Conversations with Tyler - David Rubenstein on Private Equity, Public Art, and Philanthropy

Episode Date: November 17, 2021

Baltimore native David Rubenstein is a founding figure in private equity, a prolific philanthropist, and author. From leveraged buyouts to his patriotic philanthropy to his leadership roles within institutions like the Smithsonian, Kennedy Center, and the National Gallery of Art, David has spent much of his life evaluating what makes institutions—and people—succeed. He joined Tyler to discuss what makes someone good at private equity, why 20 percent performance fees have withstood the test of time, why he passed on a young Mark Zuckerberg, why SPACs probably won't transform the IPO process, gambling on cryptocurrency, whether the Brooklyn Nets are overrated, what Wall Street and Washington get wrong about each other, why he wasn't a good lawyer, why the rise of China is the greatest threat to American prosperity, how he would invest in Baltimore, his advice to aging philanthropists, the four standards he uses to evaluate requests for money, why we still need art museums, the unusual habit he and Tyler share, why even now he wants more money, why he's not worried about an imbalance of ideologies on college campuses, how he prepares to interview someone, what appealed to him about owning the Magna Carta, the change he'd make to the US Constitution, why you shouldn't obsess about finding a mentor, and more. Read a full transcript enhanced with helpful links, or watch the full video. Recorded September 30th, 2021 Other ways to connect Follow us on Twitter and Instagram Follow Tyler on Twitter  Follow David on Twitter Email us: [e-mail] Subscribe at our newsletter page to have the latest Conversations with Tyler news sent straight to your inbox. 

Conversations with Tyler is produced by the Mercatus Center at George Mason University, bridging the gap between academic ideas and real-world problems. Learn more at Mercadis.org. And for more conversations, including videos, transcripts, and upcoming dates, visit Conversationswithtyler.com. Hello, everyone, and welcome back to Conversations with Tyler. I'm here today with David M. Rubinstein. David has a new book out, The American Experiment, Dialogues on a Dream,

but David, of course, has done so much more. He is a founding figure in private equity, and he is co-chairman and co-founder of the Carlisle Group. But also in philanthropy, David's ventures are almost too numerous to mention. He is chairman of the Kennedy Center, has been chairman of the Smithsonian, has contributed to the renovation of the Washington Monument, the Lincoln Memorial. The Breeding of Pandas, he purchased a copy of the Magna Carta for $21.3 million, then lent out to the United States government is from Baltimore, and that is but the beginning, David, has done much more. But let's start talking. Thank you for inviting me. Pleasure to be here. Now, in private equity, for those who do it well, the returns that accrue, they're being paid to what

scarce factor? What is the thing that's hard to have that's scarce that makes you good at private equity? Private equity is a business of adding value to a company. The theory of private equity, and I'm talking about buyouts as opposed to venture capital for the moment, in buyouts, you're taking a company isn't performing that well and you're adding better management or incenting the current employees to do better job. And then ultimately, after three to five years, you tend to sell the company and you typically make a return if you're good at somewhere 20 some percent per annum. And 21 percent or 20 percent or 25 percent per annum is a pretty good rate of return when you compare to other kinds of things you can do with your money. Venture capital is a little different.

You're making bets on entrepreneurs helping them, but probably not quite the same the way you would do in a buyout. But if that boosts the value of the company, what is is it the private equity firm has that the company doesn't? What's the differential capacity? Well, you have expertise. You have people that have been doing, let's say, buyouts for 10, 15, 20 years. They know what makes a buyout work. They know what doesn't make it work. For example, how to finance it, how to add value, how to make acquisitions, how to make certain that you sell things that are probably not really doing well, or you make acquisitions of things you think will help the company that you already own. So it's a mystery to some people outside the industry,

what private equity people do. And so private equity is, you know, private equity is. is one of these industries where you can make jokes about the people in it. You know, you can very rarely in this environment can you make jokes about almost anybody anymore without getting in trouble. You can make jokes about members of Congress. You can make jokes about lawyers and I and others make jokes about private equity people. But the truth is they do add value or they wouldn't be as well compensated as they are. Private equity's been growing for quite a while now, right? More so than most kinds of finance have been growing. And the fee structure of two and 20, I mean, where does the 20 come from? And why isn't the 20 to

declining more rapidly? Well, it is in some respects, and let me explain. First of the market, and you're a market economist, so people are getting two and 20, it's because that's what the market will say is appropriate. It's not as if people are being pushed and forced into paying people two and 20. Nobody's being forced to go into these funds. Where do the 20% come from? Well, I'll give you two examples of where many have come from. When Venetian ship owners would send their ships to Asia to get spices, the spices would be brought back in the ships, and those who brought them back, carried them back, had an interest in the profitability of the spices when they were sold back in Venice. They had a carried interest in effect, and that was roughly 20%. That may be where

it came from, but also when the first hedge fund was set up in the late 1940s, the person who set it up, I'm going to add value, I'm going to do more than just manage it. I want a percentage of profits. I won 20%. And when the first venture firms was set up in the 50s and 60s in the Silicon Valley, they also had professionals who said, I'm going to add value. I want 20% of the profits. And it's amazing that for all these 50, 60 years later, 20% has still stood the test of time. Obviously, some people have higher venture capital sometimes will have 30%. And some people to get in the business may have 15%. But by and large, 20% is still more or less the rule.

I would say two is probably not as common as it used to be unless it's a small fund. For a large fund, it would probably be 1 or 1.25 or maybe 1.5% and 20. If we look, say at mutual funds, there's a lot of entry and the cost of intermediation falls. There's vanguard, fidelity, lower cost than what there used to be. What's the barrier to entry in private equity that keeps that number at 20? Well, one, you have to raise money, so you have to be able to have some track record to be able to convince people to give you money. It's a lot of money. And remember, you're asking people to give you money not for a day or two or three, like in a mutual fund, but for 10 years.

