David Rubenstein | Full Address and Q&A | Oxford Union

[Music] [Music] pressing them up that's okay yeah sure yeah so thank you very much for inviting me how many people here are from England how many from the United States how many people are from the rest of the world and where else Wow how many people here think Oxford's the best university in the world these how many people think your parents think that you're not working hard enough anybody okay okay how many people here know exactly what they're gonna do when they graduate okay how many people have no clue what they're gonna do okay how many people want to work in private equity okay all right here's what I'd like to do today in the time I have and I'll take questions I'd like to talk a little bit about my own background because it might be similar to some of yours and tell you how I came to be in the position where I was invited today to speak then I'll talk about the subject that was advertised which is some global issues and then I'll take questions on anything but he wants the history philosophy philanthropy politics Donald Trump which I usually get asked a lot about anything I'll talk about anything I don't know I can compete with Monica Lewinsky a previous speaker in some subjects but I'll I'll do the best like that so I am my last name is Rubenstein and you know very often you could figure out that that's a Jewish name and very often people think if you have your Jewish in the United States you probably have a father who's wealthy or lawyer doctor but actually there plenty of blue-collar Jews my father dropped out of high school to go into World War two he came back he met my mother they married at if what I think is a ridiculously young age she was 17 he was 20 I was born more than nine months later and my father worked in the post office entire life had never made more than seven thousand dollars a year now in at the time when I was growing up I thought wow that's not great I don't have a lot of money but it's a big big advantage to grow up in a family it doesn't have a lot of money because if you have the unconditional love of two parents and you know you have to do something with your life by yourself it's a big advantage my children have grown up in a wealthy family it's a big disadvantage some of you who come from very wealthy families of any of you have that it sounds like it's great but actually it can be a big disadvantage particularly because if you achieve anything people say well your father bought that for you or your mother bought this for you so actually it was a big advantage though at the time I didn't realize it I went to a large public high school and was not you know a particularly gifted student or it's certainly not a great athlete but I got a scholarship to go to a place called Duke University some of you may have heard of it it was not a basketball scholarship I can assure you I was such a bad basketball player that I was the only person in Dukes history got cut from an intramural basketball team with only four other people on the team so I had no money but I did okay and at school but I what I wanted to do was to go into public service and give back to my country I was in the sixth grade when John Kennedy was inaugurated president I'd States and he said famously on January 20th 1961 ask not what your country can do for you but what you can do for your country he was only a 14 minute speech it was a brilliant speech it was poetry and prose form and it really inspired my generation to do go into public service the idea of making a lot of money was not in that time something that people thought about you there were no hedge funds private equity funds our technology startups it didn't exist if you wanted to go into business you either work for your father's company or you worked at IBM or some large company so the idea of going to business wasn't on my my my mind was to try to give back to my country and to try to do something useful and I was inspired by John Kennedy so I thought I'd be a lawyer go work in government and so I got it I decide to go to law school and I applied to many law schools and I was fortunate to get into all of them but there was one law school that I had applied to at the last minute and they sent me a paper saying I want a full scholarship so this was the University of Chicago Law School so I didn't really know the school but a full scholarship my parents didn't have any money so I said yes and they then sent me a letter saying send in 50 dollars and you'll get your position reserved for next year and then I got another letter saying send in your $50 Reserve your housing I didn't actually have a lot of $50 extras running around so I said I'll send in $50 to the housing people surely I'll tell the law school I'm coming that logic didn't actually work so I showed up the first day of law school and I said Here I am David Rubenstein full scholarship recipient they said no no you didn't send your $50 we gave that scholarship with somebody else so I'm starting to cry in the middle of the realized my legal career is over my chance to help my countries go on what am I gonna tell my parents I lost the scholarship all the other law schools have already started finally I think teether because I was crying so much or they didn't wanted me to commit suicide or something they came out and said I will give you the scholarship so I got it and since then I crying can well again help since then I've given them 40 million dollars in scholarship money to make up for it so it was a good day so I went to law school and when I what I wanted to do was to go work in government work at the White House and be like John Kennedy's people and so the person who wrote that great speech for John Kennedy was a man named Ted Sorensen the greatest presidential speechwriter in history so he was practicing law in New York and affirmed that time called Paul Weiss I went there I started practicing law and worked for him and after about a year or so it became apparent to me that I wasn't that great a lawyer because the clients would say well how much longer you gonna do this and if they put people in the firm realized I wasn't a great lawyer they said how much lawyer you're gonna stay here so I got the hint that I wasn't that good and you know if you're not really enjoying something I didn't really like to practice law and you're not that good at it you should do something that you're better at so I realized I wanted to really go and govern I didn't care about the practice law so Ted Sorensen got me a job with a man that he thought might be President I'd stayed C helped me get an interview and the man's name was Jimmy Carter I'd never really heard of him but was a peanut farmer from Georgia I got an interview I went to got the job when Jimmy Carter was running in 1976 against Gerald Ford he was 33 points ahead of Gerald Ford the incumbent president when I joined and Carter won in the end after my work by one point so people said well you know Carter would say you know I was 33 points ahead before you showed up and now I'm only won by one point so what was your contribution but in the end as we've observed people who work in White House staffs are not their own merit they worked in the campaign so at the age of 27 I became the deputy domestic policy adviser to the president's a job I wasn't qualified for but I didn't think Carter was qualified either he didn't know anything I didn't know that one of my jobs with the fight inflation I got it to nineteen percent the highest everything and you know there was a rumor that if Carter was reelected I was going to be the senior domestic policy adviser and President Carter still thinks to this day that's why he lost the reelection to Ronald Reagan so I had to go back and get another job we lost the election to Ronald Reagan and be careful what you wish were we wanted to run against Ronald Reagan because we said he's so old how could he possibly run for president he's practically in a wheelchair he should be practically in a in an invalid we thought because he was so old he was a person who we thought just couldn't possibly be president I'd say that that age of 69 now I'm 68 so now it doesn't look that old today 68 69 looks like a teenager to me but we thought he was too old so be careful what you wish for he turned out to be a very good debater tended to be a much better candidate than we ever thought but I thought okay after we lost the election some of you will have the same experience unfortunately people will tell you how bright you are you went to Oxford terrific you're brilliant we want to hire you but when you actually go to get hired by them they might find an excuse so people that came to came to me all the time and said we want to hire you when you're ready to leave the White House so the