WEBVTT - Steven Mnuchin 0:00:03.360 --> 0:00:07.280 Steve Manuchin service Treasury Secretary under Donald Trump's first term. 0:00:07.640 --> 0:00:10.280 Today he's running a global private equity firm. I had 0:00:10.280 --> 0:00:12.640 a chance recently to sit down with Steve Manuchen to 0:00:12.680 --> 0:00:15.920 talk about his days as Treasury secretary, the investment environment, 0:00:15.960 --> 0:00:19.480 and the global economy. So you served as the seventy 0:00:19.560 --> 0:00:23.599 seventh Secretary of the Treasury when President Trump was reelected. 0:00:23.640 --> 0:00:25.280 Did you say maybe I want to go back in 0:00:25.360 --> 0:00:26.000 again or you. 0:00:25.960 --> 0:00:27.120 Had enough government service? 0:00:27.280 --> 0:00:30.680 Well, it was an extraordinary experience working for him and 0:00:30.800 --> 0:00:33.839 being part of the whole first campaign. And now I'm 0:00:33.880 --> 0:00:38.559 really focused on private investments and opportunities. But I am 0:00:38.600 --> 0:00:39.960 trying to help from the outside. 0:00:40.120 --> 0:00:42.640 So you're not going to go back in anytime soon. 0:00:44.200 --> 0:00:46.600 I'm happy doing what I'm doing and giving a little 0:00:46.680 --> 0:00:47.920 coaching from the outside. 0:00:48.880 --> 0:00:53.200 You know, you served for four years, and President Trump, 0:00:53.240 --> 0:00:55.360 to my knowledge, never criticized you in public. 0:00:56.240 --> 0:00:57.360 I don't know about private, but. 0:00:57.600 --> 0:00:59.920 You know, so to be four years and never be 0:01:00.040 --> 0:01:01.959 criticized in public, that was pretty impressive. 0:01:02.000 --> 0:01:04.120 So what's the secret. Have you told the new Secretary 0:01:04.120 --> 0:01:04.880 of Treasure what to do? 0:01:05.480 --> 0:01:07.360 I haven't told him what to do. I think he's 0:01:07.720 --> 0:01:12.360 in very good shape. Look I understood the President's agenda. 0:01:12.560 --> 0:01:15.840 I had the opportunity to help shape the economic agenda, 0:01:15.959 --> 0:01:17.360 and we were proud of what we did. 0:01:17.360 --> 0:01:18.160 The first term. 0:01:18.480 --> 0:01:21.360 We were focused on tax cuts, getting the biggest tax 0:01:21.400 --> 0:01:25.200 cuts done, trade and regulatory relief, and I'm excited to 0:01:25.200 --> 0:01:26.560 see them focused on it again. 0:01:26.840 --> 0:01:29.760 So how do you think the tariffs are going to 0:01:29.840 --> 0:01:33.479 affect the economy? Why does President Trump like tariffs so much? 0:01:34.080 --> 0:01:37.840 The President's been very focused on tariffs for a long time, 0:01:38.400 --> 0:01:42.399 and he fundamentally believes it's a good source of revenue 0:01:42.880 --> 0:01:46.360 and that it's impactful in getting people to change behavior, 0:01:46.720 --> 0:01:48.200 and that's what we're seeing today. 0:01:48.320 --> 0:01:51.400 You think that tariffs will be ultimately good for the 0:01:51.480 --> 0:01:52.120 US economy. 0:01:52.120 --> 0:01:53.480 I assume you have a similar view. 0:01:54.360 --> 0:01:59.200 Well, I think the market really wants certainty and understanding 0:01:59.240 --> 0:02:02.640 certainty adjust to whatever they are. I think the problem 0:02:02.720 --> 0:02:06.280 right now is we don't have certainty. My own view 0:02:06.320 --> 0:02:09.520 on the tariffs would be that if he wants to 0:02:09.520 --> 0:02:12.239 do something, I like the idea of the ten percent 0:02:12.360 --> 0:02:17.080 tariff across the board, it's a consumption tax on foreign goods. 