Theoretically, these are 10-year funds. You probably get most of your money back before 10 years, but there are 10-year funds. The barrier entry is not that significant. When I started Carlisle, there may be 250 private equity, firms in the entire world. Now they're more than 10,000. So the barrier entry is there, but not that's significant to keep people from coming in if they want to. You just have to come in smaller and prove yourself who are a track record before you can get to big funds. Why did private equity take so long to globalize? Well, why did anything take a long time to globalize? Private

equity is globalized as globalization move forward. Most private equity today is still done in Western Europe and United States. Probably two-thirds of all dollars invested in private equity are in Western Europe and United States, the so-called developed markets. It's now moving into the so-called emerging markets, but it's going to take a while because the environment is not quite as susceptible to private equity as it is in the United States. There's not the infrastructure, the talent, the financing markets, the exit markets are not quite as developed as they are in the developed markets. How would you contrast the skills of someone in private equity with the skills of someone

in venture capital? Well, venture capital people are taking bets on entrepreneurs. You don't really know when Facebook showed up, everybody passed on it except Excel. So it's obvious now that Facebook was a great company. company, but why did everybody pass? Because they weren't sure the concept work. They weren't sure that Mark Zuckerberg right out of Harvard, dropped out of Harvard, was really appropriate to do this. So I think venture capital is more of a bet on a concept, more of a bet on an entrepreneur, whereas private equity, you have six months typically to do the due diligence. You can project cash flows

pretty readily because you have previous cash flows from which you can base your future cash flow projections. I would say it's a little bit more scientific in some respects, is less of a crapshoot than venture capital is. Why did you not decide to meet with Mark Zuckerberg way back when? Well, when my now son-in-law told me about his classmate from Phillips Exeter and his then classmate from Harvard, starting a company, I remember the dating services that had been prevalent in the 1960s and they all kind of went bankrupt. And so I thought this was described to me as a dating service, more or less, a way for people

at Harvard to get to know people at other colleges and so forth for dating purposes. And that's actually what Facebook was. People forget it now. But it was only for college kids. When they expanded it to non-college kids, that was an epic change. But it wasn't really part of the original plan, as far as I know. So I didn't meet with them because in those days, I didn't really think of somebody who was a Harvard student was somebody that was going to be the next Bill Gates. And I just thought it was not likely to be successful. I was wrong. As you know, investment banks were once quite often limited partnerships. But now they're not. Is private equity going to undergo the same kind of evolution? And why are they limited partnerships now? Well, you say limited partnerships? You mean the way people invest in the funds? Well, there would be partners of a smaller investment bank, say the way Goldman was a long time ago, but now it's just a publicly traded company. Well, okay. So when you're talking about that concept, yes, there were firms that were private and they were all privately traded. Morgan Stanley, First Boston, Goldman Sachs. Now, there are very few that are privately owned. There's Brown Brothers,

Harriman, and a few others that are still private. In the private equity world, most of the private equity firms are private partnerships. There are, few that are publicly traded. Carlisle, Blackstone, KKR, Apollo, maybe TPG will come public and so forth. I think CBC is another one that's public. But generally, they are privately owned because they're too small to be publicly traded companies. In the words, if you manage a fund of a billion dollars or $2 billion, that's not likely to produce the cash flow that will make a public company seem really warranted for that kind of status. But why are they partnerships? There's a lot of smaller companies that are just privately owned, right? So law firms are often partnerships.

What's the transactions cost advantage of having a private equity company be a partnership? Well, when private equity firms, you tend to get people who are fairly hardworking, fairly smart, and they also have the ability to move quite quickly and go elsewhere. So if they were going to be working for one very wealthy person, and that wealthy person wasn't going to give them a piece of the profits, they might say, I can take my skills and go elsewhere. So you tend to have partnerships because you want to share the wealth, and that's how you attract very talented people.

If you had a very wealthy person, let's say Jeff Bezos or Mark Zuckerberg, they want to set up at a private equity firm to invest and they're the only partner in it. You can probably get some good people, but in the end, they're really good people. Have the skill set. We'll want to get a piece of the 20 percent. And usually these large private family offices don't give 20 percent of the profits to the people working there. So that's one of the reasons. You don't tend to get highly talented people willing to work just for a salary and a bonus. And typically in family offices or an organization is owned by one person, they don't usually give a profit.

piece of the profits, a very large piece of the profits, to the professionals there. What do you think is the best criticism of leveraged buyouts? Well, leverage always has its downsides because leverage implies that you're borrowing money, and when you're borrowing money, you have to pay it back, and sometimes when the economy goes down, it's difficult to pay these back. Now, in the early days of private equity, they typically would borrow, this is hard to believe, 95 to 99% of the purchase price. The famous KKR deal was 95% debt and 5% equity.

And some deals used to be 99% debt. debt. Now you have maybe a capital structure of maybe 40% to 50% debt, and therefore it's not as likely you'll have a default. So the risk is not as great, but there's always risk in leverage. Whenever you have a meltdown in any economy, whenever there's leverage, there's going to be a problem because when the economy slows down, the leverage typically works against you. If you take in combined form the tax advantage given to debt and what is sometimes considered to be a tax advantage given to carried interest, does that mean our tax system is encouraging too much private equity? Well, some people would say you can't have too much private equity. I guess

somebody in the private equity world would say that. There's no doubt that there's been a favorable tax treatment on carried interest, and Congress is debating that again. It's been debating it for some time. The reason it probably hasn't changed yet is that carried interest is applied to not just the buyout people in private equity, but it's also applied to real estate. And real estate is probably where 55 to 60 percent of all the so-called carried interest dollars are actually paid. And there's a real estate developer and developers in every congressional district. So we'll see whether it changes or not. You know, if it does, it does.

Congress has looked at it for a dozen years plus and hasn't changed it yet, but it might well this time. Are private equity firms now using insurance companies as a way of getting very cheap financing? Right. There's a lot of flowed. It's like with checking accounts. People just give them money. They don't expect very high returns.

Well, a number of private equity firms have bought insurance businesses or operating where they have in effect annuity contracts. where they are in effect managing the money to get a higher rate of return than the regular insurance company would get. So if an annuity is supposed to pay out five or six percent a year, but you can manage that money at 10 or 15 or 20 percent, you have a big spread. And therefore, a lot of the private equity firms are now trying to get some of this money so they can earn higher returns on it and they don't have to pay out as higher return as they would for somebody who's in their regular funds. And therefore, it can be an attractive business if you know

what you're doing. But also the insurance regulars have to be comfortable with making sure that you know what you're doing. Now, if you're with your friends or peers and private equity and you're debating the future of private equity, what's the most interesting question where you might disagree with them? Like, what is it you all debate and are not sure about? Well, people are always debate what's the future of private equity? Is it going to grow as exponentially as it has over the last 20 or 30 years? Secondly, will they carried interest 20%?

Will that survive or not? Or because of competition, as your earlier questions suggested, maybe that will go down? You don't know. Will the rates of return that private equity people can achieve, be as attractive as they have been. Private equity didn't grow to this large size because of the charm and good looks of the founders, as you obviously can see. They grew to this large level because we've outperformed as a whole every other asset class over the last 5, 10, 15, 20, and 25 years by anywhere from 300 to 500 basis points on average, the top quartile funds outperformed by a larger amount.