day after we lost the election I started calling all these people and none of them would call me back because nobody wanted a Carter White House a when the age of Reagan was there so it took me a while to find a job and even though I'd gone a good law school and I'd go into a good law firm I work in the White House it took me allow and in January 20th came Reagan was inaugurated I still didn't have a job and then you know February came March came April came make a my didn't have a job I kept telling my mother I have so many job offers I don't know which one to take I just can't pick them off and she said well why don't you take one of these up I finally I got a job somebody felt sorry for me I started practicing the law again and actually I realized once again I wasn't a good lawyer and so my client said to me what are you thinking of doing next and my my law firm partner said maybe you should think of something else so then two things I read changed my life and it led to the point where I am today here one was I read that a man named Bill Simon who had been secretary of treasury in the Ford administration he left the Ford administration in for Carter became president and what he did is he went out and did something called a leveraged buyout I didn't know what that was but he put in a million dollars of his own money and he made 80 million dollars two and a half years later I realized that was better than practicing law so I said okay I want to do that I didn't know what it was but I thought it was profitable and if I was gonna be you know not a good lawyer I might as well be in the business side and make more money so I went to a man named Bill Miller who'd been Secretary of Treasury in the Carter years and said why don't you start a leveraged buyout for him in Washington like Bill Bill's Simon did in New Jersey and he didn't really want to do it maybe because he didn't want me to be part of it so in the end I came up with the idea of starting my own leveraged buyout firm in Washington the first one ever there I didn't really have any financial experience I don't have any money I recruited three people who had financial experience and said to them that I had some money and mumble that they should come and make a lot of money they showed up I said I meant to say to them that I was gonna get the money I didn't really have it so I then took about half a year to raise five million dollars to start the firm and today it's one of the largest private equity firms in the world it's a global firm we've we we manage about a hundred and seventy five billion dollars and we've been fabulously successful in investing money we've averaged about a twenty seven percent rate of return gross rate of return per year for thirty years so if you put your money in the bank you get 0.1% perhaps we've averaged 27 percent a year on investing more than a hundred billion dollars so that's produced a very good financial situation for me and my partner's and Forbes magazine a few years ago had an article about my net worth and I realized when I read it that probably was reasonably accurate and I had a lot of more money than I needed and I didn't know exactly what's the best thing to do with it so when you have money and all of you probably think this is a funny thing to say you know you it's not that easy to figure out what to do with a lot of money you know let's suppose each of you had I said to each of you I'm gonna give you Bill Gates's problem I'm gonna give you a hundred billion dollars all right so you're gonna quickly go buy a house another house a boat a plane artwork and then you've got ninety nine billion left what are you gonna do so you know that's Bill Gates's problem I didn't have quite that much money but I had a fair amount and so what we can do with money these are the things you can do what the ancient Pharaoh's did you can build pyramids and take your wealth with you and be buried in it I hope you leave that wealth in the afterlife but there's no evidence you really need the wealthy afterlife so you've eliminate that second you can buy a lot of things you just keep buying everything you can how many planes you want more planes more I work but after a while it gets tiring to have too many things so then you basically have to decide if you can't spend it on more things you have to give it away and you can give it away in three ways one you can give it away to your children and that's a great tradition throughout human history give it to your children but you may not agree with this but you can spoil your children by giving them each a billion dollars you know if you inherit a billion dollars you know is that gonna make you a hardworking person nobody's ever won a Nobel Prize inheriting a billion dollars they inherit a billion dollars they're not gonna work hard enough to win a Nobel Prize so I thought I didn't want to ruin my children's life I'm not sure they completely agree with me but I didn't want to ruin my children's life by giving up a lot of money so I thought I'd give them a good education and that would be then they'd be on their own so then you have two other things you can do with your money you can give it away while you're alive which is a very common thing to do or you can wait to your died because you're not sure how much money you're gonna you're gonna need to before the end of your life and just let your executor give it away but I didn't think I would I would really be in a place where I could see where my executor was doing with the money so I decided to give my money away and as I was thinking about it bill Gates called me and he said he was starting the Giving Pledge and it says you give away half your money upon your death or doing your life time and I said I'm gonna give it all away so I signed the giving pledge there were 40 of us who initially signed it and I've been very actively involved in that movement and as I've given away the money I give it away to the educational institutions a lot I've been on the board of Hopkins Harvard now and a chairman of the board at Duke as you heard and and univers Chicago a lot to education a lot to medical research but one area that I've done a little bit more than other people have is come think I've coined the phrase were called patriotic philanthropy and that means giving money back to remind people of country of its history and its heritage the good in the bad so on I had a chance wants to buy the copy of the Magna Carta I bought the only copy in private hands of the Magna Carta there are 17 extant copies 15 in England one in Australia and there was one that Ross Perot had bought in United States he'd actually bought it from a family that had it in his possession in England for five hundred years he sent his lawyer over to buy it he negotiated price in nineteen in the early 1980s he the lawyer rolled up the Magna Carta in a tube got the British customs I said what's in that coop he said the Magna Carta they said oh sure go ahead and and he took it out of the yeah I've since bought it from him and I have put it on display in the National Archives to make sure that Americans can see this because it was very important to our history as well as the history here and then I bought other historic documents the Declaration the pendants the Thirteenth Amendment freed slavery's they meant sleeve slaves the emancipation proclamation of Bill of Rights and put them on display so Americans can see them because our country doesn't really know our history so well my thought is that people can see these original documents they might be inspired to learn more about our history it's really sad now that we don't teach civics in my country anymore and we don't require people to take American history so you say surveys like this right now recent survey by in the University of Pennsylvania organizations showed that three-quarters of Americans seventy five percent cannot name the three branches of our government and 25 percent of our people cannot even name one branch of government it turns out that when asked high school sophomores the United States were asked to name the three to give the first three names of any founding fathers they were unable to do that on average what most of them could name the first three names of the three stooges rather than the first three names of the founding fathers 35% of Americans when asked what River to George Washington cross during the Revolutionary War said the Rhine River which happens not to be in our country and there's a TV personality you knighted States named Judge Judy maybe some of you've heard of her well ten percent of Americans think she's on the United States Supreme Court so and course not yet she hasn't been appointed yet but in any event I I think that I'm trying to get Americans to learn more about our history on the theory that