0:02:17.440 --> 0:02:19.000 But if you were to do that, he should do 0:02:19.040 --> 0:02:22.040 that through the reconciliation process. So that can be scored, 0:02:22.080 --> 0:02:24.040 I think would raise about two and a half trillion 0:02:24.080 --> 0:02:27.600 dollars and could be used to pay for tax cuts. 0:02:27.680 --> 0:02:31.320 As an example, speaking of tax cuts, you engineered with 0:02:31.440 --> 0:02:35.120 President Trump the very large tax cut of his first term. 0:02:35.680 --> 0:02:38.680 Do you think a similar size tax cut is essential now? 0:02:39.720 --> 0:02:43.600 Well, the biggest focus for them is just extending the 0:02:43.720 --> 0:02:47.080 personal side of the tax cuts which are going to expire, 0:02:47.120 --> 0:02:50.480 and I think that that was a signature part of 0:02:50.520 --> 0:02:52.680 his first term, and I think that's got to be 0:02:52.760 --> 0:02:55.720 the priority to continue now. On top of that, I 0:02:55.760 --> 0:02:58.960 know he wants to do additional tax cuts and that'll 0:02:59.000 --> 0:03:01.040 be a little bit more challenge with the pay force. 0:03:01.360 --> 0:03:04.399 Or during the campaign, he talked about a couple other 0:03:04.440 --> 0:03:08.160 tax cuts. One is no tax on tips. Are people 0:03:08.160 --> 0:03:09.920 getting tips actually paying a lot of taxes? 0:03:09.960 --> 0:03:10.360 I don't know. 0:03:10.680 --> 0:03:12.560 You know, we're not in as much as a cash 0:03:12.600 --> 0:03:14.880 society as we used to, so there's a lot of 0:03:14.880 --> 0:03:19.280 tips that go through an electronic mechanism. I think if 0:03:19.280 --> 0:03:22.200 he wants to have a small carve out for tax 0:03:22.280 --> 0:03:23.280 on tips. 0:03:23.200 --> 0:03:24.280 I think that makes sense. 0:03:24.680 --> 0:03:28.280 I think obviously, if you start giving tips to investment 0:03:28.320 --> 0:03:30.600 bankers at the end of the year instead of bonuses 0:03:30.919 --> 0:03:32.600 and they don't get tax that would be a little 0:03:32.600 --> 0:03:35.800 bit more problematic. And you know, you could tax your lawyers, 0:03:35.880 --> 0:03:39.520 and so I think if he does that, it needs 0:03:39.560 --> 0:03:40.920 to have a small carve out. 0:03:41.120 --> 0:03:43.520 When you were working on the tax cut, when you 0:03:43.560 --> 0:03:46.800 were Secretary of Treategy, how did you find the intellectual 0:03:46.920 --> 0:03:49.160 level of the ways and means committee members? 0:03:49.320 --> 0:03:51.240 You know, when we passed the tax cuts, and this 0:03:51.400 --> 0:03:54.640 was a lot of work, we were very engaged with 0:03:54.800 --> 0:03:57.560 both the House and Senate, and actually we had weekly 0:03:57.600 --> 0:04:00.440 meetings which was called the Big Six. It was me 0:04:00.520 --> 0:04:03.800 and Gary Cohne from the White House, it was the Senate, 0:04:03.880 --> 0:04:07.200 and it was the House, and literally every week we sat. 0:04:07.000 --> 0:04:08.640 Down and went through details. 0:04:08.720 --> 0:04:10.880 So I mean, as you know, I mean, we had 0:04:11.000 --> 0:04:15.520 sweeping tax reform across everything. This time it is actually 0:04:15.520 --> 0:04:19.520 a lot simpler. But I do think Secretary Bessett needs 0:04:19.560 --> 0:04:21.600 to be very focused on working with the House and 0:04:21.640 --> 0:04:23.880 the Senate to get this across the finish line. 0:04:24.480 --> 0:04:29.640 In recent decades, the annual deficit has been fairly high. 0:04:30.040 --> 0:04:33.040 I think under President Trump's first four years, I think 0:04:33.040 --> 0:04:35.400 it was maybe six to eight trillion dollars of additional 0:04:35.720 --> 0:04:37.160 debt added to the total debt. 0:04:37.200 --> 0:04:38.360 We have that thirty six trillion. 0:04:38.400 --> 0:04:41.320 Now, how are we going to get the debt down 0:04:41.480 --> 0:04:44.520 and the deficit down if we have these big tax cuts. 0:04:45.040 --> 0:04:47.520 Well, David, let me just say I think the deficit 0:04:48.040 --> 0:04:51.560 is probably the most important issue today in terms of 0:04:51.720 --> 0:04:52.760 the long term. 0:04:52.480 --> 0:04:53.720 Impact on the economy. 