So as long as the returns are probably somewhere between 300 and 500 basis points on average, better than you can get in a public market index, probably private equity will do pretty well. Private equity doesn't outperform, then probably private equity won't survive. When you started Carlisle way back when, did you see that private equity would outperform the market for this long? Well, at the time, no, 1987, the praise private equity didn't even exist. They were called leverage buyouts, and there was a different world. The biggest phenomenon in that time was junk bonds, and that was what was enabling a lot of people to buy companies. It was a heavy use of so-called junk bonds at the time, and equity was not really that big a factor.

You didn't have big equity funds the way you do today. So at that time, I didn't foresee anything like this. And most business people, if you go back and look at their original business plan, you'll find that it bears no relationship to what they actually became. So if you go back and look what Bill Gates, Steve Jobs, Mark Zuckerberg, Jeff Bezos, were going to do at the beginning. What they ultimately turned out to do was completely different. For example, Jeff Bezos, and I knew him at the beginning,

he was just going to sell books over the Internet. That was it, nothing else. And then later he evolved to doing everything over the Internet. So everybody changed their ideas, and I changed my ideas. Initially, I thought it would be a small firm focus on Washington. but then we ultimately became a global organization. Are SPACs a good way to bypass what is now an over-regulated IPO process, or is it a passing fancy? I think SPACs have come down in terms of their inflated values over the last couple weeks and maybe the last couple months.

I think they won't go away, but I don't think they're going to transform the IPO process to such an extent that IPOs will go away. IPOs are heavily regulated and it's very carefully reviewed by the SEC. Also very expensive to get one done. It takes a lot of time. Spacks have replaced that by making it easier to get things done more cheaply. But in the end, like anything in life, when you take a shortcut, there are penalties for it sometimes. And right now we're seeing that people are nervous about the SPAC valuations. And therefore, I'd say some of the air has come out of the SPAC valuations.

If we look at an IPO, it seems there's very often a price pop, which might suggest there was money left on the table. there's an underwriter taking a fairly large fee. Why don't the companies just auction off the stock, say the way Google did or sometimes happens in Israel? Like, what's the value added of the intermediary in an IPO? Well, when you say, why do 95% of the people that go public or more do this process, are they all stupid? You have to say, well, there must be some reason.

The reason is that when you go through this process, by the time somebody gets to buy the stock, they know it's been vetted by reasonably impressive organizations. It's been reviewed by the SEC. and while there are a fair number of fees associated with it, the fees are not so high as to discourage people from going this way. And when you price an IPO, you typically want to have about a 15% bounce the first day because you want people to buy it the first day to feel that they made a good decision. You want people to buy the stock at the opening. So it's not uncommon to have a 15% bounce of what they price them for that. If you have a 50% bounce,

that probably means the underwriter made a mistake underpriced it. And if it goes down, then obviously the underwriter made a big mistake because you're going to have a lot of unhappy the investors who bought it and stock went down the first day. That should never happen, but it does. But is the future simply more direct offerings? Because when Google went on the market, we had all heard of Google, right? Google was as credible as anyone who might have been underwriting the stock of a Google IPO. So they just sold the stock, right?

Captured whatever price pop there might be for themselves. Well, Google went public for a direct process. I think it at $85 a share. And now it's trading at $2,000 or $3,000 a share. So obviously it's been a great stock. but from the beginning there was great demand. People knew that Google had a search process that was better than any of the other search process out there.

Remember, when Google started, people said, who wants to give Google money as a venture capitalist? Because there already saw a lot of search engines out there. Google had so much trouble with their venture capitalists at the beginning that venture capitalists talked about taking the money back because Google wasn't actually performing what they said they were going to do. But when Google was ready to go public, people knew there were so much demand for this

that you didn't need an underwriter probably to take off the fees that they would probably take off because they're underwriting fees might be anywhere from 4 to 6%. And I think the Google founder said there's so much demand, we don't really need to have the underwriter and take that spread. But there are very few Googles are out there. The average company that goes public does not have the demand that Google kind of had when it was going public. Does the financial sector draw too much talent away from the rest of the real economy?

Well, I'd say the financial sector is part of the real economy. It's a large part of the United States economy. So there's nothing wrong with the financial sector getting very talented people. but there are plenty of talented people in lots of places. So academic world has talented people, the sports world has talented people, lots of talented people in many different areas. So I don't think the financial service world is getting too many talented people. I think that most talented people right now are probably a lot of those people who are going into

entrepreneurial startups. You could argue that's financial, but they're basically they're entrepreneurs. It used to be people wanted to go to Goldman Sachs or Blackstone or Carly or McKinsey. Now a lot of people coming to the best colleges, they want to do a startup. What fraction of the financial sector do you think is zero sum? you mean doesn't produce any value? Right, but it's just a race to get there first. Like some people would say high frequency trading, that's zero sum.

May or may not be true, but what do you think is zero sum? I'm not sure I would know exactly what is a zero sum in terms of the way you're raising the question. What do you mean that is... No value added, but you get profit, someone else takes a loss. You have talent diverted into seeking of rents, not producing anything that a consumer ever uses. Well, of course, those people that don't like private equity would say, well, private equity people is a zero-sum, they're not adding any value. I don't agree with that. I think they do add value. But you lower costs and you boost share prices, right? At least on average.

Right. Well, I don't think anything that's zero-sum will survive very long. You know, you could argue that cryptocurrencies are they a zero-sum or not? Some people think that they're complete zeros and they're worth nothing and people are buying these things at their great peril. Other people think that they actually provide a service where people don't want to have U.S. currency or other foreign currencies. They have something on the side that's a different kind of currency. You can argue that for some time. Right now, we don't know whether it's a zero-sum game or not. What do you think of crypto? What's your best guess?

My view is that the genie is out of the bottle, and it's too late for the U.S. government to say, don't do this anymore. Remember, we went through prohibition and we said, people don't drink alcohol, it's bad for you, and it didn't really work out. So if we were to ban cryptocurrencies, people will find a way to create cryptocurrencies offshore or some illegal way to do it. People don't trust the government as much as they used to. And secondly, I think that there is money to be made in the cryptocurrency.

cryptocurrency world, if you're careful, you know what you're doing. But I've not bought any cryptocurrencies. I have invested in some companies that service the industry. And what I say to people is, I analogize it to gambling. If you are a gambler and you go to Las Vegas, you know you're going to lose money if you spend the love time there. You don't care because you're having fun. You really like the setting. And it's just, it's your pleasure. The same thing is true with crypto. A lot of people like to be seeing the oscillation of these cryptocurrencies. They like to hear about it. They think there are the new wave of what's going on. So they buy it. And I say, if you want to do that, just make it like you do if you go to Las Vegas.

Put one or two or three percent of your net worth in, have fun watching the stocks go up or the currencies go up and down. But don't put in 50 percent of your money because I think that's likely to be a fool's errand. If you look at the payroll of the New Jersey net in the NBA as a private equity guy. The New York nets. Sorry, now it's the Brooklyn Net. You have a New Jersey bias.