if you're more informed you may be will be better citizens to be better citizens maybe we'll have a better democracy and then in that vein I've tried to find historic sites and fix them up so when the Washington Monument had its earthquake damage I decided I would you know put up the money to fix it and the same thing is true with Thomas Jefferson's home Monticello or James Madison's home Montpelier or other kind of historic things and try to fix them up so more people will visit them and and see them and in the end what I've tried to do is is say to myself and everybody here should say this as well you know you're on this earth for a very short period of time now as students you're relatively young the last thing you're thinking about is the end of your life but as you get closer to the end of your life as I am I'm 68 I have an actuarial life of maybe 85 if I live you know the normal life is band what are you going to do with the rest what are you going to do to justify your existence on the face of the earth all of you are put here for some reason nobody knows exactly why we're here but we are we're here for a relatively short stand humans have been on Homo sapiens I'm on the face of the earth for roughly two hundred thousand years and you're gonna live anywhere from 80 to 100 years if you're lucky and but that's a very short time span what is it that you're gonna do that justifies why you're here and what are you going to do that makes you feel you've done something that you can be proud of with your life or something that your parents can be proud of your partners can be proud of your children can be proud of so you know as you think about it one of the things that I think is most important is to try to help other people you know helping yourself isn't such a wonderful thing but the most important thing that probably distinguishes humans from other species is that humans have a natural tendency to want to help other humans not just people in their own family and I think to some extent I made a mistake in not focusing on philanthropy and giving back to others until I really was wealthy I should have done it earlier and I would be much happier today I would like to remind people that philanthropy is an ancient Greek word that means giving a loving humanity doesn't mean rich people writing cheques so all of you while you're focused on your studies you should think about what you can do to make the world a slightly better place what your community you can do to make your community a slightly better place your country a slightly better place or your neighborhood something so you can say when you get to my age or younger this is what I did to justify my presence on the face of the earth this is what my mark is this is what I did to show people that I did something useful with my life you know you can have a lot of degrees but if you don't do anything useful what you what good is having the degrees so the degrees are really a means to enable you to do something useful am I and I hope if you take anything away from what I'm saying it is that you have an opportunity because you're all gifted your wouldn't be at Oxford if you weren't gifted take advantage of that gift do think of something that no one else is doing like I did in patriotic philanthropy nobody else was doing the kind of things I was doing and and and do something useful give back to your society and you'll feel much better about it and I try to remind people that for people that are involved in philanthropy you're likely to live a longer life and you're likely to have a special place in heaven reserved for you when your time does come now you might laugh at that but why would you you know take a chance that I'm wrong so think about the things that you might be able to do to make your the world a slightly better place your country a slightly better place so let me in the remaining time I have before I take questions address the subjects I was supposed to talk about so let me just talk briefly about the economy and let me at the economy first and then I'll geopolitical events the the the economy in the Western world and actually around the world today is in pretty good shape now the surprising thing is that is in good shape for this reason since World War two Western society the United States and Western Europe have had recessions on average every seven years the last great recession ended more or less in June of 2009 seven years later would be June of 2016 so we didn't have a recession in June Taos June of 2016 we haven't had one this year we're not likely to have one before the end of this year or next year so we are actually in a very extended growth pattern and that's good because when you have more growth you have more people employed you have full employment economies do better and so forth people are happier but we have to recognize that at some point there's going to be a slowdown and when the slowdown occurs we have to recognize that it could be severe again just as it wasn't the Great Recession so I think people have to move forward with the economy as we see it but we have to be very prepared for a potential slowdown that could come now I don't know exactly when it's going to come nobody really knows economists are not really good at predicting the future in that regard but that's a problem that we have around the global economy but three other or four other problems I want you to focus on is this about the economy my point is it's really really pretty good right now it will slow down it won't be so good and maybe six months maybe a year maybe a year and a half more more likely maybe two years from now the global economy has these issues one income inequality the income inequality in Western society is getting worse my country it's worse than it's ever been worse than it was in the Great Recession a Great Depression so the wealthiest 1% of our my in my country own roughly ten percent of all the assets the wealthiest 10% own roughly sixty or seventy percent of all the assets and our wealth in our country and this is true in Western Europe as well the income inequality is growing and it's growing for a number of reasons in my country in one part it's because we are not educating a large part of our society in my country in the city I lived Washington DC 25% of the people who enter high school public high school don't graduate if you don't graduate from public high school you're not likely to earn a very good income and if you don't learn how to read you're in worse off many people who graduated high school dropped out because they can't read and illiteracy is a gigantic problem in my country twelve percent of the people in my country cannot read they can't read and if you can't read you're more likely to be in the prison system more likely to be a juvenile delinquent so the income inequality in United States and Western Europe is actually growing that's a big problem a second problem is demographics in Western society Western society Western Europe United States the populations are aging they're aging because we have better health better nutrition when people first came out of caves 200,000 years ago the average life expectancy was 20 in 1900 in Western Europe and the United States the average life expectancy was 49 today it's roughly 80 or so so as people age we have many more people to feed many more people to deal with climate change issues today when I was born there were two and a half billion people in the face of the earth in 1949 now there are seven half billion people where I'm projected I actually will be 9 billion people before you're projected to die actually there'll probably be 12 to 15 billion people so as we have the limited amount of resources in the globe we have to realize we have these growing populations and people are aging and aging and aging the Europe the average age is 40 is 41 averaged agents are pandas 45-day average age United States is 36 Europe is aging in part as the United States because people are not reproducing enough in Europe your population is stayed roughly the same a population a woman of childbearing age has to have 2.1 children and their childbearing years Europe is averaging maybe 1.4 1.5 some countries maybe 1.6 but if Europe is therefore not reproducing itself the population is going down the younger people are not coming along enough and the older people are living longer and so you have this demographic problem in Western society which is going to cost all of you a lot of money one of the related issues is we have guaranteed in Western societies very large pension benefits the people and large social network for people and the cost of that is very high in my country we now have 20 trillion dollars of debt 20 trillion dollars of debt when I was in the government in the Carter years we had less