0:04:53.760 --> 0:04:56.920 And just to put this in perspective, in the first term, 0:04:57.120 --> 0:05:00.680 we had debt to GDP ratio of about an hundred percent, 0:05:01.279 --> 0:05:04.719 and with the tax cuts and economic growth before COVID, 0:05:05.080 --> 0:05:07.560 we were growing the economy faster than we were growing 0:05:07.560 --> 0:05:10.520 the debt, so that that ratio would have come down, 0:05:10.680 --> 0:05:12.360 and I think we were trying to get it down 0:05:12.360 --> 0:05:15.479 to ninety to ninety five. The big focus on the 0:05:15.520 --> 0:05:20.520 first term was military spending. We unfortunately had to increase 0:05:20.640 --> 0:05:23.240 non military spending to get it through the House and Senate. 0:05:23.680 --> 0:05:26.880 But what really impacted us was COVID, and I think 0:05:26.960 --> 0:05:30.799 as you know firsthand, you know, we had to spend 0:05:30.880 --> 0:05:32.680 a lot of money in COVID or we would have 0:05:32.680 --> 0:05:36.880 had a worldwide depression, not recession. I think the problem was, 0:05:37.279 --> 0:05:39.679 you know, the first two trillion dollars was well spent, 0:05:39.880 --> 0:05:42.640 the next two trillion we never should have spent. And 0:05:42.680 --> 0:05:45.960 then the Biden administration kept on spending. So you know, 0:05:46.000 --> 0:05:48.119 we have debt to GDP of close to one hundred 0:05:48.120 --> 0:05:53.040 and twenty five percent today. That's a gigantic problem. Secretary 0:05:53.040 --> 0:05:56.120 Besant has talked about getting the deficit down from six 0:05:56.200 --> 0:05:59.160 percent to three percent of GDP and that's got to 0:05:59.200 --> 0:06:01.560 be a major folks. So if we're going to do 0:06:01.600 --> 0:06:03.960 the tax cuts, we need to make sure there's pay 0:06:04.040 --> 0:06:06.600 for us, and we need to make sure there's economic growth. 0:06:07.360 --> 0:06:10.560 When Bob Rubin was Secretary of the Treasury, he once 0:06:10.720 --> 0:06:13.120 talked about the value of the dollar, and he made 0:06:13.160 --> 0:06:17.120 a mistake, he later would say, by talking about saying 0:06:17.160 --> 0:06:19.680 something other than we want a strong dollar. And now 0:06:19.720 --> 0:06:22.520 every Treasury secretary is told you can only say one 0:06:22.520 --> 0:06:24.880 thing about the dollar. We want a strong dollar. But 0:06:25.000 --> 0:06:28.320 what can former secretaries and Treasury say about that? Can 0:06:28.360 --> 0:06:30.480 they say we want a strong dollar? Can you say 0:06:30.640 --> 0:06:32.640 maybe it should weaken a little bit and to make 0:06:32.680 --> 0:06:34.280 it our exports easier to sell. 0:06:34.720 --> 0:06:36.320 Well, you know, it's funny that you say that, And 0:06:36.800 --> 0:06:40.840 Bob really was kind of credited with the strong dollar policy, 0:06:40.880 --> 0:06:43.400 and I think it's kind of every Treasury secretary after 0:06:43.440 --> 0:06:45.919 that kind of you know, you got Treasury one oh 0:06:46.000 --> 0:06:48.279 one training, and the first thing they told you was 0:06:48.880 --> 0:06:50.719 just talk about a strong dollar. 0:06:51.880 --> 0:06:52.080 You know. 0:06:52.200 --> 0:06:54.880 Actually, when I was at Davos, I come into it 0:06:54.920 --> 0:06:58.920 on a balanced, stable dollar as opposed to saying a 0:06:58.960 --> 0:07:03.200 strong dollar, and all of a sudden, the dollar moved significantly. 0:07:03.720 --> 0:07:06.320 I think on the long term it is important that 0:07:06.360 --> 0:07:08.880 we have a strong dollar. The dollar is the reserve 0:07:08.960 --> 0:07:12.400 currency of the world, and a strong dollar affects a 0:07:12.440 --> 0:07:16.600 strong economy. In the short term, particularly because of trade, 0:07:16.680 --> 0:07:20.640 you know, the strength of the dollar can have a 0:07:20.720 --> 0:07:23.960 negative impact. But I think the most important thing is 0:07:24.000 --> 0:07:27.600 actually a stable dollar so that there's not volatility. 