Correct. I do. I still do. But what do you think? Do you think the team's overrated? Their costs are too high? They need a leverage buyout? Or do you think it's fine?

I'm not to go interview Joe Sy's soon, so I don't know if I will ask him whether his team is overrated. Look, in that business, unlike many other businesses, it only takes one or two or three players to make a championship team. So in baseball, you probably can't win a championship or football with just one or two really great players. In basketball, you can, and so you probably can't pay these people too much. And, you know, as you know, there's caps on how much you're allowed to pay people in basketball, and they have these maximum contracts. I would say very few people I have known, and I know a lot of people who have bought sports teams, very few people who have bought sports teams have lost money owning those teams. You typically make the money when you sell them. Now, are the players overrated or overpaid? It's hard for me to say that anybody's overpaid if they're filling the arenas and so forth and they have unique talents.

So in Kevin Durant's case, he's a unique talent, a very unique talent, one of the best basketball players the last 20 or 30 years. So I don't know you can overpay him. And Kyrie Irving, you know, he went to Duke. So you can never overpay anybody that went to Duke is my view. If he gets vaccinated. Well, we'll see whether he gets vaccinated or not. and James Hardin is obviously an incredible triple threat. So I don't know that they're overpaid. But right now, I think the owner is pretty happy with the team that he has. He wish he'd won a championship last year, but he thinks he won't win one this year. How is learning to be a great interviewer made you a better investor?

I'm not saying that it has. It may not have. If you want to be great at something, you've spent a lot of time. I'm spending a lot of time doing interviewing. Probably not a great investor so much. Now, what I've done is in the investing world, I was never the investor at Carlisle. I was always the fundraiser, the strategist, the face of the firm, and the recruiter. I had other people actually knew how to invest better. So I would sit on the investment committees

and give my points of view, but they weren't really relying on me. I've set up a family office, and I've hired some pretty good people to invest my money outside of Carlisle without being in conflict with Carlisle. And I look at what they're doing and they tell me about what they're doing, but I'm not the day-to-day investor. So I'm not sure interviewing has maybe a better investor, but you're doing a lot of interviewing. It might make you a better investor. I don't know. What is it you think you know about recruiting of talent that is not obvious and other people might not know? Well, when I recruit people, and I now have been doing this for many years, I generally have certain biases, and my biases are ones that have generally proven to be right, but sometimes

I'm wrong. I've made a mistake in hiring some people, and I've made a mistake in not hiring some people. But generally, I look for people who are hardworking, reasonably intelligent, have some vision of what they want to do with their life. They're not difficult to deal with. They have some humility about themselves. They know how to get along with other people and they have to share the credit. And there's always going to be an outlier, a genius who can't work with other people who might be a good investor or a person who is not all that smart, but just very, very hardworking. So you just can't really know who's going to be a great investor.

I'm doing a book now on great investors, and it'll come out next year. And I have a TV show now on investing. And basically, I found that the great investors all have in common, you know, a pretty high degree of IQ, but it's focus. And it's a desire to prove that they're right about something as opposed to making money. In the end, once they've become a great investor, they've got enough money for their real purposes. They just like the game of investing it, the way you might like the game of betting or some other game.

So there are many different qualities that great investors have. I wouldn't say that I have them, but I've observed other people having them. What does Wall Street least understand about Washington? Well, Washington is relying on Wall Street, and Wall Street is relying on Washington. It's a bizarre symbiotic relationship. People on Wall Street say, well, the debt's not so bad because, you know, people in Washington, they keep passing these bills, and they must know what they're doing down there, or the Fed wouldn't allow this to happen, or the Trump.

Treasury wouldn't all this happen. People down here are saying, well, the Wall Street markets, these people are good investors. If we were borrowing too much money, the markets would collapse, and they're each relying on the other. And so at this point, I think what Wall Street doesn't really understand about Washington is that Washington basically isn't all that sensitive to what's going on in the markets unless there's a gigantic collapse. Then they pay a lot of attention. But generally, day-to-day, people on Capitol Hill and the White House are not focused on the markets the way that a professional investor might be. The ups and downs and oscillations don't bother them as much unless there's a gigantic collapse, of course. What does Silicon Valley understand least about Washington?

Well, Silicon Valley historically didn't pay much attention to Washington, and therefore they had very few lobbyists here. They had very few people to tell their story. Now, I think the biggest lobbyists here are the technology companies, Google, Facebook, Microsoft, have gigantic lobbying operations now because they realize that the government United States can impact their businesses in a way that they didn't probably realize when they first started these companies. But what is it they don't understand now still? Right? It's not in their cultural blood, so to speak. So they throw resources at the problem. Do they understand how DC works? Well, I think they don't understand in technology. Whoever has the better technology might ultimately prevail. And therefore merit is ultimately thought to be the

ultimate important factor. Who has the best software, who has the best hardware, who has the best process for getting something done. In Washington, D.C., the merits are not necessarily the most important thing. It's the politics that are much more important. And so sometimes if somebody from Silicon Valley comes to Washington and says, I have the best software, look what it's doing for America. It's great. We're selling a lot of services and people are living better because of it. That may not mean much to people in Washington if some people are complaining all the time because the prices are too high or something like that over the product. Should we let members of Congress or for that matter regional Fed Bank presidents trade equities and securities. Well, there were two Fed bank presidents,

one in Boston, one in Dallas, who managed to do that, and they've now resigned. But it wasn't illegal, right? Like, they were allowed to do it. It was not illegal, and it's not illegal, as far as I know, for the chairman of the Fed to do that. It's not illegal for the President of the United States to do that. It's not illegal. You have to disclose it, but it's not illegal. But should it be illegal? Well, I'm not sure that in all cases it should be illegal. Remember, we are asking people to work for very, very modest incomes. And are they supposed to put all of their trust into complete treasury bills and that's all they have?

You might get fewer people coming to government service if they could only get treasury bill rates of return. But say S&P 500. They can get a blindly managed mutual fund. I think that would be better rather than doing the stock trading yourself. I do think it's better if you were to go into a mutual fund or things like that. Like the chairman of the feds, typically they have somebody like a mutual fund or they might have T bills or things like that.