than 1 trillion now we have 20 trillion somebody's gonna have to pay that off and so in the end what we're going to have to do is we're gonna have to cut the benefits for elderly people got the benefits for people who are disabled cut the benefits for people who are who need a social net otherwise we are not going to be able to survive as a society because there's not gonna be enough money the same is gonna be true in Europe so the problem is you've got a demographic problem you we have people living too long to some extent which is not a bad issue but it's unfortunate that we can't afford the people living as long as we can unless we have more money and that relates to another issue that we have governments are in the Western world have have borrowed too much money we have enormous amount of debt in Western European countries and and the United States and other in Japan enormous amount of debt that somebody's gonna pay off and I'm looking at the people gonna pay off a lot of this debt because you're gonna have to work hard to pay off the debt to pay for the retirements of and the pension benefits of many other people so there aren't the economy is reasonably good now but there are some problems we should worry about one of them as I mentioned is the debt another is the the demographic issues not enough young people too many older people and and another problem is the income inequality let me shift for a moment to the geopolitical situation today the world is is has some major geopolitical issues they're always going to be geopolitical issues what is the most significant one today in my view it's the uncertainty in the turmoil in the Middle East Iran is still country that is maybe in some people's view fostering some things around the other parts of the world that aren't wonderful but there's uncertainty in Iran there is uncertainty now in in in Syria Syria's had a terrible civil war hundreds of thousands of people been killed there's no real end in sight maybe somewhat of an end but it's not likely to be anytime soon Iraq still suffers from the problems of the invasion of the United States you have the problems in Israel and Palestine still not coming together you have problems of of in Turkey there's the uncertainty of many parts of Turkey about the government the problems of the Kurds and so forth in Iraq so you have a lot of uncertainty in the Middle East and and the Terrorism that exists because of Isis or al-qaeda is something that can spread throughout the world not just the Middle East so that's probably the greatest geopolitical problem I don't think there's any great solution anybody has do it nobody seems to have come up with a great solution for Syria nobody has a great solution for Iraq nobody has a great solution for the Iran Saudi Arabia related issues and of course there are a number of wars going on now in in other parts of the Middle East like Yemen a second issue is the spread of nuclear weapons now north korea has brought this to the table and the forefront north korea probably has some nuclear weapons they probably can't deliver them but if they are able to deliver them that changes the the the equation a great deal in the far east and maybe even in the united states because they might be able to launch missiles to the united states but it north korea is not the only country that wants nuclear weapons other countries probably are interested in getting them and might try to get them if North Korea gets them if North Korea we got north nuclear weapons and militarized them it might be this ace at South Korea or Japan might want to do the same and you have other countries in the Middle East that might be interested in nuclear weapons as well if Iran were to get nuclear weapons at some point so the whole spread of nuclear weapons is a major problem as well I think then you've got the third problem of refugees we have refugees from Syria in other parts of the world to come into Europe and other parts of the world and we haven't really dealt with that issue adequately in terms of how to deal with with that last issue I mention is the United States the United States has been a leader in the post-world War two of the global political military economic environment I think right now we are not seen by people around the rest of world as being able to fulfill those roles at the way we did before maybe you could say it's because of Donald Trump maybe it's for other reasons but there's no doubt that the United States is not playing the same role that used to and I think the United States and Western Europe should recognize that the power in the world is really shifting from the west to the east you know from most of the 20th century the West really dominated the the global economy of global political scene global military scene I think now we're seeing in the 21st century a shift to power in in Asia particularly China and and will be India as well and therefore the wealth of the world the power of the world the military might of the world might shift from the Western world to the eastern world and as those of us who live in the Western well at least were right here in the Western world we have to recognize we have to make adjustments the us-china relationship is probably the most important bilateral relationship in the world and now it's in reasonably good shape but a book has come out recently by a Harvard professor who said that actually there's something called that the lucidity strap which it's more or less means that when you have a rising power like China if you go back through history you often see rising powers getting into military confrontations with with the reigning power if the United States is the reigning power you could argue that China or as a rising power there might be a military confrontation now the Chinese don't agree with that view some people in America don't agree with it but it's something that we should think about which is to say how is the United States going to deal with the fact that China is ultimately going to replace it as the biggest economy in the world probably the biggest military power the world and maybe the most important political force in the world and the United States having their justed that is a geopolitical issue that we have to have to answer and address let me pause there and say I'm happy to take questions about anything that I talked about or anything I didn't talk about I didn't really talk too much about business didn't talk much about the Donald Trump I didn't talk much about other things you might be interested but fire away any questions yes sir if you just wait - okay okay David thank you very much for coming tonight so one of the two co-ceos you've recently appointed as mr. Cao soonly of Korean descent and my question is how do you intend to place Carlisle an American investor in Asia and you see mr. Lee playing any particular role in that effort okay what he's referring to is this I started Carlo in 1987 and I brought in some other partners for the 30 years or so I'd been the co-ceo we announced a few weeks ago that I was going to step down as the co-ceo and make myself the co executive chairman and my theory was that you know when you still in your 60s it's better to do this when you're in your 70s when your company's in good shape it doesn't look like you're being pushed out and there are a lot of other things I want to spend some time on including increasing my commitment to philanthropy and so forth so we decided we had some very talented people who we didn't have as the next CEOs one of them is a guy who actually lived in England for a long time for us Glen Duncan Harvard Business School graduate been with us for 23 years another one is cue song Lee a Korean American who went to Harvard Harvard Business School and he has lived his whole life in the United States and so his being korean-american isn't necessarily gonna change our focus on Asia we are the biggest private equity investor in China now of the global firms and we have a big presence in Asia and I do think that's where a lot of the growth is going to be today in the private equity world 83 percent of all the private key dollars are invested in the Western world only 17 percent in the in the emerging markets and and merging markets have depending on how you calculate between 45 and 55 percent of the global wealth and it's rising so gradually the 17 percent will rise and I think more and more effort will be made to by firms like us to put more money in China Southeast Asia India I wouldn't say kusang Li because the Korean America will make a difference in that but our overall focus is to is to put more money in the emerging markets so-called and the emerging markets for those one of the wonder where that phrase came from there was a man who worked at the World Bank in 1981 and he was