0:07:27.760 --> 0:07:30.560 Speaking of stable, what do you think about the Secretary 0:07:30.560 --> 0:07:35.280 of Treasury or the US government supporting cryptocurrencies. They didn't 0:07:35.320 --> 0:07:37.480 really have them so much when you were Secretary of Treasury, 0:07:37.760 --> 0:07:41.600 but now cryptocurrencies seem to be very heavily supported by 0:07:41.640 --> 0:07:43.040 President Trump and his administration. 0:07:43.320 --> 0:07:44.960 Do you have any comment on whether that's a good 0:07:45.040 --> 0:07:45.560 or bad thing. 0:07:46.080 --> 0:07:48.960 Look, my view on crypto has been pretty consistent. We 0:07:48.960 --> 0:07:51.040 did a lot of work on this in the first term. 0:07:51.480 --> 0:07:54.960 If people want to buy crypto as an asset class 0:07:55.920 --> 0:07:56.440 like they. 0:07:56.280 --> 0:07:58.400 Buy gold, that's fine to me. 0:07:58.600 --> 0:08:02.160 The bigger issue has been making sure that crypto is 0:08:02.200 --> 0:08:06.120 not used for illicit activities. And you know, we spent 0:08:06.200 --> 0:08:09.080 a long time getting rid of Swiss numbered bank accounts, 0:08:09.200 --> 0:08:13.240 making sure that we have a mechanism that crypto can 0:08:13.280 --> 0:08:17.400 be compliant with BSA and all of our money laundering regulations. 0:08:17.560 --> 0:08:19.480 And I have concerns today about that. 0:08:20.200 --> 0:08:24.000 You know, in the business world, investment world, if you 0:08:24.120 --> 0:08:27.760 hire more fundraisers, you usually raise more money. In the 0:08:27.800 --> 0:08:31.360 IRS world, if you get more agents, you usually raise 0:08:31.440 --> 0:08:34.320 more money. But for some reason, the Republican Party seems 0:08:34.320 --> 0:08:36.600 to want to have fewer agents, and therefore they reduce 0:08:36.640 --> 0:08:39.440 the number of agents, and therefore maybe they're not going 0:08:39.480 --> 0:08:40.839 to raise as much money. Do you have a view 0:08:40.880 --> 0:08:43.760 on whether cutting back the IRS agents that were put 0:08:43.760 --> 0:08:45.960 in under a President Biden is a good thing to 0:08:46.000 --> 0:08:46.440 do or not. 0:08:46.760 --> 0:08:49.400 I actually don't think we need more agents. What we 0:08:49.440 --> 0:08:53.280 need is a bigger investment in technology. In the IRS, 0:08:54.200 --> 0:08:56.840 the systems are outdated, and I think in this day 0:08:56.880 --> 0:09:00.400 and age, there's a lot we can do with technoloology 0:09:00.559 --> 0:09:04.199 that we don't need physical agents auditing people. 0:09:04.240 --> 0:09:05.640 It can be done electronically. 0:09:06.200 --> 0:09:08.679 So when you became the Secretary of the Treasury. There 0:09:08.720 --> 0:09:10.679 was somebody on the Federal Reserve Board who had been 0:09:10.679 --> 0:09:13.720 appointed by President Obama, James J. 0:09:13.840 --> 0:09:14.800 Powell, who used to. 0:09:14.720 --> 0:09:17.480 Work at my firm, and then you recommended him to 0:09:17.600 --> 0:09:19.839 President Trump, I think, to be the chairman of the 0:09:19.880 --> 0:09:22.920 Federal Reserve. President Trump was not happy with him at 0:09:22.920 --> 0:09:25.280 the beginning. I guess any regrets about recommending J. 0:09:25.440 --> 0:09:25.680 Powe. 0:09:25.760 --> 0:09:27.600 I do think Jay's done a very good job. 0:09:28.080 --> 0:09:30.400 You know, as President Trump he had a bunch of 0:09:30.400 --> 0:09:33.280 issues with him raising rates, but then during COVID he 0:09:33.320 --> 0:09:35.560 did give him the Most Improved Player Award when he 0:09:35.640 --> 0:09:37.720 dropped