The transcript from this week’s, MiB: David Rubenstein, The Carlyle Group, is below.
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00:00:02 [Speaker Changed] Bloomberg Audio Studios, podcasts, radio News.
00:00:09 [Speaker Changed] This is Masters in business with Barry Riol on Bloomberg Radio.
00:00:16 [Speaker Changed] This week on the podcast, my conversation with David Rubenstein. He’s co- founder and co-chair of Private Equity Giant, the Carlisle Group. They manage nearly half a trillion dollars in client assets. He is the host of Peer-to-Peer Conversations on Bloomberg tv, as well as PBS’s history with David Rubenstein. He hosts the podcast for the ages. He has written numerous bestselling books, so many, it’s, it’s hard to even keep up with them. The American story interviews with master historians, how to lead the American experiment, how to invest interviews with masters on the craft, the American Experiment, dialogues on a Dream, and now the highest calling conversations on the American presidency. What can you say? A guy who grows up in a lower middle class family gets through college and law school on scholarships and, and goes on to, to found one of the most successful buyout private equity and venture firms in history.
00:01:20 Just an incredible success story. And someone who is just rich with gratitude for where he is incredibly generous philanthropist across a variety of different areas, including what he calls patriotic philanthropy, which is helping to maintain and fix up some of the great monuments in American history that no one really has specific ownership. Everybody just assumes the federal government has taken care of it. And that turns out not to always be the case. He is also the owner of the Baltimore Oreos. Just a fascinating conversation with someone who has a, has a, just an amazing career. I, I, I found this to be really, really interesting and I think you will also, with no further ado, the Carlisle groups. David Rubenstein. Normally I would say welcome to Bloomberg here, David, but you’re here all the time, so welcome to this little corner of the fifth floor of Bloomberg Radio.
00:02:23 [Speaker Changed] Well, thank you very much for inviting me, and that’s a pleasure to talk to somebody who’s also a lawyer, who’s also in the business world and who also reads a lot.
00:02:31 [Speaker Changed] We’re gonna get to your reading history, which is quite fascinating and I’ve been waiting for this conversation for a long time. Your prior book on leadership with CEOs was when we were first supposed to meet, but then that whole little pandemic thing happened and closed the world down. And so we had a postpone until now. But I’m thrilled to have you, since you mentioned lawyers. Let’s talk a little bit about your educational background. Duke Undergraduate Chicago Law School. What was the original career plan?
00:03:01 [Speaker Changed] My career plan was to go into the federal government, be trained as a lawyer so I could go back and make money. Eventually, when I wasn’t in government, I was interested in being a, an advisor to a president. As a young boy, I was impressed with President Kennedy and so I wanted to do what he said, come in and serve the government. And so eventually I thought if I went to law school, I’d have the skillset to maybe be hired in a government and maybe get a job in the White House. And my role model was a man to whom I’ve dedicated this book. It was named Ted Sorenson. Oh sure. Ted Sorenson was the person who helped to write John Kennedy’s great inaugural address, helped to write profiles and courage. He was an incredibly brilliant young man at only 31 when he worked at for President Kennedy. He was in his forties when I joined the law firm after law school that he was at Paul Wiser and Wharton and Garrison. And I hope that some of his pixie dust would kind of fall off my way. And eventually I sort of did find that situation where I got a job working in the Carter campaign and worked in the Carter White House.
00:04:02 [Speaker Changed] I’m fascinated as, as a recovering attorney, as people who have done these successful career transitions, what led you in 1987 to say, Hey, you know, there are some opportunities in private equity, let’s explore that.
00:04:17 [Speaker Changed] Well, in 1987, the phrase private equity had not yet even been invented. It was then called buyouts. I was thrown out of the White House when we lost to Ronald Reagan. So I had to go find another job. The only job I knew how to do was practice law. I’d practiced a couple years in New York. I wasn’t really good at it. I didn’t have a lot of experience at it, and I didn’t enjoy it. And if you don’t enjoy what you’re doing, you’re never gonna be great at it. Nobody’s ever won a Nobel Prize hating what they do. And so I realized that my clients weren’t really dying to see me continue practicing law. My law partners didn’t think I was gonna be Benjamin Cardozo or Louis Brandeis. So I decided to start the first buyout firm in Washington with no experience, no money, and no credibility. And ultimately I got lucky. And it, it turned out to be a very large firm.
00:05:03 [Speaker Changed] Huh. So, so there’s this little bit of an urban myth that at age 37 you read a book on entrepreneurship that states, hey, once you’re older than 37, the odds of starting a new firm drop precipitously. I, is there truth to that?
00:05:16 [Speaker Changed] Sometimes urban myths are accurate. In that case, I read a book that said that if you are gonna be an entrepreneur, you typically start your entrepreneurial venture between the ages of 28 and 37. And if you after 37, you haven’t done it, the chance of doing so is very, very small. And I read that when I was 37 and I thought, okay, if I’m gonna get outta the practice law, I better do it now before I have more family obligations or other kinds of personal obligations. So
00:05:42 [Speaker Changed] You’ve been in DC for the previous couple of years working in the Carter administration. How did you figure out how to piece together, Hey, I know a lot of people in this town and a lot of buyouts are tied to what’s going on with the government. What was the aha moment there?
00:05:58 [Speaker Changed] Well, whenever you’re trying to start a business, you try to say, here’s my special area of expertise, or here’s what I can do that maybe nobody else has done. And so my idea was to say we understand companies heavily affected by the federal government may be better than the guys in New York. Those would be companies like aerospace, defense, telecommunications, healthcare, all of which are heavily regulated by the federal government. So I thought that that would be something that would enable me to, you know, get some people to gimme some money to invest. And we did raise money deal by deal initially then later a fund. And I recruited people who actually knew more than I did for sure, about investing. So that was a big plus.
00:06:33 [Speaker Changed] So I’m glad you brought up recruiting for, for two reasons. First, a lot of CEOs say it’s the hardest part of their job is, is attracting high quality talent. But you managed to recruit some very talented investors with outstanding track records early on. Was it, tell us what, what enabled you to do that? Was it the novelty of what you were doing? Was it just something different? How did you bring in the top-notch talent that you did?