trying to raise a fund to invest the publicly traded stocks of countries like Taiwan Thailand Mexico and he went in front of a group of about this size and said he's going to call this a third world fund and people said that seem pejorative he said I called an undeveloped world fund they said that's even worse so over the weekend he went home and he came up with an idea of calling it an emerging market fund because everybody likes to emerge and so that phrase took hold and now for the last X number of years we've been calling a lot of countries emerging markets but Nene and China is the second biggest economy in the world maybe the biggest and it's still hard to keep calling an emerging market but that's what we call it these emerging markets of China India Brazil among others are where the real growth is going to be in the global economy and that's why our investors are going to put more and more their time and attention yes ma'am okay thank you for speaking to us tonight sure so my question is you've talked a lot about preserving American history um and what are your thoughts about the Confederate monuments that are currently the Confederate monuments in the South that are currently being disregarded cuz you talked about being committed to the good and the bad industry okay so when I decided to put up money to repair Monticello which is Thomas Jefferson's home I one of the slave quarters to be built out so people could see that he was a slave owner and it's it's one of the in incan paradoxes of American life we had Thomas Jefferson wrote in the famous declaration independence that might not be that popular in this country but he said that all men are created equal we hold these truths to be self-evident that all men are created equal but he owned 100-plus slaves and he had two slaves with him when he wrote that so how could we how can we say all men are created equal and not even mentioned women ultimately the the in America we had slavery and it was embodied in our Constitution basically we allowed for another 20 years slaves to be imported and we was a birth defect in our Constitution and ultimately it led to the Civil War and then after the Civil War while we ended slavery we went to Jim Crow laws that provide a lot of discrimination and I wanted to make sure that people understood when they see great men like Thomas Jefferson that they they had flaws among their flaws they were slave owners George Washington was a slave owner Thomas Jefferson was a slave owner James Madison's slave owner I think eight of the first eleven presidency United States had been or were slave owners the only one founding father if all the founding fathers actually freed his slaves upon his that and even that one was done a little unusual George Washington on his in his will said I will I want my slaves to be freed upon the death of my wife now how would you like to be Martha Washington sitting around Mount Vernon knowing that all these slaves know as soon as you die they're free so she didn't wait sea freedom but I I think you need to show the good in the bad of history and in in terms of the Confederate monuments what people would you're referring to is this not after the Civil War but probably in the 1890s our country began to maybe because of racist reasons in the south they began to idolize people like robert e lee or other civil war veterans and and civil war heroes from the south and monuments were built to them they're their images were carved in mountains and statues were built now people say well why are we idolizing these people who really fought to defend slavery and so there's been a real relook at this i'm the chairman of the Smithsonian Institution in Washington and one of the proposals in Congress is that all the Congressional Medal all the Congressional monuments that are honoring Confederate generals be given to the Smithsonian to store somewhere and I don't know if that bill will pay us but there's no doubt that people are read looking at how great figures in history acted and we are looking back with today's moral standards but I think it's fair to look back and say these people did things today we don't think is appropriate but I don't know that we necessarily should destroy every monument but we should make certain at least for purpose of history we we know what people thought for example in the Middle East right now many alqaeda and predict the Isis have destroyed historic monuments that are thousands of years old and so that's we don't like that we're trying to preserve these things the Smithsonian other people are trying to preserve and so we know what history is like so some of the Confederate monuments memorials maybe they serve a purpose to show what people thought about these people at a certain given time but there's no doubt that we have to recognize that the Confederacy was really about preserving slavery to some extent and that's not a good thing yes sir thank you very much for sharing your your family background with us my mom is actually a mail carrier so you know your points about how it can be it right and an advantage coming from a working-class background really resonated with me before I asked the question can I just see a show of hands who in this room comes from a working-class background yeah so we see some hands but maybe if we would have asked the same questions when you get a went to school we would have seen a couple of more hands so why why do you think that is why do you think social mobility is is more difficult nowadays than it was before and what can we do about that well if I knew that answer I'd be running for president states there is a income inequality is something that is getting worse not better in the United States and I think in Western Europe and I analogize it to a something in physics it was thought for a while that after the Big Bang Theory that the Stars and and the universe was expanding but then it was going to come and come back and it was shrinking and coming back to the center we now know that was wrong actually the universe is expanding and it's the same thing with income equality we thought as we got better educated more sophisticated we could design economic systems that bring people back to the middle it turns out that as sophisticated as we are it's going the opposite way it's it's like the universe it's expanding and the income inequality is worse I think it's going to take decades if not generations before you can fix it at least in my country because a better education and so forth but social mobility is a different issue social mobility deals with the ability of people at the bottom to rise to the top now in in our case we call the United States the so-called American dream that you can come in as an immigrant or from a blue-collar family and you work hard you can get to the top there's a sense now I'm particularly among minorities in United States that that opportunity is gone or reduced and that very often people in the underclass don't think they can do what I did they don't think they can rise up III think that's unfortunately I do think generally if you work hard and you're smart you will probably do better in life than if you're lazy and dumb but that's not always the case generally people though who have changed the world come from blue-collar fact backgrounds or lower middle class it's rare that somebody was born into the Forbes 400 and invented Amazon or invented you know great companies that generally if you look at the great entrepreneurs and you look at the people in the Forbes 400 at least the United States these are people came from blue-collar backgrounds sometimes dysfunctional families and and also from lower middle-class families if you're in the wealthy if you're born to what great wealth it's actually a big disadvantage if you're gonna try to be an entrepreneur because you're usually I'm not going to be hungry enough you're not gonna be dedicated enough if you're gonna be an entrepreneur like Jeff Bezos or Steve Jobs or with you know Mark Zuckerberg coming from a not wealthy family gives you much more Drive and so that's why I said in the beginning I feel advantage to have have no money when I grew up by the time I didn't know that my children have a big disadvantage because it's hard for them that to be as driven as I am because they just know that I've got enough money they probably are not going to be on the street anytime soon other questions here go ahead thank you for your presentation Carlyle Group is notorious for being heavily involved in geopolitics right and has also been it's controversial for accusations of insider information and business model heavily reliant on the the world of politics okay how much was this envisioned I mean not the controversial part but envisioned in when in your planning uh and how much they