But I think it's better to not be true. trading when you're in those positions. I do think that's true. Here's a reader question, and I quote, another impolite question. Why is it that so many politicians and their aides and their wives, children, cousins become wealthy in the private sector? Well, the private sector is designed, among other things, if you want to go into that area, to make money. So it's not that difficult to be wealthy by the standards of government compensation. If you're a member of Congress, your compensation is roughly $180,000 a year. Hasn't changed much for about 20 years. So if you go into the private sector, it's difficult to make less than that

if you're really doing something in the private sector that adds some value. And also, obviously, some people who do lobbying and other kinds of things are using their contacts and so forth that they got in government service. If you were to say, nobody who's ever served in government service can ever lobby anybody again, you'll probably get fewer talented people to come into government service. I think a lot of people won't go into government service now because you have to sell all your assets if you go into government service, and that's a barrier to some people. So, you know, you can have constraints on getting people in the government servicing, therefore you won't get the best people. So, for example, when we only had three million people in this country, who do we have in government

service? Well, we had George Washington, Thomas Jefferson, John Adams, James Madison, James Monroe, John Jay. Now we have 330 million people, and where are the Thomas Jeffers, where are the George Washington's? They may not be in government service. They may be doing other things. So I think we often have more barriers to getting good people in a government than we should have. I'm under the anecdotal impression that in the 1960s, the 1970s, the smartest young people were more interested in joining the D.C. elite than is currently the case. Do you agree? Well, when John Kennedy became president, he had a clarion call to young people to come in and do government service. He was a young man, who was 43 years old, and his cabinet was relatively young. And yes, it was a time where it was

pre-Vietnam and pre-Watergate. And so there was much greater belief that what government could do was good and there was much less cynicism and the government of the United States didn't have the credibility gap that it developed in Vietnam and Watergate and so forth. So I think, yes, it was a time where there was a lot of interest in young people coming to government service. Today, a lot of the best young people, they want to go and be entrepreneurs or they want to create, you know, things in Silicon Valley or be a venture capital and so forth. But there's still a lot of talent of people going to government, but I do think that government does make it more difficult than it used to go into government service because of the various constraints you

might have when you go in terms of what you can do with your existing money or what you can do after you leave government. But it's not lacking that in some good people going to government, but I think the most talented people in the country probably don't want to go into government as much as they did in the 1960s. You once mentioned that you were not a good lawyer. Why weren't you a good lawyer? To be a good lawyer, I think you have to have a tension to detail as opposed to the big picture sometimes. Secondly, you have to obsess over the merits of your client's causes in some cases. Third, you can't be distracted by something you think is more interesting. So I thought government service was more interesting than being a lawyer. And I also thought that what lawyers do

and corporate lawyers do was not the best use of my gray matter. So I probably didn't enjoy it. And I didn't think it was, you know, all that attractive way to spend my life. Why does so many wealthy people have legal backgrounds, but the very wealthiest people typically do not? Well, lawyers tend to be very process oriented and very systematic. And, and And as a result, they tend not to take big leaps of faith because you're taught in law school to worry about precedent. Well, precedent is not what makes entrepreneurs successful. You have to ignore precedent and you'll break through walls. You can't be worried about what the precedent was.

If you're worried about precedent, you'll never make a leap of faith to create a company like Apple or company like Amazon. So lawyers tend to be more, I would say, tradition-oriented, more process-oriented and more precedent-oriented than great entrepreneurs are. within say a 25-year time horizon, what do you think is the greatest risk to American prosperity? Probably the rise of China. China is a bigger population than we have by three times. And given the fact that they have a different type of capitalist system than we do, but they have a capitalist system, I would say. Given their population base and their technology strengths, I think that we will have to recognize that 25 from years from now, it's unlikely we'll be the biggest economy in the world. And if we're not the biggest economy in the world, it's unlikely we can

support the biggest military in the world and unlikely will be the biggest geopolitical power in the world. But how would that harm our prosperity? I can see it might be bad for smaller Asian nations, bad for Taiwan, obviously, but many others. But why would we be worse off as economic entities? Well, generally, the most prosperous countries tend to be ones that are leaders in, let's say, they're given areas. So if we're not the leader in technology, we're not the leader in financial services because those worlds have shifted to China, we probably won't get the profits and the most talented people coming here and a lot of other kinds of things that you need to be a prosperous country. We've been the biggest economy in the world since 1870.

And probably in about 10 years or so, as measured by GDP, we won't be. By purchase price parity, we're already not the biggest. I do think that more and more people want to deal with the biggest economies in the world. And the biggest economy in the world will have more money to develop new companies and to send to entrepreneurs and so forth. But I'm still very bullish on America, but 25 years down the road is hard to predict. but I'd say 25 years from now, given our population, we probably won't be as prosperous as we are now, relatively speaking.

Before the pandemic, you were visiting China six to seven times a year. What's your favorite part of China? Well, I think the most exciting city in the world today, or at least I'd say before COVID, was probably Shanghai, because Shanghai was the center of the Chinese business world, and China was doing so many exciting things pre-COVID. And I've often said that, you know, before Shanghai and China came along, I thought Hong Kong was among the most attractive places for business people to go in terms of pure excitement outside of the United States. Now, I think that's shifted to Shanghai. I haven't been to China now in about two years because of COVID, but I think Shanghai is probably an extremely attractive place as a business center. Let's consider your role as

donor and philanthropist. Let's say, and maybe you've even done this, you had $200 million to allocate to Baltimore, to make it a better city, right? It's not enough money to be transformative, but it's not a tiny sum. How would you spend it? Well, Baltimore has serious problems. When I was growing up, it was the eighth largest city in the United States with a population of 939,000. Now it's about half that size. So you've had a white flight. You've also had the business headquarters have largely moved out of Baltimore.

There aren't that many headquarters there compared to what it used to be. So what would I do with $200 million? Well, $200 million, as you suggest, is not $2 billion or $20 billion. With $200 million, I guess I would put some of it into education because Baltimore has a very high dropout rate in high school and also has a very high, I would say, illiteracy rate. It has a high syphilis rate. It has a high STD rate. It has a high murder rate.

So I don't know the $200 million would solve all those problems. But if I could do anything to help Baltimore, it would probably be to use some of that money to incent businesses to come back in the Baltimore and give them some incentives to come back in. Because if you get businesses to come back in, they'll hire people. And ultimately that will help out. But you've got to deal with the education system. If you have a large percentage of your population that's functionally illiterate,

that's going to produce a lot of crime, and it's also going to produce a lot of poverty. There was a time, I think, in the 1990s, when the word was, well, Baltimore has come back, there's the aquarium, the waterfront has been refurbished, and somehow that all didn't materialize. So the momentum looked good for at least five years. What actually do you think went wrong? Well, Baltimore renamed itself Charmed City under Mayor Schaefer. Mayor Schaefer was a very dynamic mayor, but he couldn't control white flight, and therefore the city, wealthiest people moved out.

and the biggest companies in Baltimore moved out. And so in the end, I think crime just took over, and the poverty rate just accelerated, and just so many endemic problems. And Baltimore did not have entrepreneurs coming there, starting new companies. And it didn't have the kind of revitalization of the entrepreneurial spirit that you saw in some cities which had gone through difficult times. But take Pittsburgh as an example. Pittsburgh used to be a steel center.