00:07:02 [Speaker Changed] Well, initially I was hiring people that had investment experience who were living in Washington because it was easier to get people to stay in Washington that moved to New York. And so I did get people who had been CFOs or treasurers or the equivalent at companies based in the Washington area. Later I went out and recruited big names who had been in government, people like former Secretary of State, Jim Bakker, former Secretary of Defense, Frank Carlucci. And that gave us a certain allure because people were wondering what are they doing in an investment firm? But in the end, it worked out quite well
00:07:32 [Speaker Changed] Early on, you focus on quote returns rather than fees, which really helped not only contribute to the firm’s success, but its image of trying to take care of of clients. Tell us a little bit about the philosophy there.
00:07:48 [Speaker Changed] Most private equity firms of any consequence were built in New York by people who had been investment bankers. And while investment banking is a great profession, you tend to recognize when you’re in investment banking that you need to make sure you collect a fee. We didn’t really have that kind of background. None of our people had been in investment banking. So we were investing our own money alongside our investors. And we were not, let’s say, very fee obsessed. And so we didn’t focus on the fees so much as we focused on the returns. And that was a plus because our returns turned out to be pretty good.
00:08:20 [Speaker Changed] So you’re coming up on half a trillion dollars, which is not an insubstantial amount of money. When you look back from 87 till today. Any particular milestones or markers that stand out on, on the path? What, what’s the secret of Carlisle’s success?
00:08:38 [Speaker Changed] Well, we’ve made many mistakes and I could have a show about 24 hours long about all the mistakes that I’ve made. But what enabled us to move forward, aside from a very good track record, was the business concept that at the time people made fun of. But in the end worked out. And the idea was this, historically private equity firms or venture capital firms only did one thing. They did private equity or they did venture capital, or they did growth capital, whatever it might be. I decided I would do many different things in the, under the Carlisle rubric. So we’d have a buyout fund if we did well in it. I’d say to people, well, give us a chance to do something in venture capital. If you’ll like us, then buy out, maybe you’ll like us in venture capital and so forth. And then I decided once we had multiple funds that we would globalize it. So I spent a long time going to Europe, Asia, Africa, Latin America, Japan, middle East, setting up funds all over the world. So we became a multi-disciplined firm and also a global firm. And that was relatively novel at the time.
00:09:34 [Speaker Changed] You said there was a decent amount of pushback to that. I’m kind of surprised how often I hear that when Vanguard launched, there was pushback to them there. There was a a lot of skepticism about BlackRock when they went to do what they did over and over some of the most successful companies in the world. People looked as SC at it early on. What does it do to your psyche when you are founding and running a firm when the traditional form of finance gives you kind of a hard time?
00:10:06 [Speaker Changed] If anything is easy, it probably is not worth doing. Anything that’s very hard is probably gonna be hard because many people say it can’t be done. But the best ideas in in time and best companies start from, from people who say, I’m gonna try something that hadn’t been done before. Who thought that you could sell books over the internet? Jeff Bezos did. Who thought you could have something like Facebook? Well, mark Zuckerberg did. Who thought software would be so important? Well, bill Gates did, but people didn’t give them money in times. And many people thought that they weren’t gonna be successful. So anybody that’s built the company really has people saying it’s not gonna be possible. For example, the company that we are now talking about, Bloomberg, Mike Bloomberg, when he lefts brothers, he was starting a technology company. People didn’t think it would ever get anywhere and obviously now become the biggest in the world at what it does.
00:10:54 [Speaker Changed] So I guess there it’s consistent because they’re at different points in your career. Early on, the standard forms of conventional wisdom look as scans at what Carlisle does. Later on in your career. You start this side project of publishing a series of books based on interviews with various leaders. You speak to historians, you speak to people who focus on business leaders on other sorts of leaders. I’m kind of intrigued by how you went from, hey, you know, the conventional wisdom says what we’re doing is wrong. To let me find the most interesting visionaries, builders, commanders, and decision makers and see what wisdom I could pull out from the people who have been really successful. Tell us how years at Top Carlisle led you to this really fascinating series of books. We’ll get into the new book in a in a little bit, but I’m intrigued by the arc of publishing that you’ve created.
00:11:55 [Speaker Changed] Well, when I was a little boy, people would come over our house for dinner and I would ask ’em lots of questions and my mother said, don’t be such a Yenta, Yenta being a Yiddish word for asking other people about their business in effect. And so I was always inquisitive and intellectually curious. And what happened was I became the head of the Economic Club of Washington where I was supposed to get people to come in and give speeches and the speeches that were being given by business people were boring. And I could see members were watching at their watches when they could get out of there. So I decided I would try interviewing and maybe make it a little bit more interesting. And it turned out that people liked to interviews. I used some humor. I, I really spent a lot of time researching the people I was interviewing. And eventually Bloomberg saw it and Bloomberg said, let’s make a TV show out of it. And so I began doing some interviews that way. I also started a program at the Library of Congress where I interview great historians in front of only members of Congress once a month doing it for 10 years. Oh really?
00:12:47 [Speaker Changed] Wow. That’s fascinating.
00:12:49 [Speaker Changed] And the theory was, let’s get members of Congress to come and sit with each other from different parties in different houses, which they rarely get a chance to do. No press. Nobody can see ’em talking to somebody who’s a different member of a different party. And that’s been going over 10 years. And I took some of the interviews from that, some of the Bloomberg interviews I’ve done. I’ve also had a program at the New York Historical Society to interview great historians there and have taken these interviews and and ultimately put some books together from them. This particular book is one that is a compilation of interviews I’ve done about presidents asking great presidential scholars about particular people they’ve written about. And I also had some interviews from of presidents themselves in the book. So
00:13:24 [Speaker Changed] Let’s go back to what you did with members of Congress, interviewing historians. You know, we live in a kind of cynical era. What was the impact of getting people from both parties to sit and listen to a scholar who could give them deep historical perspectives on various topics? How was it received? Did it move the needle in terms of comedy or any form of allowing people to work together?
00:13:50 [Speaker Changed] As you know today, there are very few people you can criticize without being criticized yourself. You can criticize lawyers and you can make jokes about lawyers and you get away with it. You can make jokes about members of Congress and always get away with it. ’cause members of Congress aren’t as highly respected as maybe they should be. So members of Congress actually are pretty hardworking. They’re very poorly paid and they have incredible workload. But occasionally they like to come together and actually talk with each other in ways that they don’t get criticized for talking to somebody from the opposite party. So I thought if I had a dinner at a neutral site, the Library of Congress and members of Congress can come there through underground tunnels so they don’t have to go drive to it. And I would have a nice dinner and a really good speaker or interviewee.