just uh I mean I try to address what you're talking about when if you go back and look at the business plans of Carlyle Blackstone Apple Microsoft Amazon the business plans that the the founders created they are no relationship to the company that actually was started that that grew because you have to evolve in business and you just you don't involve you if you stay with their business plan for five ten fifteen years it's going to be out of date so we had a business plan that was basically starting a private equity firm in Washington and because we were in Washington we thought we could take an advantage that we understood government better than people in New York so we'd say we will invest in companies heavily affected by government and we'll understand those better than the guys in New York it sounded good I'm not sure it was really true in the early days nobody ever heard of me and so we had an opportunity to bring in the former Secretary of Defense from Ronald Reagan named Frank Carlucci he was looking for a position to kind of be associated or firm to be associated with I brought him in and then later Jim Baker was available former Secretary of State then George Herbert Walker Bush was available then John Major from this country was available and I made them advisors partners consultants it worked reasonably well in the sense that people knew who we were because we would have them if I would invite you to a dinner to hear me to make a speech nobody would show up but if I invited you'd have here dinner dinner speech with George Herbert Walker Bush he would show up and therefore people got to know us and it gave us more brand recognition unfortunately when George W Bush became president and he was somebody who had served in one of our boards but I had the you know one time suggest maybe get off the board because I didn't think it was you know it was probably a good thing for him to be on the board he became president I'd never thought he'd be presidents he gave an interview somewhere where I said something like if you'd asked me to name you know a million people who are equality to be president I'd say George W Bush win them in one of them and unfortunately I thought it was off the record in one of the New York Times and front-page New York Times before he's elected of week before he's running for election and he got elected and I saw him afterwards I said I'm sorry about that article in The New York Times that said I didn't think you were qualified there were million people more qualified he said I don't read the New York Times what was in it what happened was when he became president george w bush alton when he led the invasion of Iraq we were blamed for Iraq because his father was affiliated with us and we had Jim Baker and so it was really painful because people thought that we were supporting the Iraq war we had nothing to do with the Iraq war but ultimately we tried to transition and those people left the firm and we no longer go out and hire former government people because we're well-known enough we don't really use inside information that's kind of illegal but but there is a perception that we do understand governments and the truth is all the private IP firms understand government's if you know governments do how heavily affect the way business is operates so understanding government isn't the advice but we don't really go out and hire government people so much anymore because I don't want people to think we're doing anything inappropriate so we evolved out of that 15 plus years ago other yes yes sir so one of the key aspects between the relation in the relationship between the west and east as vacant on the cooperation and as I'm sure you know there are a lot of Western and especially American companies that have quite a tough time in China right and obviously Carlyle had their own experience in China I guess my question is what what would your recommendation be for Western American companies going to China dealing with the government or anything else I think the greatest place in the world in which to invest on Bavasi bias is the United States it's a big market the rule of law the transparency the quality of financing opportunities the quality executives the quality of the the infrastructure it's a great place in which to invest and probably while we're not going to grow at five percent per annum anytime soon or maybe never again it's still a pretty safe place to invest and and and therefore I would say the best place in the world in which to invest but outside the United States the greatest country in the world to invest is easily China given 1.4 billion people a growth rate for the last 30 years of 10 percent the last couple years per annum ten percent I last couple years six and a half percent probably gonna grow at six percent or so for quite a time in the future the the country is my view very capitalistic in many ways if you look at UN statistics one out of every ten adult Chinese is an odd preneur by the UN definition a higher percentage than any other country when I go and meet with Chinese government officials they know more about my business than I do in some cases when I meet with members of Congress have to explain to them what a hedge fund is what a mutual fund is what a private equity fund is they don't know that Chinese government people they seem to know they're very involved and understand the way the business world works so I think the key if you're going to invest in China is to have local people on the ground everybody we have in China we have about 15 18 percent of our entire workforces in China they're all local Chinese but we don't take Yankees incentive the China yeah that's not impossible strategy to make work but we don't do that we hire hire local people make sure you understand what the government is thinking trying to fight the government isn't generally productive so while we've had our challenges sometimes the do deals in China generally we've we've done well we've done about a hundred transactions we've made a fair amount of money and we try to make it clear that we are not there to permanently replace Chinese companies we are there to help companies and ultimately we'll sell them to others who might be Chinese owners some of the large companies like GE and others have complained about China because the Chinese government doesn't really want GE buying companies and making it part of GE forever but in our case from private equity people we're buying companies we're holding them for a relatively short period of time and we're typically selling them probably to local people so I think knowing the rules of the game knowing government officials an appropriate way I'm having local people is probably the best thing to do and spend a lot of time there I go to China six or seven times a year we have a lot of people there the senior people in our firm are always in China so making sure that people understand what you're dealing with is important and therefore you have to have your senior people there a lot yes ma'am yes right here thank you for your wonderful speech I wanted to know what is your opinion about the so-called culture of greed in while Wall Street doctor agreed well you know throughout the history of the world at least the last thousand or 2,000 years when you've had more or less semi capitalistic or capitalistic systems as people get wealthy they tend to like to be wealthy they'd like to get the benefits of having money and therefore greed is a a vice if you want to use the word vice that's been around for quite some time I'm not sure Wall Street or the United States where Wall Street is any greedier today then people were a hundred years ago or a thousand years ago but it's more visible because it's more transparent where people write about it I do think that people in Wall Street to some extent are very focused on making money that's how they measure their success and so forth and there is a obsession with how much money you're gonna make I do think that people in Wall Street are often very philanthropic they recognize after a while how much money do you really need so people on Wall Street are philanthropic they have a bad image because people don't around the world don't generally think of showing the United States I really love Wall Street people they're so nice they're charming they're there they're there kind to animals and so forth they don't really think that they think that Wall Street people only care about money so you can be a politician United States and always run against Wall Street and do well there's no doubt that Wall Street doesn't focus on the making of money I don't think it's worse today than it was 10 years ago 20 years ago 30 years ago but it's more transparent and because we keep lists of how much money people make and how wealthy they