rades down to zero at the time. 0:09:37.920 --> 0:09:40.520 So generally the President of the United States is not 0:09:40.559 --> 0:09:43.720 supposed to talk to or lobby the Chairman of the Fed, 0:09:43.760 --> 0:09:46.160 but the Secretary of Treasury usually meets regularly with the 0:09:46.240 --> 0:09:46.840 Chairman of the Fed. 0:09:46.880 --> 0:09:49.400 Did you meet with him fairly regularly? I did. 0:09:49.520 --> 0:09:53.199 I mean we inherited a tradition which has been kept 0:09:53.280 --> 0:09:56.200 up is that the Secretary of the Treasury and the 0:09:56.240 --> 0:10:00.120 Chairman of the Fed meet weekly. It alternates every week 0:10:00.160 --> 0:10:03.320 between being at the Treasury and the FED. And I 0:10:03.400 --> 0:10:06.319 found those meetings very helpful. I mean a big focus 0:10:06.440 --> 0:10:10.840 was obviously what we were doing on regulation monetary policy. 0:10:11.040 --> 0:10:15.360 I never talked about monetary policy publicly, but yes, of 0:10:15.400 --> 0:10:17.720 course we did talk about those types of things. We 0:10:17.760 --> 0:10:19.760 talked about the economy, and I think we had a 0:10:19.840 --> 0:10:21.319 very good working relationship. 0:10:21.559 --> 0:10:24.760 So today, if you were Jpowe, would you lower interest 0:10:24.800 --> 0:10:26.280 rates in the next six months or so? 0:10:27.240 --> 0:10:28.960 I think it's pretty clear the Fed is going to 0:10:29.000 --> 0:10:31.200 lower rates. So I mean, if you look at the 0:10:31.240 --> 0:10:35.079 dot plot, which is you know what the Fed governors 0:10:35.120 --> 0:10:39.040 have publicly said, you do see rates coming down to 0:10:39.120 --> 0:10:42.080 about three in a quarter, and you see the long 0:10:42.160 --> 0:10:45.480 term rate at about two point eight. I do think 0:10:45.520 --> 0:10:48.280 the long term rate between being closer to two and 0:10:48.360 --> 0:10:50.839 a half than three. And I think we're going to 0:10:50.880 --> 0:10:53.520 see rates lowered next year. And by the way, I 0:10:53.600 --> 0:10:56.439 think the ten year has that already built in to 0:10:56.559 --> 0:10:58.400 the market. So I think we're going to see three 0:10:58.480 --> 0:11:00.600 and a quarter three and a half percent and funds 0:11:00.960 --> 0:11:03.920 and I think we'll see about four percent ten year treasuries. 0:11:04.080 --> 0:11:07.120 You left Secretary Treasury and you start a private equity firm, 0:11:07.320 --> 0:11:12.040 Liberty Strategic Capital. So is private equity as fulfilling as 0:11:12.080 --> 0:11:13.520 you thought? I know you were in it a bit 0:11:13.559 --> 0:11:15.920 before you became Secretary of Treasury. But how do you 0:11:16.040 --> 0:11:17.600 enjoy the private equity world? 0:11:18.200 --> 0:11:20.960 Well, David, you know, I've been in the investment business 0:11:21.040 --> 0:11:26.280 and the markets businesses now for forty years, and I 0:11:26.320 --> 0:11:29.000 think kind of every job I did kind of prepared 0:11:29.040 --> 0:11:32.600 me more for the future. And when I became Treasury 0:11:32.640 --> 0:11:35.120 as secretary, I think it was helpful that I had 0:11:35.400 --> 0:11:38.559 a background in markets and risk. I had been CEO 0:11:38.640 --> 0:11:41.800 of a bank, so that, you know, I understood a 0:11:41.840 --> 0:11:44.680 lot of these issues. You know, we're small enough that 0:11:44.800 --> 0:11:48.040 we focus on a handful of investments. We've done about 0:11:48.280 --> 0:11:51.280 ten investments to date, and you know, I find it 0:11:51.400 --> 0:11:52.920 very interesting you. 0:11:52.880 --> 0:11:55.440 Agree with my view that the highest calling of mankind 0:11:55.480 --> 0:11:56.240 is private equity. 