00:14:30 So Doris Kearns Goodwin or the late David McCullough, people like that. Most recently I had Ken Burns. People want to hear from them. And so I’ll do an interview, then members of Congress will ask questions and they’ll do an in effect, an interview as well. And then what I found is that members of Congress don’t really talk to people from the opposite party very much anymore because of the ethos in Washington. Also, they don’t know people from the opposite house. There used to be conference committees to work out differences between the House and the Senate, but there’s not much legislation anymore. So there’s not a lot of conference committees. And there used to be ELLs, which is members of Congress going overseas. And that got heavily criticized. That doesn’t happen very much. So I’ve been surprised at how many members of Congress don’t know people from the opposite party of the opposite house. This gives them a chance to come together in a setting that no press person can see. There’s nothing secretive about it in the sense that it’s doing anything wrong, but there’s no press there. They don’t have to worry about somebody saying, you were talking to somebody from the opposite party. Why were you doing that? And so members like it. It’s been going on for 10 years now. We get people who are leaders coming from the both houses and, and you know, rank and file members.
00:15:31 [Speaker Changed] So, so I’m hearing that the, whoever the particular historian is to borrow a phrase from Alfred Hitchcock, the McGuffin, what really the goal is, is to get a little mixing going on between congressmen and senators, Republicans and Democrats. The
00:15:45 [Speaker Changed] Theory is that if you get people talking to each other and they’re not yelling at each other all the time, it’d be made better for the country. And so I don’t wanna make it sound like I’m solving all the country’s problems. I’m obviously not. But I do think it has some benefit in getting some members of Congress to, to understand the other side better. And members of Congress tell me, I’m, this is maybe sad, this is one of the most interesting things they’re doing at Congress, is coming to these dinners. Now obviously there’re there’s hyper hyperbole there, but clearly they enjoy it. And we get, you know, about 200, 250 members of Congress coming every time we have a dinner.
00:16:17 [Speaker Changed] Wow. That, that’s, so you’re, you’re moving the needle however, mu incrementally it is. But you know, it’s better than these folks not talking to each other.
00:16:24 [Speaker Changed] It’s better than food fights. And remember, and during the Civil War, we had over 60 times during the Civil War, members of Congress would get into fights with other members of Congress on the floor of the house or the Senate 60 times. Fist fights, fist fights. Their most famous one was one, one member of the house took a cane and bashed the head of, of a senator he didn’t like. And took a long time for that senator to recover. But that we’re not doing that. Now,
00:16:50 [Speaker Changed] Fortunately, although sometimes it feels like it, we’re coming pretty close,
00:16:55 [Speaker Changed] There’s a lot of division in the Congress. But the division that Congress really reflects the, reflects the division in the country. Members of Congress really reflect our constituents. And as you know, we now have blue states and red states. In 1960, for example, Richard Nixon campaigned in all 50 states because he didn’t really know who would win the particular states that weren’t read in blue states necessarily. Today, most people running for president are gonna campaign in about seven states. ’cause those are the only states we don’t know for certain how they’re gonna happen or what they’re gonna do. So for example, if you became a candidate for president of the United States tomorrow and you’re the democratic candidate, you’re gonna win New York or California. It doesn’t make a difference what you say or what you do. And if by contrast you became a Republican, you’re Republican nominee, you’re gonna win Texas or Mississippi or Alabama. So most of those states are not relevant for the presidential election ’cause we know how they’re gonna go. So we’re now really focused on seven states. The so-called Five Swing States and maybe two more swing states that now might be swing states. And it’s an interesting phenomenon that you can have people in just a few states really decide the presidential election.
00:17:56 [Speaker Changed] You’ve been in DC most of your life, you’re an astute observer of both business and politics. What should we credit this, this, this huge, we’re no longer purple, we’re blue and red. Some people point to Citizens United, some people talk to how toxic social media, I’m assuming it’s much more complex than either of those answers, but, but what’s your perspective?
00:18:21 [Speaker Changed] Well, it’s a very complicated subject, but I think a lot of people who are not happy with what goes on in Washington feel that the country has moved away from them and that the country is much different than the country they thought it was gonna be when they were in the grade school. Remember in 1960 when John Kennedy ran for president, the country was 90% white, 8% black, 2% Hispanic. That was basically it. Today we’re a much more diverse country, obviously. And I think the diversity has upset some people rightly or wrongly. And therefore I think some people feel that the country has gone away from them, that the globalization of the economy has taken jobs away from them. That a lot of them feel they’re not getting the, the benefits of America, for example, only 40% of American adults are college educated. That means 60% are not. So if you are not college educated, your job has been lost on sho offshore company, you’re gonna be very disappointed. And many of those people are disappointed in looking for people who are maybe more xenophobic than, than, than, than maybe we should be the case. So I do think it’s the case that you have many people now in the country who are very disaffected from the country’s image that they grew up with.
00:19:30 [Speaker Changed] I saw something a couple of years ago about the impact of gerrymandering that has shifted our elections to the primary. If you’re in a safe district for either a Democrat or Republican, it’s the primary that matters, not the general. And when the primary matters, you tend to get Republicans who are more right, rightist and Democrats who are more leftists. Any truth to that?
00:19:53 [Speaker Changed] Yes, that’s a very good point. For example, it’s something like 95 to 96% of people who run for reelection in Congress get elected. Now it’s in part because if you win the primary, you’re probably gonna win because your district has been probably gerrymandered or, or it’s probably a very Republican or very democratic district. So why do you, how do you win 95% of the time? Well, whoever has the most money usually wins. Not always, but usually. So what do you do is you spend a lot of your time raising money. So about 40% of the time members in the house is raising money. It’s because whoever has the most money will probably win. And therefore there’s a lot of emphasis on raising money. And you don’t raise money typically by saying, I want to go to Washington and be right down the middle. I want be a person who decides what’s right or depending on the facts as I look at ’em, they tend to tend to say, I’m gonna be very far to the right or very far to the left. And that’s what enables people to raise money. If you went to Congress and you were a member of Congress and you said to your constituents, I want to go and assess each matter on a deal by deal basis and I wanna be right down the middle, what is really the best compromise? You probably won’t raise a lot of money.