are people know more about it before them than before but I don't know that it's any worse than it's been before right now while she is doing quite well and so they're making a lot of money there that might change in time but clearly when the Great Recession happen United States Wall Street took the brunt of the blame maybe correctly in some cases and they were penalized a bit but I think we're now a little bit past that and we're not blaming them for all the sins of our society as much as we were before so I'm surprised I haven't had one question about Donald Trump everywhere I go around the world that's the first question but okay people here don't care about him okay yes right here I just want to ask about effective altruism so I mean 400 odd thousand people died of malaria last night you can buy mosquito net for five dollars why is restoring Monticello a better use of your money well in it there's when you have the opportunity to give away money you can pick anything you want that's a great thing about Western society people don't tell you what you have to do with your money now there's poverty in the United States I live in the United States why should I not put all my money towards eliminating power rather than malaria in some other part of the world I'm not living in the other part of the world so you can argue that an American who's made his money in America should give his money to eliminating poverty reducing poverty malaria is something that Bill Gates and others have focused on and I give them a lot of credit for it but I don't have enough money to solve the problems of malaria now you could say any money I give away I should give to malaria but what about cancer what's wrong with solving the problems of cancer what's wrong with solving the problems of of mental health health problems what's wrong with solving the problems of AIDS so you can have a list of large numbers of things that you could say why don't you give your money to that and you know so it's a it's an endless game so why didn't I give money to malaria well I give money to a lot of Health Research and more of my money goes to health research and it doesn't get as much attention I've given 50 million dollars to for research relating to pancreatic cancer which is a very deadly form of cancer it has a 2% survival rate after five years but nobody pays attention to that it doesn't get much attention because so many people are giving money as they should to medical research so I give a lot of money to that but I nobody actually actually cares that much about it because how many people are doing it so to answer your question I I guess you know there's a infinite list of things I could say that I could do better than restoring monuments but in my case nobody else is doing that a lot of people are giving money to malaria research so I'm trying to find something that is distinctive and I can say I did that nobody else is doing in my philanthropy I look for things I don't have the wealth of Bill Gates oh I can't tackle global poverty in Africa I don't have that capability so I look for things where my money will get something started that wouldn't otherwise get started my money will finish something that wouldn't otherwise get started and it will likely be seen during my lifetime to have some impact and where I'll have an intellectual interest and want to stay involved I love you that philanthropist should not just write checks they should stay involved be involved in the boards be involved in helping the organizations so malaria which is a very serious problem and has killed many people I think that the Gates Foundation has done a wonderful job on that with others in Africa among other places and I think it's kind of the meed the need is being met by other people and they're doing it better than I could do it yeah yes sir my question is if you were to recommend a book that you think young people should read or a book that has inspired you the most over the course of your life what book would that be and why well let me answer it this way when I was growing up I couldn't afford to buy books my family to have the money for it so when you in my city would I grew up Baltimore you could get a library card and take books out of the library when you were six years old so when I was six years old I got a library card you were allowed to take out twelve books a week I would read them all on the first day and I had to wait to the next week before I could take another twelve books out reading became a very important part of my life I now read try to read and I do read about a hundred books a year and I try to read books in areas that I'm interested in and I have programs to educate people about things I've read so I started a program to educate members of Congress about American history this so I have a program every month I get a great author Doris Kearns Goodwin David McCullough and a couple days I'll do Ken Burns I have and I have a dinner with members of Congress I do it at the library Congress I invite members of Congress only we get about 300 members of Congress coming in I interview the author about the book and then I have members of Congress ask questions and they learn a lot and I actually have required the Democrats and Republicans to sit together which is a rare thing that they can actually talk to each other and maybe it brings some civility to Washington but I think that my concern about book reading is not just the illiteracy problem in our country twelve percent of the people are functionally illiterate function over it means you can't read past the fourth-grade level twenty twelve percent of our people but a large percentage our people are illiterate which is to say they can read but they don't in our country this is my country this is hard to believe thirty percent of people who graduate from college never read another book in their life their view is I got my degree I don't need to another Brooke look it's sad now I've I can't cite any one book that I would say is the most important book you know I've read so many books I'm inspired by so many I just finished the mention one I just read the other day I never you the author about one of the most amazing things ever in the last 200 years is a book by a guy named Scott Berg on Charles Lindbergh Charles Lindbergh became the most famous person in the history of the world when he flew 33 and a half hours from New York to Paris why so famous because that was the first time that the world was communicating with each other so people knew about all over the world it was a 33 and a half hour flight he wanted a prize for doing it and he became the rest of his life one of the most famous people on the earth and it's a stunning book and the most stunning thing is the man won the Pulitzer Prize for it and he did this enormous research he spent 10 years writing this book he knew everything and then after the book came out he got a letter a call from somebody saying that he didn't have one thing in the book and it was that was a call that led to a letter and it turned out that Charles Lindbergh who had been married for his whole life from the age of 27 or 29 to Anne Morrow and had fathered five children with her at one of whom was kidnapped and killed that he had seven children with three different German women and that had not come out and one of the children of the German women had written to the Scott Berg and said by the way you should have known that he had this other life so you know when you look at great men and women sometimes they have a life that you don't know about so he had these seven children I guess some of whom or maybe all of whom the three German women are alive but that was a book that I just read recently and it's good I'd recommend another book about American history that won the Pulitzer Prize called the Hemings of Monticello about Thomas Jefferson's affair with Sally Hemings with whom he fathered most likely six children and how he you know whether it was an affair or sexual relationship that was inappropriate when our you wanted to find it he spent 39 years of his life in a relationship with a slave and fathered six children with herself her stunning book but there there are a lot of great books I just too many for me to think of which is the most important one other questions yes sir thank you very much it's a pleasure to finally see you in person after the peer-to-peer conversations which are extremely entertaining I'll talk about that yeah about Donald Trump so you both are rich you have a kind of a TV show here's two piers you write your Prentiss do you think you might get into politics later oh yeah I don't think so let me talk about what he's talking about um I I was a asked by somebody to become the president of the Economic Club of Washington which you've never heard