Now people see it as an artificial intelligence center or as a computer center or as a city that's remade itself in many ways. Now, it didn't have quite the minority population that Baltimore did, but it in many ways has revitalized itself, and some other cities have not been able to revitalize himself. Take Detroit. Detroit is also like Baltimore, enormous socioeconomic problems, and despite the best efforts of some pretty talented business people there, like Mr. Gilbert, they just haven't really been able to revitalize themselves to the point where they were in the 1950s, I'd say, as a leader. Where do you think your marginal dollar is the most social good? being paid to government in the form of tax, being invested through private equity at a reasonably

high return, or in philanthropy? Philanthropy, because when I pay taxes, and I do pay a fair amount of taxes, when I pay taxes, it goes for good purpose, I guess, but it's hard to know that I'm paying enough taxes to make change the world, and nobody knows exactly what I'm paying. When I do private equity, lots of people are doing private equity, so I'm not sure I'm changing the world that much there. When I make a philanthropic gift that gets attention, it might inspire people to do something. So if I fix the Washington Monument, you know, might encourage other people to do something

with the same kind of dollars or the same kind of motive in mind, which is to say, I'm going to give back to the country in that way. And it gets more attention than maybe it deserves. The bulk of my money goes to medical research and education and scholarships. But 10% goes to what I call patriotic philanthropy. So fixing the Washington Monument gets a disproportionate amount of attention. But it might incent a large number of people to really do the same things, and that would probably be good.

But you seem to be in good health. What if someone makes the argument to you, you would do the world more good by not giving away money now, but investing it through private equity, earning whatever percent you could earn, and when you're a bit older, give much more away. You can always give more to philanthropy five years down the road. Well, of course, you never know when you're going to die. And COVID, you know, we lost 700,000 Americans in COVID. I could have been one of them. I'm 72 years old.

So if you wait too long to give away your money, you might find your executor giving it away. But you could even write that into your will, right, if you wanted. but you'd have more to give away, maybe 15% a year. Yes, but if you take the view that happy people live longer, and if giving away money while you're alive and you're seeing it being given away, and that makes you happier, you might live longer. Grumpy people, my theory is don't live as long, happy people live longer. So if giving away money and having people say to me,

you're doing something good for the country makes me feel good, it might make me live longer. So if I waited until the last moment to give away the money, it might be too late to have that feel good experience. Do you think the foundations of other very wealthy people after their deaths have gone well or gone poorly? Like anything in life, they're good cases and they're bad cases. Some people have done really good things with their foundations after they died, and some people's foundations probably haven't been as productive. But I would say in the end, I encourage people to give away as much money as they can while they're alive.

I am amazed that probably 99.9% of the population gives away about 95% of its money upon their death. You kind of say to yourself, why are you waiting so long? I remember, I won't mention his name, but a very famous businessman said, I'm going to give away when he was 93 years old. I'm going to give away $400 million to my college upon my death. You kind of say, well, what do you need that $400 million between the age of 93 and 94-95? Why don't just give it away now? I don't understand why people wait until they're dead before the money is given away.

You presumably think you're going to be in heaven and see where it's gone, but that's a big risk. How do you handle or filter? What must be a steady stream of solicitations and require. requests. Money, money, money, money, right? Everyone wants money. How do you actually process a near infinite demand? I don't have the money that Bill Gates has. I asked Bill the same question now. I said, Bill, everybody's coming here for money all the time. He says, I have a lot of people that are hired to say no, so they don't really get to him so easily. I don't have a foundation. I don't have anybody doing my philanthropy, so everything comes directly to me. I have four standards I use,

though. Number one is, I want to see something with my money started that I wouldn't otherwise get started. Or second, something that wouldn't otherwise get finished. Or third, I have an intellectual interest in it, so I think I will stay involved, and I just won't write a check and ignore it. And fourth, I'm likely to see progress in my lifetime. So those are my standards that I use, and I'd like to be involved in the things I'm doing as well. But, you know, in the end, I've made some mistakes in philanthropy, and some things have worked out well. Would you agree with the judgment that today art museums are less culturally central than they used to be, and they need to do something to remedy that? Well, I was elected earlier today, the new National Gallery of Art Chairman.

Congratulations. It would be unlikely for me to say that art museums are not relevant anymore. No, I think art is an important part of society, and from time immemorial, people have been painting and doing other kinds of visual arts, and I think people's brains get improved by seeing what people have done with their creative skills. So, no, I think art museums and all museums are good, and this is the reason. The human brain has not yet evolved to the point where if you see a picture of the Mona Lisa on a computer slide, it's the same experience as going to the Louvre and see an

person. Because before you go to the Louvre, while you're there, and afterwards, you're more likely to read about it. You're more likely to learn about it. And I think when you do that, you're more likely to have a better human experience than just looking at a computer slide. So if you eliminate all museums and everything was on a computer slide, I'm not sure that that'd be a good experience for people. Should the National Gallery have canceled its pending Neapolitan Baroque exhibit? Well, we've had a lot of issues because of COVID and so forth. So we want to make certain that people can attend. But I've been going to the National Gallery. It more or less works. Other museums are putting on the exhibit. People worked for years on it and then to...

You mean the Gustin? Not the Phil of Guston. What? Not that one? Not that's being postponed. But there was an exhibit plan. Great Baroque works from Naples. That was supposed to happen. A national gallery a month ago, I'm not sure, but basically just said, no, we're not going to do this. Well, there were some considerations for that. But I'd say, look, we put on a lot of exhibitions. Everything can't work out perfectly as originally planned. But we are increasing our exhibition schedule. and I hope that we can be a much bigger leader in exhibitions than we have been in, let's say, recent decades. And what is personally most important or closest to you in the visual arts? Well, the most important thing is having people appreciate the arts.

No, but what artist? What excites you? To look at what? Well, there's so many different types of art, but increasingly I'm collecting artwork done by minority artists. The National Gallery of Art historically has been a Western art museum, but it hasn't really had very many artists who are women, very many artists who are minority. very many artists who are African-American, very many artists who are Latin American. So we are now trying to increase our ability to show people that great artists don't have to be white men from Europe. And that's an important focus of what we're trying to do. How would you reform or improve the American system of arts funding? Well, right now, arts funding is dependent to the largest extent on philanthropy.