00:21:02 [Speaker Changed] Right? And, and that’s how we end up with a deeply polarized congress that arguably is much more polarized than the nation at large.
00:21:10 [Speaker Changed] Well typically you’re seeing some people on the far right and maybe on the far left as well. They are making speeches on the floor of the house at the very moment that their campaign operation is saying, see what our member is saying on the floor of the house. Give us money now. Give us $5, $10, $15. And the fundraising that comes in from small donations is quite large.
00:21:30 [Speaker Changed] Hmm. Really, really quite fascinating. So you’ve written a number of really interesting books based on conversations with various leaders, the highest calling. What was the motivation for this book on not just presidents, but policy and politics?
00:21:46 [Speaker Changed] Well, lemme talk about the, the presidency for a moment. The title is the Highest Calling. Historically, I’ve said the highest calling of mankind is private equity, obviously tongue in cheek. It gets a laugh from people because they recognize that private equity is probably not the highest calling of mankind,
00:22:03 [Speaker Changed] Probably not.
00:22:04 [Speaker Changed] But the highest calling really reflects maybe the most important job in Western world, which is the presidency of the United States. When George Washington was elected president, he wasn’t the most important person in the world. Probably the president of the United States did not become the most important person in the world until Woodrow Wilson went to Paris in right after World War I, or at the end of World War I, to negotiate the treaty that would end World War I. And as he went there, he was descended upon by hundreds of thousand people thanking him for winning the war. And then after Wilson presidency became less significant as we had some presidents who weren’t so well known or so historic, Harding or Coolidge. But then when FDR became president, he took over in effect the western world and became the most important person in the western world. And ever since that time, the president of the United States has been the most important person, I think, in the western world, certainly if not the world.
00:22:59 And so I, what I try to do in the book is interview great scholars about great presidents, what made them important, what made them well do well or do poorly. And then talk about from presidents directly that I’ve interviewed, and I have a number of interviews in there with presidents of the United States that I did the, the interviews myself. So what I’m trying to do with the book is simply this, say to people, learn your presidents. Learn your presidential candidates and vote in this country about two thirds of the people vote for president. That means about 80 million people who are eligible to vote don’t vote. 80 million people in the year 2000, only 539 votes made a difference about who was elected president of the United States. That was the, the votes in Florida. So I want everybody to think about this, maybe read the book, think about the why the president’s so important and go out and vote. That’s what I’m trying to do with the book.
00:23:46 [Speaker Changed] So you describe the presidency as the most important, at least in the modern era as the most important job in the world. Is it safe to say this is the single most difficult job in the world?
00:23:59 [Speaker Changed] Well, other than the job of doing interviewing, as you and I are doing,
00:24:04 [Speaker Changed] I’m gonna let you in a little secret. I think you and I have the best gigs in all of finance. I you find this difficult. I don’t
00:24:10 [Speaker Changed] No, it’s fine. I’m just being facetious. I would say the presidency is often said to be the hardest job in the world. And so it, it does have enormous amount of difficulties to it because everything you do affects everybody in the world. If a president makes a decision, it’s gonna affect people all over the world almost all the time. So it’s a tough decision. If you talk about people who become president, they age, they age a lot. When you look at somebody who’s been in there for four years or eight years, you see what they look like at the end. And what they look at in the beginning, you kind of realize how it can really age you. And the reason is the toughest decisions get resolved only by the president. If it’s not that tough, it’ll get resolved at a lower level. When it comes to a president making the final decision, it’s usually at the very difficult decision.
00:24:54 [Speaker Changed] So you do a poll in the book on the best and worst presidents in history. What motivated that poll and and and what surprised you in those results?
00:25:05 [Speaker Changed] I had a poll commissioned to just figure out who people thought were the best presidents, who were the worst presidents, what are the qualities you want? And not surprisingly, the poll shed that Abraham Lincoln was probably the best president George Washington and maybe the second best. But in some respects, more modern presidents have very high ratings as well. President Kennedy is extremely highly regarded today, even though interestingly only 70% of Americans is hard for you and I to believe we were alive when President Kennedy was alive, only 70% of Americans, well, only 30% of Americans were alive when President Kennedy was alive. So 70% of Americans don’t know anything about him because they were very little about him. ’cause they weren’t alive when he was president. I’m the chairman of the Kennedy Center in Washington and we built an exhibition recently to show people of who President Ken Kennedy was and what he is that he is done.
00:25:52 What I think overall, what I’m trying to do in the book is say to people, have a civic responsibility and learn your president’s. Can presidential candidates be informed, learn about their personalities, their characteristics, their programs, and then make a decision to vote. In this country, we have the, pretty much the lowest we percentage of people in Western democracies who are actually voting. So in some countries maybe they get financial incentives to vote, but you get 90%, 95% of the people or more voting in a major election. Here we get maybe two thirds in a presidential election, in non presidential election years. We sometimes can get mayors elected in let’s say New York City or someplace else, which 20% of the vote.
00:26:30 [Speaker Changed] You know, it, it’s kind of fascinating. I I always wondered, is that a function of a dysfunctional democracy or is it a function of an economy that’s so robust that people almost don’t care? Hey, we’re so wealthy as a nation, whoever’s president is almost irrelevant. There
00:26:48 [Speaker Changed] Are many different reasons why people don’t vote. Some people have a theory that people are generally happy with, where the situation is is and they think the outcome is likely predictable. And so why would they make a a difference by voting? Some people can’t really vote easily because you have to wait in lines if you don’t vote early. And sometimes people don’t have the ability to wait in lines. Sometimes people don’t know much about voting in advance or doing the ability to get a ballot in advance. There are many different reasons, but I, I think it’s unfortunate that people don’t vote. And I, I really encourage people to vote and whatever your decision is, vote and just it, it make the democracy stronger. If you have 95% of the people voting who are eligible to vote, more likely than not that government is gonna have be empowered to really do much more than would do if only, you know, 60% voted.
00:27:32 [Speaker Changed] You know, you look in Europe and, and many other democracies, election day is a national holiday. The stock market’s closed, the banks are closed, people, schools are closed. It encourages people to go out and vote. Is that something we should be thinking about here?