of but it's an economic club they have in all big cities and the job was to get one business speaker a quarter to come up and let that person speak and then an audience about this size would be members of the club and they would send up cars and I would read the cards to the speaker and and ask questions well it turned out that most business people are awful speakers they were reading something somebody else had written and they were terrible and then the questions coming up from the audience were worse and I saw I would get the cars and I would pretend I was reading a question from the car but I was making it up and I was trying to make up a humorous question to live in people up and so I realized after a while I'll junked the format I'll just do interviews and so I started a way of interviewing people where I would interview them about their life how they rose from typically obscurity and came up and asked him every three or four questions some humorous questions so it got to be well-known and this and then Bloomberg came along the TV the communications company and said would I do these interviews on TV and I've now been doing it for a year or so and I've done Bill Gates and Warren Buffett Oprah Winfrey and George Bush and Bill Clinton and so forth and it's it's fun to do and I do it without using notes because I my view is if you use notes you inevitably it's a crutch and you don't need the crutch if you have a good memory you can remember the questions you're going to ask and you should you know be able to do this so if you have notes if you ever doing an interview and you look down as soon as you look down you lose the eye contact with the person you're interviewing and that it doesn't seem like a real conversation anyway on the Donald Trump situation I've mentioned one time I was looking for somebody the Economic Club of Washington to - coming out as a speaker and I was wracking my brain I'd taken I already had so many prominent people somebody said how about Donald Trump I said well no this is for serious businesspeople not but somebody said he has a TV show I had never actually watched the card the apprentice I had never watched it but but you know apparently he became famous for that so I knew him a little bit so I did write him a letter and said would you like to speak and right away he came down and writing right he broke me back to letter said yes I'll come okay so like three weeks later we organized it and it came down anyway he was a bigger draw than I thought we normally we'd had three or four hundred people we had 800 people and so in the green room before he said David ask me anything you want but he asked me two questions for sure ask me number one if I'm gonna run for president I said president what I said president I says I said Tom you have no chance I've been involved in government I know you have no chance of being elected you'll be embarrass yourself II said well I'll try for a few months to see how it goes and then I said what's the second question woman asks ask me if my hair is real and then you can feel my hair to see it's real I don't I don't know II asked you a question I want to feel your hair I just want to feel comfortable doing that but okay so we had the interview and it went very well and you can that's it's on the internet now it's about an hour interview and he told me later he loved the interview he sent me a letter saying David was a great interview the best I've had it was well thought through and so forth and so on and by the way did you know David that it was the highest rated show in the history of c-span it was covered live on c-span ik but little thing in our country and I didn't realize it was that good so I called the president c-span said what were the ratings how could they be behind he said there are no ratings nobody could know so so one of the questions I asked Donald Trump was I said Donald do you ever have something called self doubt about anything so what is that what is it self doubt what is that I didn't know what the self doubt was because he obviously very a short person look he's let me just address him and let me conclude with that none of them out of my time but on Donald Trump is somebody I didn't expect would be pressing United States obviously and he didn't expect to be President I think he had a concession speech prepared that day and he thought he was gonna lose because of all the problems he had in the campaign Hillary Clinton was maybe thought to be more qualified and in our country we have a we have a system of polling people and they leave the polls when you people leave a voting booth we have people that work for various organizations they ask you how you vote and these are called exit polls and they're amazingly people are pretty accurate and telling people how they voted and so by these things were accumulated are calculated during the day and by four o'clock in the afternoon most people who are political cognoscenti or relevant people will have the polls and so at four o'clock in the afternoon of the Election Day all of us who saw the polls knew that Donald Trump was gonna lose because the polls showed Hillary couldn't was gonna win Florida go to North Carolina ago in Pennsylvania Ohio because she was consistently two or three points ahead turned out that the polling data was wrong because of 20-some percent of the people voted before the election day and some people must have lied or whatever they didn't wanna admit they voted for Trump whatever he won but he wasn't expecting to win he thought at four o'clock five o'clock six o'clock based on the X suppose he was gonna lose the other concession speech prepared and she had only a acceptance speech prepared she had no concession speech so he was shocked and and you know I talked to me after the election and said I think you should do a better job than you've done to date of of seeing the touching the symbols of our country go see the Declaration of Independence go see the Magna Carta go see the the Tomb of the Unknown Soldier go to Arlington Memorial Cemetery and actually so people you understand that the history of our country in its heritage and he's begun to do that but he's he's different there's no doubt he's different than other people he has some you know he doesn't have a big background in government he's a person ever the very short attention span and you know I just it's just different but the camera's not on when I'll say some other things but I but he's different but I think it's a fantasy why people don't like him to think that he is not happy with the job with the job he's doing I did have a dinner recently the White House and I sat next in for a couple of hours and talked to him and I I said you like the job I love the job you know how was Air Force one it's great how was Camp David it's great he likes the job so it's a fantasy to think that he's gonna just say I don't like the job I'm not doing good gentlemanly so fantasy you think he's gonna be in peachy he's not gonna be impeached the Republicans they're not gonna impeach him it's a fantasy to think that that he's not gonna run for reelection he's gonna run for reelection I don't know if he'll win but he's certainly gonna run for reelection and in a second he he implies he's not he'll have lost whatever power he has so he's different than most presidents we had he's a lot different he's not well-liked in Europe for sure I think he's reasonably well-liked in China reasonably well-liked in Japan reasonably well-liked in Israel reasonably well liked in Saudi Arabia Europe he is hated more or less he just and I don't think he'll be visiting this country anytime soon because turay samay came over early on that showed that there was a special relationship and she invited him to a state visit in England but a state visit requires the approval of Parliament and I'm not sure the Parliament is gonna vote for a state visit so I don't not sure he'll be here anytime soon but he's it's a challenge anything to answer your question I'm not running anytime soon so you don't have to worry but everybody else in the country is Ronnie because Donald Trump has convinced people you don't need to be traditionally qualified so anybody's running that you know the head of Starbucks is thinking of running the head of Disney's thinking and running Mark Cuban a TV star is running everybody's running and because you don't need to be traditionally qualified I did an interview on my TV show of Oprah Winfrey and I said are you thinking of running for president and she said you know I never thought before I was qualified but now I think I could run so you never know actually of Oprah one she beat Iran she'd be a tough a tough opponent so am i with that yeah come join me you

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Published: Tue Jan 09 2018