And governments tend to be cutting back what they're giving for arts funding. And I'm talking about performing arts as well as visual arts. So right now you have many different performing arts venues and many different visual arts venues that are really supplicants at the table of the government begging for scraps typically for money and that you're very dependent on philanthropy. I wish we would have more government funding of the arts as they do in Europe than we do have now. Right now we're very dependent on philanthropists for a large part of what makes possible for museums and performing arts organizations to exist.

But how would you do that? Would it be federal? Would it be state? Would it be through the NEA? would it be a direct congressional allegation to the National Gallery or Smithsonian? Well, we do get money. The National Gallery does get a great deal of money from the federal government. But other art museums around the country don't get as much, obviously, from state governments

as much as they might want or from local governments. I don't think there's any one formula for doing it, but I think we have to convince legislators and other government administrators that the arts isn't an afterthought that's a nice little thing off to the side and it's not going to help little Johnny or little Janie be a better person by seeing good museums and so forth. We convince people that around the rest of the world, people recognize that you want to stimulate the brain and create great people,

very often stimulate them through the performing arts and the visual arts is a great way to make the brain work better. And so we should see it as an education tool, not just as a museum. As you know, most art museums put out a pretty small percentage of their overall collection. That's correct. It could be as low as 5%.

As an economist, this worries me. Like, is this an inefficiency? Should there be a more rapid circulate? of artistic works, should policy encourage this? Well, every art museum and every gallery has more art than they can display. We don't have infinite amount of space. But if you put everything on display all the time, you wouldn't have enough space probably for it. And you might not attract new people because if people think the same things are going to be there all the time,

they're not going to come back a second time or third time. So you've got to rotate the collection. So people will come back and see some things that are new. There's plenty of empty space in Washington, D.C. Other buildings, community centers. the centers the walk to the men's room? Well, there's always cost. In addition, if you display art all the time,

some of it could be degraded or fade because if you expose art to sunlight unduly, that it's not protected. Sometimes it could damage the art. But I'm glad that the art museums have a lot of things so they can circulate and get people to come back and back. But, yes, there's always space, but there's always money to build that space out.

It's not insignificant. In terms of your time management, obviously you get a lot done. What is your most unusual time management habit? Well, probably I'm the only person in the United States who's still going out and buying newspapers every day and reading all six of them every day. That makes two of us. Okay.

So I still go and buy the newspapers. I don't read them online. So I go drive to the place where I can find the newspapers. I buy them. I read them. I don't like to read newspapers online. So that's probably a use of my time that some people would say is not a useful use because I could read online, but I don't enjoy the experience as much.

Why don't you have them delivered, which is what I do? Because I travel a lot, and so I'm of different places, so I'm not in my home that much. At what level of wealth do you think you were happiest? You know, Felix Rowe, then an investment banker, used to be famous investment banker, later became Ambassador France. When he was asked once, how much money does it take to make you feel financially secure, he said, is exactly twice whatever you actually have. So that's probably true. No matter what wealth you have, you always think you need a bit more to be financially secure.

So I have more money now than I ever thought I would have when I was younger and more money than I probably need to get through the rest of my life. So I am very fortunate. But, you know, I still think that I would like to have more money so I can give away more money. I'm giving away all my money. I just want to give away more. It is my intuition that the billionaires I know are quite different from the multimillionaires. What do you think actually makes that difference in terms of temperament or character? Well, of course, a billion isn't what it used to be.

You know, now it's a term of derision. It used to be, if he's a billionaire, he's a accomplished business person. Now it's a term of derision everywhere because people say this is a billionaire. These are terrible people. These billionaires are doing terrible things to society. But multimillionaires probably didn't have as much luck as the billionaires did. I suspect if making money is considered a matter of luck, and I guess some people would consider that.

But I don't think that billionaires are any happier than multimillionaires or any happier than non-millionaires. You know, happiness is the most elusive thing in life. And I know a lot of billionaires, and I can't say they're as happy. as some of the people who don't have any money. But isn't there some difference in persistence between the billionaires and the multimillionaires that's not just luck or no? Persistence is necessary if you're going to be successful in almost anything in life.

And some of the billionaires had lucky ideas and they persisted. But there are a lot of multimillionaires who said, look, I have a good idea and I've made a company work. I'm now worth $100 million, but I want to spend my time doing other things. So it's not always the case that people feel they have to make a billion dollars in order to feel successful with their life. You've been a major donor to a number of very well-known universities. If it were all up to you, how would you fix higher education? What would you change? Well, the higher education system in the United States is still the envy of the world.

Our K-12 system is obviously not the envy of the world. Higher education system, certainly the private universities are the envy of the world in terms of the way they work. But they can always be better. It's not clear that we educate people in all the ways I would like. For example, you can graduate from almost any college in United States without having having to take an American history course. And so very few people know much about American history. And in our country, I think that's a sad situation. So I wish people would learn a little bit more about our country's background and probably having more core courses that would get you to

learn certain basic things to be a good citizen would probably be something I would recommend people doing. Harvard and Princeton, Chicago, and Duke, they're all doing great. But if you look at completion rates for the system as a whole, it's even hard to learn what that number is. I suspect it's about 40% from what I can tell. The college dropout rate is about 25%, something like that. But those who finish, you know, state schools, everything, seems to be below half. So what are we doing wrong? The returns to college on paper are pretty high, right? The socioeconomic returns, health returns may be higher yet, but so many Americans are not finishing. Where are we failing whom and how? Well, one, we are telling people that the value of a college education isn't how

much money you make as opposed to what you can learn as a human and actually have a better experience as a human by getting an education. So I think it's unfortunate that we only worry about whether you can make a certain amount of money by going to college. And therefore, sometimes people say, after one or two years, I'll drop out and get a job I can get a fair amount of money now or just as much as I had a college degree. Whereas I think it'd be better off if people actually got a degree and appreciated the value of learning and we're learners throughout the rest of their life. But that's a whole separate subject. I think people are dropping out, in part because economic pressures. COVID has obviously probably increased the dropout rate.

And also there's a lot of family pressures and other things to support families in the case of lower income people. But it's unfortunate because I think higher education is really the pathway to, on my view, a happier life and a more successful life. If you look at data on college professors or even incoming students at Harvard, it seems they're very left wing and they're much more left wing than they were before. Now, one might even be a Democrat or have left-leaning sympathies, but it seems the system is somehow out of balance, right? I mean, what went wrong and how do we fix that? Well, your presupposition is that there's left wing. Left wing is a pejorative term. You might,

you could use the term liberal. But I don't know that they are liberal anymore, right? Well, also, you have to remember, the Ivy League schools that often are the ones seen as being too, quote, liberal or left wing, they are a tiny part of the country's education system. So if you go to Kansas State University or Oklahoma State University or the equivalent in the Midwest, I'm not sure the students are quite as left-leaning as you might think. So on the whole, you know, remember the country's kind of split down the middle politically, left and right, and I suspect college populations throughout the course of history. College students have probably been slightly more liberal than they are when they are 50s or 60s. This is the normal course of life

is people tend to be a little bit more liberal when they're younger than when they're older. When you interview someone, how do you prepare for that? What do you do? Well, the person has written a book, I read the book. And then if, you know, a person has a written a book, I will read everything that's written about the person of the last year or two. I gather it up. And then what I do is I write up some questions and then I kind of memorize them a bit and sort of work my brain so that I can have the conversation with the person without, you know, referring to the notes so much my style is not to do that.