00:27:46 [Speaker Changed] We should look at things like that. For example, people have suggested we allow people to vote on Sundays or basically make election day Sunday. Now for religious reasons, people don’t like that in some cases, but having it as a national holiday wouldn’t be a big idea. Now with advanced voting or early voting, we’ve mitigated that problem to some extent. But making it a national holiday, we have a lot of national holidays adding one more probably wouldn’t be the worst thing in the world.
00:28:08 [Speaker Changed] So let, let’s get back to the highest calling to the book. One of the things that really struck me were the last two chapters on Trump and on Biden. Those two chapters felt very different to me than the rest of the book. And I don’t know if it was the conversation or just because it’s so present and current and fresh, but they, they felt qualitatively different to me. It’s also, as you’re reading it, the things that are being discussed are just so fresh and vivid in my recollection. But I found those two chapters to be really intriguing. Both journalists you interviewed and both subject matters really fascinating.
00:28:50 [Speaker Changed] Well, Maggie Hayburn was the New York Times reporter who covered President Trump when he was at the White House. She also covered him before he became president. Like many books about the Trump administration, her book called A Confidence Man was not probably that favorable Franklin for is a journalist at The Atlantic. And he took the first two years of the Biden administration and wrote about it. And it was one of the best books that had been written so far about the Biden administration. So while I do have an interview with President Biden in the book, and I do know him reasonably well, I thought having a journalist perspective would add something to the book. And Franklin Ford did a, a really good job in the first two years of the Biden administration. Obviously didn’t cover the last two years of it, but that the, the books about presidents probably are best read 20 or 30 years after the, or written, but probably best 20 or 30 years after the president served.
00:29:39 Because you really get more, more data then you have more information. But I think for a book that’s really relatively contemporaneous with the president, Franklin Ford did a very good job describing Biden. It’s just, you have to bring your own perspectives to it. But I try to be as balanced as I can. And as I point out in the book, while I did work in the Carter White House, I do not give money to politicians. I make no political contributions. I don’t abdicate any candidate at any given time. So I’m as apolitical as probably you can realistically be. I also have, you know, because I chair the Kennedy Center and Chair, the Smithsonian chair of the Library of Congress board, I felt that I should be best to, to be apolitical. So
00:30:17 [Speaker Changed] You interview Biden, you interview Trump, you interview George W. Bush, you interview Bill Clinton. Both journalists you interviewed, they seem very forthcoming. It doesn’t feel like they’re hedging their words or being guarded. Some parts of the conversations with presidents, it seems like they are very intimately aware that everything they say impacts their legacy.
00:30:46 [Speaker Changed] Sure. Journalists, their job is to penetrate the information that is available and kind of give it the perspective they have and and write as fully as they can about it. Presidents are more guarded, all politicians are more guarded. Some presidents don’t have filters, but generally presidents have filters and they say things that you know, they’re gonna probably appeal to their constituents. There was a movie where Warren Beatty played a can candidate named Bullfinch, I think it was. Oh sure. And basically that candidate had no filter and was saying things you shouldn’t say. You rarely get candidates getting to be the president of the United States without some filter. Obviously some candidates in recent years have been thought to be having not enough of a filter, but generally they have some kind of filter. Journalists don’t have a filter as much because they’re not basically trying to run for election and get votes.
00:31:34 [Speaker Changed] Do. Do you find when you’re talking to a president and you’re past the 30 or 40 minute mark, their guard drops a little bit, you can get a little more to the, the core without that facade or media training show getting in the way?
00:31:50 [Speaker Changed] Well, they’re pretty experienced. If you interview Bill Clinton or George W. Bush, and I’ve done that several times, they’re very experienced and they’re not likely to say some things that are gonna be get them in trouble, I wouldn’t think, because at this point they’re so experienced and so used to doing interviews. But sometimes people say things off the record that you don’t publish, but that you do get a better sense of them in that way. But off the record is something that people don’t do as much anymore because nobody thinks anything’s really off the record anymore.
00:32:18 [Speaker Changed] My my sense of George W. Bush is that he wasn’t, I obviously Trump is the ultimate unfiltered president, but I never really got the sense that despite growing up in a, in a political family, his father was first head of the CIA and then vice president and then president. He doesn’t strike me as someone who was especially filtered. He doesn’t reveal what he doesn’t wanna reveal, but it seems like there are broad areas he’s very comfortable talking about. What was your experience like interviewing Bush?
00:32:49 [Speaker Changed] I’ve known the Bush family for quite some time. George Herbert Walker Bush joined my firm as an advisor after he left the presidency. So I got to know him and I got to know his son reasonably well. George Herbert Walker Bush and George W. Bush are really very different personalities. George Herbert Walker Bush grew up really in Connecticut. George W. Bush grew up in Texas. George W. Bush, I think reflects his mother’s personality more than his father’s. And his mother was very, had a sharp tongue and she was fairly critical of certain things and she would tell you what she would say thought without a filter. And George w reflected that to some extent as well. As he became more experienced in politics, I think he had a little bit more of a filter, but still he’s willing to make fun of other people. He’s willing to use humor in a way that I think is advantageous for him. And so I think the interview in the book is, yeah, it does reflect his personality.
00:33:38 [Speaker Changed] So you had the interview with Peter Baker about Obama. I would’ve loved to see your interview with Obama. How come that didn’t come about?
00:33:47 [Speaker Changed] I did interview President Obama at a Carlisle event years ago, but it was not recorded and it was right after he left the presidency. And just for space and other reasons, I couldn’t get every, everybody in there and his scheduling problems and so forth. But I think that the Peter Baker book on Obama does reflect pretty well what Obama did as president and,
00:34:10 [Speaker Changed] And he’s another one that he seems very structured and controlled, but occasionally will tell you what he really thinks.
00:34:19 [Speaker Changed] Yes, president Obama is an extremely smart person, very intelligent president of the Harvard Law Review. And early on he decided to get into politics and not really become a lawyer or a law professor, which he had the opportunity to do. I got to know him reasonably well when he was president of the United States. Very cerebral person who would like to, would read a a hundred page memo and go through it quite well. He’s a very, very talented writer. Maybe the best writer who’s been president since Woodrow Wilson. Wow,
00:34:47 [Speaker Changed] Really interesting. So when, when you, the manuscript is locked, I don’t know if people are aware, you know, when a hardcover comes out, it’s months in advance. So in between the time this is locked and published, we had a pretty substantial shift in the political scene here. When you submitted this, you could take surveys of Republicans or Democrats, they were both unhappy with their presidential candidate. We’ve now had this massive change in the, in the paperback version that comes out in six months. What’s the addendum you’re gonna do about the 2024 election?
