

1276
01:31:58,800 --> 01:32:02,519
Speaker 1: people who have not been able to participate as fully

1277
01:32:02,600 --> 01:32:05,920
Speaker 1: in the prosperity or the well being of this country

1278
01:32:06,000 --> 01:32:10,920
Speaker 1: as as in the best quite quite fascinating. Thank you,

1279
01:32:11,000 --> 01:32:13,920
Speaker 1: Bob for being so generous with your time. We have

1280
01:32:14,080 --> 01:32:17,400
Speaker 1: been speaking with Bob Hormats. He is the former vice

1281
01:32:17,479 --> 01:32:23,759
Speaker 1: chairman of Coleman Sachs, legendary member of various administrations from

1282
01:32:23,880 --> 01:32:28,320
Speaker 1: Nixon to Reagan to the Obama administration, currently Managing director

1283
01:32:28,439 --> 01:32:33,400
Speaker 1: at Tina Men Advisors. If you enjoyed this conversation, well

1284
01:32:33,479 --> 01:32:37,280
Speaker 1: check out all of our previous interviews. You can find

1285
01:32:37,320 --> 01:32:42,439
Speaker 1: them at iTunes, Spotify, wherever finer podcasts are sold. We

1286
01:32:42,560 --> 01:32:46,080
Speaker 1: love your comments, feedback and suggestions right to us at

1287
01:32:46,760 --> 01:32:49,519
Speaker 1: m IB podcast at Bloomberg dot net. Give us a

1288
01:32:49,520 --> 01:32:53,479
Speaker 1: review at Apple iTunes. You can sign up from my

1289
01:32:53,720 --> 01:32:57,479
Speaker 1: daily reading list at ridlts dot com. Check out my

1290
01:32:57,560 --> 01:33:01,439
Speaker 1: weekly column on Bloomberg dot com sla USh Opinion. Follow

1291
01:33:01,479 --> 01:33:05,320
Speaker 1: me on Twitter at Ridoltz. I would be remiss if

1292
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Speaker 1: I did not thank the Crack staff that helps put

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Speaker 1: these conversations together each week. Paris Wald is my producer,

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Speaker 1: Atika val Brond is my project manager. Tim Harrow is

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Speaker 1: my audio engineer. Michael Batnick is my head of research.

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Speaker 1: I'm Barry Ridhlts. You've been listening to Masters in Business

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Speaker 1: on Bloomberg Radio.