But, you know, I try to listen to what the person says. Remember that, you know, being a good interview or it means being a good listener, not just a good questioner. And I also think you have to engage the person and get the person to loosen up and make the person feel this is a good experience and all those kind of things. And it takes some time to do that. And I've now been doing it for a number of years. So I've developed this skill a little bit. And I've been surprised at how many people think the way I do it is attractive and unusual or fun to watch. And it wasn't something I was trained to do, but something I've evolved into. What's your favorite book?

Well, my favorite book of all, I would say, other than the ones I've written, I guess I would say, is the Bible. Because if you're going to be in any one place and you can only have one book, the Bible is basically as the story about humanity is more or less throughout all the book. And it's probably, if you're on a deserted island, you're going to have one book. You probably would get the most out of the Bible, be my guess. What is most appealing to you in the Magna Carta? Well, the Magna Carta that I own is the only one in private hands. And so whenever you can have something that's unique, that's attracted,

it was going to leave the country most likely, so I kept it in the country. But what's most important about it, it was the inspiration for the Declaration of Independence. It had a bigger influence in this country's history than honest. it did in England. In England, it was ignored for quite some time. But in this country, people, when they got charters from the king of England, the charters said, in effect, you have the rights of Englishmen, which meant the rights of Magna Carta. And so when the revolution started, people started citing this as the rights of the Magna Carta. And this was often said to be the kind of thing that inspired the revolution. So I think it's the forerunner to the

Declaration of Independence. Are there any changes you would make in our Constitution? Yes. When you think about it, the Constitution was put together by, you know, more or less 55 white Christian men who were property owners. If you had a constitutional convention today that represented today's population and they had more gender diversity than they had then, it would obviously be a different kind of thing. But if I could do anything, make any one change, I would probably put the equal rights amendment in. While I'm not sure it's necessary at this point given the way the law has evolved, I do think it would make many people feel better, were included. You know, it only came one state short of ratification. I think I would probably amend that. Should we have a larger House of Representatives?

I've never been asked that question before I would have a smaller one. As you know, the First Amendment to the Constitution, as proposed in the Bill of Rights, would have actually had a House that would now be like 10,000 members. If that First Amendment had been passed, it wasn't approved by the States, it wasn't ratified. I think 435 is more than enough. You could argue for shrinking it a bit, because right now it is very large, but I wouldn't certainly enhance it. I think it would be too big.

Living or dead, whom would you most like to interview? Well, it's an interesting question. The phenomenon that we're engaging in now, which is an interview, is a phenomenon that didn't really exist throughout most of organized history. So we don't have any interviews of Cleopatra, Charlemagne, Alexander the Great, Napoleon, William Shakespeare, or George Washington, or even Abraham Lincoln. If I could interview anybody that's ever lived, it would be Abraham Lincoln. I think he was the greatest American, and I think he was the kind of person that would be an

interesting interviewee. He had a good sense of humor. He had a pretty good perspective on himself, and he did some things that I think were pretty impressive. If I look at your books of interviews, all the different people you've interviewed and online, it's striking to me, there are a relatively, relatively few what you might call weirdos in the group. So in your new book, there's Ken Burns, there's Madeline Albright, who's Winton

Marsalis, but someone just out there, right, who's radical or different or not well known, why not interview more weirdos? Well, I interview people I usually know, and I've had some relation with, I don't probably know as many weirdos as maybe I know normal people. But they would accept the invite, a lot of weirdos, like they'll accept my invites if I ask a weirdo. We had a homeless guy on this program. That was a good episode.

Well, it's a good idea for another book. Maybe just weirdos, or I don't know, but I don't know if that book would sell as well. But, you know, you could argue a lot of people I've interviewed. They were considered weird by a lot of people when they were growing up. They just, they got more famous. They weren't considered quite as weird. Who mentored you? Well, I don't know that any one person mentored me.

I worked for Ted Sorensen briefly a bit when I was practicing law. I worked for Stuart Eisenstant when I worked at the White House. But since I left the White House, I haven't had a boss. You know, I'm now 72, and I left the White House since 31. So I haven't had a boss for 41 years or so. But I admired a lot of people, and I brought in a lot of people in my firm that I thought were very impressive. And two of them that I thought were extremely impressive were Jim Baker, former Secretary of State and George Herbert Walker Bush, President of the United States. And, you know, very impressive people.

I got to know them. And I, you know, learned a lot from them. And what do you think you understand about mentoring that might not be obvious? It takes a lot of time. I'm not a good mentor myself because I realize that to be a good mentor to people, you really have to, put a lot of time into it. Now, a lot of people have come to me later in their career and said, you were a mentor to me, but I think they're being polite. I may have helped them a little bit or give them some advice, but being a mentor, it really takes a lot of time. Do you think a person

should always have mentors, including much younger mentors? Well, a lot of people have been successful in life without having mentors. I think mentors can be helpful to you, for sure, but I wouldn't obsess over it. Having a mentor, if you can't find somebody that's going to be helpful, having a bad mentor can be not helpful. I know in your book many different interviews with, of course, different people. Again, the book is The American Experiment, Dialogues on a Dream. But the process of doing the book, just to close, if you had to sum up what you feel you learned from the entirety of the interviews, maybe at a very meta level, maybe you just learned

about your own learning, what's the main thing you learned doing the book? Well, the country has evolved, and it is not the country that was anticipated by the founding fathers. They came up with some wonderful rhetoric that all men are going to be great equal, but the truth is that we have lived in a way where not all people have been treated equal. And so the country's history and the experiment is whether we can have a representative democracy survive and actually live up to the rhetoric of the founding fathers without destroying the country. And we've had stress tests that have almost destroyed the country. Civil War came close to it. And as I pointed out in the book, we had a couple stress tests

recently, most recently in the election in the January 6th events. But we survived that in part because what I describe in the book as certain genes of America that we have as part of our body politic. One of them is the rule of law and the belief that on the civilian control of the military and separation of powers and so forth. Those kind of genes prevailed on January 6th and subsequently. I think that was a good thing. David Rubinstein, thank you very much. My pleasure.

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