00:35:24 [Speaker Changed] Well, when this went to the printer, it was really in June. And at that point, Biden and Trump were likely to be the nominees as it was getting ready to be printed. All of a sudden President Biden said, I’m not gonna be the the nominee. And, and as we now know, Mr. Vice President Harris is the nominee. So I did write an addendum to the book on the very back that does say, look what happened in just the three weeks that after I submitted the ma manuscript until today, which is that you have a new person running for the Democratic presidency. You have President Trump was shot at. And then things like that have changed a great deal. So I did try to reflect that, but there’s no doubt that when you’re writing a book about the presidential situation and you’re having the middle of a presidential election, things can change. And so even having the last week or so things have changed from what we knew. I didn’t have a chance to put the Tim Walls selection in their book either.
00:36:19 [Speaker Changed] So the book runs from George Washington to Biden. Let’s talk a little bit about how the important roles of the president as both leader of the country and leader of their party has changed o over that two and a half century era. How has the role of the president of the United States evolved in in modern times?
00:36:43 [Speaker Changed] Okay, so initially when the president was the President, George Washington, it was not a global figure really. And the United States was not a global country. Today, the United States president is the most important person in the, in the western world for sure. He plays or she will play if she gets elected. A role where you are not only the head of the government, but the most important person in the political arena. You’re also a global inter figure who are making decisions about war and peace from time to time. So it’s an incredibly important job. It’s hard to think that any one human can do it perfectly and nobody really has done it perfectly. But it’s a role that very few people would say that there’s an equivalent anywhere else in the world. You’ve
00:37:26 [Speaker Changed] Written that as a 12-year-old boy, you were deeply inspired by President Kennedy’s inaugural address, particularly his call to public service. Tell us about that.
00:37:38 [Speaker Changed] Yes, I was young and I, my sixth grade teacher went over that speech with us the day after it was given. And I recognized what he was saying is that people should give back to the country. I was not from a wealthy family, I didn’t know what I wanted to do at 12 years old, but I thought serving in the government in some way would be a thing that would be a worthy goal. And so I ultimately did try to do that by working in the White House for President Carter. So that led to other things and that led to the company that I created Carlisle after we left the government. And then that became successful and I decided to devote a large part of my life now to philanthropy.
00:38:14 [Speaker Changed] So. So let’s talk a little bit about some of the things you do. ’cause it’s really a fascinating arc of things. First, you’re one of the original signers of the Giving Pledge. Tell us a little bit about that.
00:38:24 [Speaker Changed] Bill Gates, Melinda Gates and Warren Buffett conceived of a pledge, it’s informal, it’s not binding in some ways, but it’s basically an informal pledge that you would give, agree to give half of your net worth away during your lifetime or upon your death. And there were 40 of us who signed it initially. Now there are probably more than 200 have signed it, mostly from the United States, but there are some from, certainly from around the rest of the world. And it’s a commitment that I’ve tried to honor, I have given away a fair amount of money in my lifetime to things that interestingly get some more, get more attention than others. So a large part of what I’ve done is medical research and universities and scholarships. The thing that has caught the most attention is what I’ve called patriotic philanthropy, which is to say, giving money to remind people the history and heritage of our country. So fixing the Washington Monument, fixing the Lincoln Memorial, fixing the Jefferson Memorial, fixing Mount Vernon, things like that. Monticello Montpelier, I’ve been willing to kind of put up the money to help get these things restored on the theory that if they’re restored, people will visit them, and if they visit them, more likely they’ll learn more about presidents, more about our history and heritage. And I’ve done the same in trying to buy historic documents like the Magna Carta Declaration of Independence. Preserve them, have people see them, hopefully learn more about our country’s history.
00:39:38 [Speaker Changed] So it’s a fascinating phrase, patriotic philanthropy. How did you find your way into that space? It didn’t seem, I remember when there was a problem with the Washington Monument and there was a call to raise capital to kinda repair it. It didn’t seem that like very many people are spending time efforts and money repairing the great monuments of the United States.
00:40:02 [Speaker Changed] Well, many people think that the federal government has the responsibility to put up the money for that. So when I called the head of the Park Service and said, how long is it gonna take to fix it and where are you gonna get the money? He said, it’s gonna take a while getting the money from Congress. I said, forget that I’ll put up the money. And I was, wait,
00:40:18 [Speaker Changed] Wait a second, I gotta stop you right there. Which monument are we talking about? The
00:40:22 [Speaker Changed] Washington Monument. And
00:40:23 [Speaker Changed] That was not an insubstantial job. That was tens of millions, hundreds of millions of
00:40:28 [Speaker Changed] Dollars. No, it wasn’t that significant. What happened was the Washington Monument, which was opened around 1888 or so, they had earthquake damage in 2011. And so the, the head of the Park Service said he didn’t know exactly what it would cost. I said, well, tell me what it would cost and I’ll put up the money. And he ultimately said that maybe Congress would put up some of that money. But he was worried initially that Congress wouldn’t move quickly enough, give him the money when he needed it. So I decided to, to move quickly to do it. I’ve been surprised at how many people think about that because it was not the largest gift I’ve ever given right by far. But it, it was a symbol that Washington Monument was a symbol of our country and that a private citizen would put up the money for it kind of struck people as strange, why wouldn’t you let the federal government do it?
00:41:07 And I, I’ve tried to do many things that the federal government could eventually do, but maybe they, they can’t move quickly enough or they don’t have the resources to do it in some cases or they can’t allocate the resources. I’ve tried to buy historic documents for the same kind of reason. The federal government doesn’t buy historic documents typically. But I think by preserving them, we give people a chance to see these documents and have them think much more about our history and heritage. And the reason that’s important is Jefferson said that to have a representative democracy work, you need to have an informed citizenry. And very often we don’t have as informed a citizenry as we should have. We don’t teach civics in high school or junior high school as much as we used to. Americans don’t pass civics tests very well at all. And as a result, we don’t have people that actually know as much as I think they should know about our country. Its history and its heritage.
00:41:55 [Speaker Changed] So, so you buy a lot of these documents, how are they visible to the, to the public?