0:11:56.440 --> 0:11:58.520 I do not. No, you don't think so there's something 0:11:58.520 --> 0:12:00.679 more important, but I don't know what it is. But okay, I. 0:12:00.600 --> 0:12:02.040 Would have thought you were going to tell me the 0:12:02.080 --> 0:12:04.839 highest calling was to own a baseball team. 0:12:05.040 --> 0:12:05.920 If it's a winning team. 0:12:06.000 --> 0:12:09.199 Yes, But so let me ask you, Well, one of 0:12:09.240 --> 0:12:11.480 the pleasures of being Secretary of the Treasury is you 0:12:11.520 --> 0:12:14.720 get your handwriting on the dollar bill. 0:12:15.080 --> 0:12:15.760 Something like that. 0:12:15.920 --> 0:12:21.080 Some secretary of Treasures had incomprehensible, indecipherable handwriting and you 0:12:21.080 --> 0:12:23.920 couldn't figure out who actually was signing it. But what 0:12:24.000 --> 0:12:27.240 was the pleasure like of getting a bills one hundred 0:12:27.280 --> 0:12:30.959 dollar bills or dollar bills and having your signature on it? 0:12:31.000 --> 0:12:31.800 Was that fun or not? 0:12:32.120 --> 0:12:35.319 You know, David, I changed my signature because my signature 0:12:35.520 --> 0:12:39.400 was completely illegible, okay, And I thought, if I'm going 0:12:39.480 --> 0:12:42.240 to have my signature on the money forever, it would 0:12:42.240 --> 0:12:44.160 be nice if you could see it and read it. 0:12:44.280 --> 0:12:46.240 So I simplified my signature a lot. 0:12:46.800 --> 0:12:48.000 I guess the question. 0:12:47.840 --> 0:12:51.000 Is, is you know, I wonder if President Trump wants 0:12:51.040 --> 0:12:53.319 his signature on the money. 0:12:54.280 --> 0:12:58.800 One of the most important parts of the Treasury Code 0:12:59.120 --> 0:13:02.360 IRS code is something called carried interest taxation. 0:13:02.600 --> 0:13:03.800 You're probably familiar with that. 0:13:03.920 --> 0:13:05.920 I've heard about it a few time times. I heard 0:13:05.960 --> 0:13:07.440 about it during the first I know. 0:13:07.480 --> 0:13:09.480 President Trump has never been a big fan of that. 0:13:09.559 --> 0:13:12.400 I think you know, and I think in this current 0:13:13.600 --> 0:13:15.360 speeches he's made about he said he wanted to get 0:13:15.400 --> 0:13:19.400 rid of current I carried interest taxation and whatever benefit 0:13:19.480 --> 0:13:20.640 sports owners gets as well. 0:13:20.679 --> 0:13:21.880 I don't know exactly what they are. 0:13:21.920 --> 0:13:24.360 But so do you have a view on carried interest 0:13:24.400 --> 0:13:26.360 now that you were in the private EQUI world. 0:13:26.400 --> 0:13:28.520 One of the issues, as you know, on carried interest, 0:13:28.640 --> 0:13:32.480 is if you have two investors and we invested. You know, 0:13:32.520 --> 0:13:35.760 if I invested fifty percent, you invested fifty percent, we'd 0:13:35.720 --> 0:13:36.440 need to pay a. 0:13:36.360 --> 0:13:39.800 Certain amount to tax to the extent in it. 0:13:39.880 --> 0:13:43.200 You create a fund and we decide as opposed to 0:13:43.240 --> 0:13:46.119 it being fifty to fifty, we're going to exchange profits. 0:13:46.679 --> 0:13:50.480 It doesn't change the tax that the government collects. So 0:13:50.960 --> 0:13:54.600 I think from an academic standpoint, you know there's a 0:13:54.640 --> 0:13:57.880 reason behind this. From a revenue standpoint, that'll have to 0:13:57.880 --> 0:13:59.480 be something that Congress looks at. 0:14:00.120 --> 0:14:02.280 What is the biggest pleasure you've gotten out of having 0:14:02.280 --> 0:14:04.760 a private equity fund? Now you raised the fund, You've 0:14:04.760 --> 0:14:07.400 made a number of investments. Are you enjoying us as 0:14:07.480 --> 0:14:09.400 much as being Secretary of treasurer or being a partner 0:14:09.400 --> 0:14:11.400 at Goldman Sachs or not as much? 0:14:11.840 --> 0:14:15.800 I mean, David, all these experiences were really extraordinary. I mean, 0:14:15.840 --> 0:14:19.600 what I find interesting about this is investing in businesses 0:14:20.080 --> 0:14:23.400 and being able to impact certain businesses. You know, I've 0:14:23.400 --> 0:14:27.040 had a long experience in banking. We made a big 0:14:27.080 --> 0:14:31.600 investment that we bailed out and saved what was a 0:14:31.600 --> 0:14:34.080 Flagstar bank, it was called New York Community Bank at 0:14:34.080 --> 0:14:36.800 the time, and you know, banking is something that's been 0:14:36.880 --> 0:14:37.800 very interesting to me. 0:14:37.840 --> 0:14:39.360 So this is the second time I did this. 0:14:39.840 --> 0:14:42.600 Now, President Trump and his administration are very focused on 0:14:42.600 --> 0:14:45.440 the trade deficit, which is very, very high these days. 0:14:45.880 --> 0:14:48.400 But is the trade deficit that big a problem compared 0:14:48.400 --> 0:14:50.560 to the budget deficit? If you were to worry about 0:14:50.760 --> 0:14:53.440 which deficit, wouldn't be budget deficit be more important than 0:14:53.440 --> 0:14:54.160 the trade deficit. 0:14:54.720 --> 0:14:57.400 Well, as you said, we have what's called the twin deficits. 0:14:58.200 --> 0:15:02.120 In my opinion, the budget deficited two trillion dollars annually 0:15:02.320 --> 0:15:02.680 is a. 0:15:02.680 --> 0:15:03.880 Much bigger problem. 0:15:04.280 --> 0:15:06.920 And I think, by the way, if you brought down 0:15:06.960 --> 0:15:10.480 the budget deficit, by definition, you'd bring down the trade 0:15:10.480 --> 0:15:14.480 deficit because you'd have less demand for goods in general. 0:15:15.000 --> 0:15:18.680 And I do think the idea of resetting trade relationships. 0:15:18.680 --> 0:15:22.160 I mean, President Trump is right that the US market 0:15:22.200 --> 0:15:26.240 has been open for foreign trade and foreign markets have 0:15:26.360 --> 0:15:27.600 not been opened in the same way. 0:15:27.640 --> 0:15:28.440 You know, we spent a. 0:15:28.360 --> 0:15:31.360 Lot of time with China on the Phase one deal. 0:15:31.760 --> 0:15:34.040 They haven't lived up to that. But the whole idea 0:15:34.120 --> 0:15:37.280 was if we could allow access to our business to 0:15:37.360 --> 0:15:38.960 a growing China middle class. 0:15:39.000 --> 0:15:41.400 That's an enormous opportunity for US business. 0:15:41.880 --> 0:15:43.840 And I do think kind of a big part of 0:15:43.840 --> 0:15:46.640 the trade deficit is we don't have fair trade in 0:15:46.680 --> 0:15:47.560 both directions. 0:15:48.000 --> 0:15:50.520 Now, President Trump has made a big push on getting 0:15:50.560 --> 0:15:53.480 American companies and foreign companies to invest in the United 0:15:53.520 --> 0:15:57.800 States manufacturer things that would probably be somewhat inflationary because 0:15:58.000 --> 0:16:01.560 by definition, if you have people produce things overseas, probably 0:16:01.600 --> 0:16:04.080 because it's the lowest cost producer, if you bring them 0:16:04.080 --> 0:16:06.480 back the United States with higher labor costs, it'll be 0:16:06.520 --> 0:16:10.360 a higher cost production, therefore maybe more inflationary. Despite that, 0:16:10.520 --> 0:16:12.640 you think it's a good idea to have more things 0:16:12.680 --> 0:16:13.880 manufacturing United States. 0:16:14.480 --> 0:16:17.960 Well, I definitely think US manufacturing jobs has always been 0:16:18.000 --> 0:16:20.280 a big focus of his. I think, you know, there 0:16:20.360 --> 0:16:23.200 was a large part of the economy that was left behind, 0:16:23.640 --> 0:16:26.320 and I do think that's a focus now. Obviously, there 0:16:26.360 --> 0:16:29.720 are different markets that can be competitive, so I think 0:16:29.760 --> 0:16:32.560 we can have the same thing, but his focus should 0:16:32.640 --> 0:16:33.920 be US investment. 