00:42:00 [Speaker Changed] All my documents are on display. I put ’em on the Smithsonian or the National Archives or the Library of Congress or equivalent organization, national Constitution Center so people can see them. And there’ll be obviously a curator to describe it more in detail. And the theory is that while if you could look at what’s, what’s in the decoration independence on a computer slide, you don’t need to go see the original, but the human brain still works in a certain way. If you know you’re gonna see an original, you’re probably gonna read about it before you go there. When you go there, you’re gonna have a curator tell you about it and afterwards you’ll probably read more about it. So the human brain still gets much more out of seeing an original, in my view, original building or an original document than just seeing something on a computer slide.
00:42:38 [Speaker Changed] So the documents that you have purchased and made available to the public, the Declaration of Independence, an original copy of the Constitution did, did you say Magna Carta?
00:42:48 [Speaker Changed] Yes, I bought the only copy in private hands of the Magna Carta and I put it on permanent loan to the National Archives. And,
00:42:55 [Speaker Changed] And besides those three, which are not insubstantial, any others worth mentioning?
00:43:00 [Speaker Changed] Well, the Bill of Rights, I recently bought a rare copy of the Bill of Rights and put that on display at the National Archives as well. I have the first printings of the Declaration of Independence, the first printings of the Constitution that were printed actually in newspapers at the time, and a lot of other historic documents like that. The 13th Amendment is also one that I have, which is the, the amendment that abolished slavery. Huh.
00:43:21 [Speaker Changed] Really, really quite fascinating. Let’s talk about boards. You sit on a number of boards. You’re chairman of the John F. Kennedy Center for the Performing Arts, the Council on Foreign Relations, the National Gallery of Art, the Economic Club of Washington, the University of Chicago. That’s a pretty busy schedule. What are you doing with these various boards in terms of helping them raise money and helping them do programming?
00:43:46 [Speaker Changed] Well, non-profit boards are, are ones that are time consuming, like for- profit boards, but there’s no compensation. You do it because you really want to help the cause. I joined all these boards thinking I wanted to help in that, that particular cause or project. And I got elected chair in, in some cases of it to those boards. And I try as a chair to be a representative of the organization and to help them raise money. And obviously if you’re the chairman, you’re gonna be expected to give money as well. So I’ve been the chairman of the Kennedy Center for the last 14 years and I now the chairman of the National Gallery of Art as well. And the chairman of the Library of Congress board and the Library of Congress board reflects my interest in reading this weekend we’ll have the National Book Festival in Washington, and I’m the chair of that as well. And with the Carla Hayden, who’s the Librarian of Congress. And I just love reading and I love, you know, promoting books and that’s one of the reasons why I, I enjoy the Library of Congress.
00:44:37 [Speaker Changed] So we’ll talk a little bit about books in, in a few moments. I wanna stay focused on your reliance on scholarships to attend college and law school. And now as part of your, your philanthropy, you’re aiming to expand access and opportunity for young people from disadvantaged backgrounds to get a better education. Tell us about that.
00:44:58 [Speaker Changed] My father did not graduate from college or high school. He went into World War ii, came back, got a job in the post office, married my mother. They were very young. I was their only child. My father had a blue collar salary his whole life. And so to go to college, I needed a scholarship and I got the biggest scholarship from Duke University. I sure it was not a basketball scholarship though. And, and then I got a, a scholarship to go to University of Chicago Law School. So I’ve tried to help those universities by being board chair. I’ve been the board, I was the board chair of Duke University for a long time, and then now I’m, now I’m chair of the University of Chicago. I, I’ve given a fair amount of money to those universities for scholarships for people who didn’t have the chance to get there if they didn’t have a scholarship. And I, I’ve, I’ve something I’m very interested in doing because I think scholarship money is the best money you can give to see some progress in the, in the near term. Very often when you make a philanthropic gift, it may be decades before you see the progress, but with scholarships, you know, you’re giving somebody money to go to school who otherwise wouldn’t go to that school or probably couldn’t attend that school.
00:46:02 [Speaker Changed] Huh. So let me, let me change gears on you in the last few minutes. We have, you grew up, how, how far from Baltimore where you were, I
00:46:10 [Speaker Changed] Was in Baltimore. You,
00:46:11 [Speaker Changed] You grew up in Baltimore, now you’re the principal owner of the Baltimore Orioles, which you purchased this year. Tell us what motivated you to buy the team and how it’s been going.
00:46:23 [Speaker Changed] I did play Little League Baseball, but I assure you I was not a superstar. And like all kids who play baseball, you always wanna play in the major leagues, but you realize by the time you get to 14 or 15 that that’s not gonna happen. I spent most of my career living in Washington post the, the White House years, and I’ve given a fair amount of my money and time to causes in the Washington area or national causes. But I felt that I hadn’t done enough for Baltimore, my hometown, which had given me a public school education where my parents were born and raised, where I was raised, where my parents are buried and where I’m no doubt will be buried as well. And I just thought if an opportunity came along to do more in Baltimore, I would try to take advantage of it.
00:47:00 And an opportunity came along to buy the Baltimore Orioles, which is very important to Baltimore. Baltimore has lost a lot of jobs in recent years, a lot, a lot of businesses in recent years. And as a result, Baltimore doesn’t have as many things to brag about as maybe New York City or Los Angeles. And therefore the Orioles, what, which have been there since 1954, are really essential to the ethos of the, of the city. And I just thought I wanted to help contribute in that way. And so I put a team together to buy the Orioles.
00:47:26 [Speaker Changed] What surprised you most as an owner of a Major League baseball team?
00:47:31 [Speaker Changed] How dedicated the fans are. I’ve met fans who’ve had season tickets for 45 years, 50 years in some cases. And I’m just surprised how people regard baseball and the orals almost like a religion. And people know every statistic, they watch every game. People are much more dedicated than I actually knew. And I was surprised at how important Baltimore really regards the Orioles as, as central to its, its its fabric. And so that’s been one of the most important things I’ve learned.
00:47:58 [Speaker Changed] So, so let me give you an opportunity to push back on some nonsense. I read when it was first announced, oh no, a private equity guy is buying the Orioles ticket, prices are gonna go up, hotdog prices are gonna go up, this is gonna be a disaster.