0:16:34.320 --> 0:16:37.560 In your view, is Congress likely to deal with the 0:16:38.120 --> 0:16:40.840 budget deficit in a way where we won't have to 0:16:40.840 --> 0:16:44.000 deal with the government shutting down. Do you think that's 0:16:44.040 --> 0:16:46.040 a real risk that the government could shut down again. 0:16:47.080 --> 0:16:51.280 Look, I'd say, you know, there's two issues that again 0:16:51.280 --> 0:16:54.280 that I spent a lot of time on, both the 0:16:54.360 --> 0:16:58.640 debt ceiling and government funding. So as Treasury, we could 0:16:58.640 --> 0:17:01.360 have the money and not be able to spend it 0:17:01.800 --> 0:17:05.480 right because of government funding, or we could have the 0:17:05.520 --> 0:17:08.359 government funding but not have enough money because of the 0:17:08.359 --> 0:17:08.959 dead ceiling. 0:17:09.400 --> 0:17:11.240 My major focus was the dead. 0:17:11.080 --> 0:17:13.760 Ceiling, and one of the things I think now is 0:17:13.800 --> 0:17:17.320 the most important issue is the Republicans need to get 0:17:17.359 --> 0:17:21.280 the dead ceiling into a reconciliation bill quickly and raise 0:17:21.359 --> 0:17:22.160 the dead ceiling. 0:17:22.640 --> 0:17:26.280 In nineteen seventeen, the death ceiling was first imposed, and 0:17:26.320 --> 0:17:30.119 we've now raised it more than ninety times. President Trump 0:17:30.119 --> 0:17:32.399 has said before we should get rid of the dead ceiling, 0:17:32.880 --> 0:17:34.760 and we're the only country in the world with one 0:17:34.800 --> 0:17:37.159 other than Denmark. So what is your view on do 0:17:37.200 --> 0:17:39.680 we need a dead ceiling because we can we changed 0:17:39.680 --> 0:17:41.560 it all the time anyway, or should we just keep 0:17:41.560 --> 0:17:42.280 the dead ceiling. 0:17:42.960 --> 0:17:45.960 Well, given the side of the debt that we have 0:17:46.080 --> 0:17:48.800 today and the focus on the debt, I would keep 0:17:48.840 --> 0:17:51.840 the dead ceiling. I think it's an important mechanism. It's 0:17:51.880 --> 0:17:55.280 become too political, but I think spending and the dead 0:17:55.320 --> 0:17:59.040 ceiling should be passed at the same time. So whenever 0:17:59.160 --> 0:18:03.680 Congress passed is whatever the spending is, they should simultaneously 0:18:03.880 --> 0:18:06.399 pass the debt ceiling so that you can afford to 0:18:06.400 --> 0:18:10.359 pay for that. But I don't think, you know, unlimited 0:18:10.400 --> 0:18:13.480 spending is a good thing. As I mentioned earlier, you 0:18:13.520 --> 0:18:16.480 know COVID, we had to do trillion dollars spending. We 0:18:16.560 --> 0:18:19.639 then got spending out of control, and we need to 0:18:19.680 --> 0:18:21.040 get that back into control. 0:18:21.480 --> 0:18:21.640 Now. 0:18:21.680 --> 0:18:24.480 Many countries around the world have something called a sovereign 0:18:24.880 --> 0:18:27.879 wealth fund, and the United States doesn't have that. We 0:18:27.960 --> 0:18:30.720 have the printing press, we print dollars and people buy 0:18:30.720 --> 0:18:32.120 those dollars, but we don't have. 0:18:32.040 --> 0:18:32.880 A sovereign wealth fund. 0:18:32.880 --> 0:18:35.880 President Trump has signed an executive order I think, creating 0:18:35.920 --> 0:18:38.760 a sovereign wealth fund. Where would the money come from 0:18:38.800 --> 0:18:39.960 for that sovereign wealth fund? 0:18:40.000 --> 0:18:42.640 Well, David, as you know, most countries that have sovereign 0:18:42.640 --> 0:18:47.320 wealth funds are because they have certain resources today that 0:18:47.440 --> 0:18:48.400 are going to be limited. 0:18:48.600 --> 0:18:50.240 Obviously, oil and energy. 0:18:50.040 --> 0:18:52.439 Is a big focus, and the purpose of the sovereign 0:18:52.520 --> 0:18:56.440