00:48:11 [Speaker Changed] Well, there are private equity people before me who have bought sports teams and the results have been reasonably good. I think, you know, baseball is a complicated sport because it doesn’t have kind of the arrangements that the NFL has or the NBA has. And so it’s a much more challenging for small town teams to do as well as big town teams. But, you know, I, I don’t think that’s the biggest focus is increasing prices on, on food or something like that. Our focus is winning a championship and giving the best team we can on the, putting the best team we can on the field. And that’s what I’m really focused on and that’s what our energies are, are devoted to.
00:48:46 [Speaker Changed] And arguably you have the best stadium in all of major league sports. What makes Baltimore so special?
00:48:54 [Speaker Changed] In the 1950s and sixties and seventies, stadiums were being built around the country that are, were what I would call androgynous. They could be used for football, they could be used for baseball, and they were not really baseball centered the way, let’s say Wrigley Field or Fenway is. And as a result, baseball kind of went away from its roots and having very unique kind of designs in, in, in its stadiums. When the Camden Yards was open about 30 years ago, it returned baseball to its roots in building a stadium as built only for baseball and which has some unique characteristics and it’s now 30 years old. We’ll rehab it over the next three or four years with money that the state of Maryland is providing us. And so we wanted to make it one of the best experiences in all of baseball to come to a game like that experience what a great stadium is like, and actually, you know, enjoy the team on the field. It’s a historic stadium in many respects. It’s not old, but it’s 30 years ago when it was built. But it now is iconic. It’s iconic because many stadiums that are being built since the, the Camden Yards are built, are trying to pattern themselves after what Camden Yards is looking like. And so today, when baseball stadiums are built, they’re built to be like the old stadiums. They’re not built to be ready for football or some other sport.
00:50:09 [Speaker Changed] I grew up as a long suffering Mets fan and spent a lot of afternoons at Shea Stadium and when the new city field was rebuilt, Camden Yard seems to be the blueprint for that. Arguably city field is a better experience for a fan than the new Yankee Stadium.
00:50:29 [Speaker Changed] Well, I’ve been to the Yankee Stadium and I’ve been to City Field recently. In fact, the last two days we had games in there with the, with the Mets. And unfortunately as we talked today, we lost two of the three games to the Mets and I in, in kind of walk off home runs in the, in the last inning. But the stadium is very modern in many respects. It’s, it’s iconic in the fact that it does look like a baseball stadium, but has electronics and a scoreboard and other kinds of fan services that are really unique. So I think people should be proud in New York of that stadium. Yeah,
00:51:01 [Speaker Changed] They did a really nice job. All right. I only have you for a few minutes, so we’re gonna jump to our speed round. Let’s go through these as quickly as we can. Starting with, who are your mentors who helped shape your career?
00:51:16 [Speaker Changed] Well, I worked in the White House for a man named Stuart Eisenstadt. I dedicated the book to Ted Sorenson, who I mentioned earlier, and the Stuart Eisenstadt. He was my mentor who helped me work at the White House and been very helpful to me. And I would cite, cite him as a mentor.
00:51:31 [Speaker Changed] I know you’re a big reader, supposedly. You used to read four or five books a week when you were younger. What are some of your favorites and what are you reading right now?
00:51:39 [Speaker Changed] Well, right now I’ve just finished reading a book called G-Man, written by a professor at Yale. And the, the book won the Pulitzer Prize. It’s about j Edgar Hoover, a really good book. I just finished reading a book on Martin Luther King that also won the Pulitzer Prize by Jonathan eig. That’s a really, really good book. I’ve just finished reading a book about Winston Churchill by Eric Larson about Churchill’s first year in office. And I think that’s an excellent book as well. I like reading books that are non fiction books and typically books that are, you know, books about history. But I did read a book by a very famous author, James Patterson, recently on his new book on Tiger Woods. I’m gonna interview James Patterson soon. And he’s written enormous number of books, but this one on Tiger Woods is quite interesting and I enjoyed that as well.
00:52:24 [Speaker Changed] Huh. Really intriguing. You mentioned McCullough early. Did you ever read his book on the Wright Brothers?
00:52:29 [Speaker Changed] Of course. I interviewed him about that book, and I, I think it was a great book. I didn’t really know much about the Wright Brothers compared to what I should have known, and he didn’t know much either, and he dug into it and he actually, he, he did a great book.
00:52:41 [Speaker Changed] Yep. Really fascinating. All right, our final two questions. What advice would you give to a recent college grad interest in a career in either private equity, philanthropy, or investing?
00:52:53 [Speaker Changed] Learn how to read. Keep reading. You can’t read too many books. Learn how to write in a simple way. Learn how to communicate orally, experiment, try many different things. Don’t take the path of least resistance. Don’t get, make ethical mistakes because in the end, you could ruin your entire life. You only have your reputation to give to. You only have your reputation that to walk around with. And if you ruin your reputation, you’ll never be able to recover it.
00:53:19 [Speaker Changed] And our final question, what do you know about the world of private equity investing today? You wish you knew back in 1987 when you were first launching the firm?
00:53:28 [Speaker Changed] Well, I wish I knew how big and complicated it was. I didn’t, it wasn’t as big and complicated then. I wish I had known many different types of deals that I could have done that we didn’t do. I passed on some great deals. We had a chance to invest early on in, in a company like Amazon, and we passed up on that and we, we had stock in it, but we didn’t really hold it as long as we should have. So I’ve made a lot of mistakes, but on the whole, I, I’m reasonably satisfied with where, where my career now is. Well,
00:53:55 [Speaker Changed] This has been just tremendous. Thank you, David, for being so generous with your time. We have been speaking with David Rubenstein, founder of the Carlisle Group and author most recently of the highest calling Conversations on the American Presidency. If you enjoy this conversation, check out any of our previous 500 interviews we’ve had over the past. Is it 10 years? Wow. Over the past 10 years. You can find those at iTunes, Spotify, YouTube, wherever you find your favorite podcast. And be sure and check out my new podcast at the Money Short Form interviews with experts on specific topics, 10 to 12 minutes with various people talking about your money, earning it, spending it, and most importantly, investing it at the money wherever you find your favorite podcast. And in the Masters in Business podcast feed, I would be remiss if I did not thank the crack team that helps with these conversations together each week. My audio engineer is Meredith Frank. My producer is Anna Luke Sage Bauman is head of podcasts at Bloomberg Atika. Val Brown is our project manager. Sean Russo is my head of research. I am Barry Riol. You’ve been listening to Masters in Business on Bloomberg Radio.
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