Open Book with Anthony Scaramucci - Wait, Did Our Economy Just Stop?! With Liz Hoffman

Episode Date: April 3, 2023

In this episode, Anthony talks with Liz Hoffman about her book Crash Landing: The Inside Story of How the World’s Biggest Companies Survived an Economy on the Brink. Together they recall the unforeseen moment when our economy simply stopped in March of 2020. Anthony opens up about his own experiences at SkyBridge and they reflect on the business leaders that did well, those that didn’t – and where we go from here. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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free of charge. BetMGM operates pursuant to an operating agreement with Eye Gaming Ontario. I'm Anthony Scaramucci and welcome. to open book, where I talk with some of the most interesting and brilliant minds in our world today. In this show, I'll bring on guests in business, politics, entertainment, and more to go deep into a piece of their work, whether it's a highly anticipated book, an in-depth feature story, or an opinion piece that has captured my attention. We'll dig into why it matters to you and how their work is shaping our future. COVID-19 was tough. It was a huge step into the unknown for all of us,

As a business leader, I can tell you, man, it's probably been the most difficult three years of my life beginning in March of 2020. My firm that I run Skybridge had the worst year. Let me repeat that. It had the worst year in the month of March 2020. And so obviously we're rebuilding from there. And the whole thing happened so quickly and so abruptly. And I just want to take people back to 2019 where we had these expectations of low inflation. and decent unemployment figures and reasonably strong economic growth, completely wrecked by COVID-19.

And of course, we're dealing now with the aftermath of that, too much money into the system by the Fed, too much inflation now, rising interest rates. And here comes Liz Hoffman with her fantastic new book, Crash Landing. Crash Landing digs into the inside story. It explores what it took to steer a company and the economy, for that matter, through the pandemic. It's a wonderful guidebook for people in terms of dealing with and managing through a crisis with lots of unknowns. One thing COVID-19 did to everybody, which is evident in this book, is that it caught us all off guard.

Well, how did some of the smartest and best minds in the world deal with that? Liz gets into that. It's a phenomenal book. We'll be addressing those things with her today. Joining me now on Open Book is Liz Hoffman. She's the business and finance editor at Semaphore. a former reporter at the Wall Street Journal, and she's got a bestseller here. The title of the book is Crash Landing, The Inside Story of how the World's Biggest Company survived an economy on the

brink. I said to Liz, I was up all night reading this book, and it was a bit of therapy for me, okay, because I've been getting destroyed since the COVID-19 started, lots of decisions that we made went in the wrong direction. And weirdly, I took comfort from the book that there's very smart people out there, Liz, that also were stuck in this crisis and we're trying to survive on the brink. So let's start with the uneasiness of the early 2020. And you talk about a lecture that Bill Ackman gave at the London School of Economics. Interestingly enough, I was speaking at that event as well. It was early 2020. Set the scene for us. So this is mid-February of 2020. If you've been following closely, this thing has been circulating in China for about six weeks.

It had not yet really broken through to the mainstream consciousness, certainly in the West, that was starting to kind of make its march, you know, regionally across countries. And Bill is at this investor talk and he, I'm sorry, at the student talk, and he's asked, what do you think? What do you make of this? And he says, I think this is the biggest black swan out there right now. And actually, as he's answering the question, some kid in the front row like sneezes and Bill winces and freaks out a little bit. And to me, it was a good, a good story about, to your point, just like how little we knew. And, you know, very few people, I think, saw this coming. Bill, to his credit, is one of them.

And he made a big bet coming and going on this thing that we can talk about. But it just, one thing I really wanted to do in writing this book was to remind people how weird it was, right? Because the pandemic became this like groundhogs, it's long funk that kind of wouldn't end. And things that in the beginning, if you remember, were scary and weird. and strangely earnest in a way that I think like we've sort of lost the emotional punch of those early days. And it was important to me as I was setting the scene to look at these decisions that were made to kind of remind people the mindset of the people making the decisions. You also talk about in the early part of the book, the Davos 2020. President Trump gave a interview there with Joe Kernan basically saying everything was okay not to worry about the impending pandemic.

Steve Mnuchin, however, voiced concerns at a dinner. But there was general optimism there. I remember I was there as well. I remember people thinking, economy's growing strong. And by the way, full confession, Skybridge got this wrong. I thought the pandemic was going to be like SARS and Mears. And I thought the economy was going to chug along relatively unaffected. Man, that I get that wrong. But set the scene for us. Manuchin is talking. He's a little worried. Other people are nonchalant about it. So Davos to me and I was there too. We'll go down as one of the most absurd gatherings of human beings in history, right? You have these people who have lines of sight into these multinational companies.

They've got supply chains. They've got employees everywhere. Sometimes they are running. They're directing economies. They're regulators. And you're right. There was this just bubble of optimism. And there's a joke to be made here about Davos Man and how he always gets it wrong.

And I actually wrote a lot about that coming into Davos of 2023. You know, especially that year, Davos was really dominating. by two things, this sort of overwhelming optimism. And a lot of ESG talk. It was a real climate, Davos, and sort of that's what Mnuchin was responding to. He's at this private dinner, orchestrated. I was not there, but orchestrated by the Wall Street Journal hosted. And he's listening to all these CEOs talk about their climate goals. You know, he says, you guys are missing the point, right? You know, even for Mnuchin, who's like, very wealthy guy, like, just the sort of tin-year talk that you hear at Davos, it's very lofty and misses the point. And he says,

first of all, Iran's nuclear program has gotten no airtime here, and we should all be talking about it. But also, there's a city of 11 million people that's on lockdown. And you guys are all blowing it. And it's one of those things that didn't really prick the bubble in the room, though, when I talked to CEOs later who were there, it was something that they remembered in the early days of the pandemic and felt foolish. And that was something about the pandemic, especially in the early days. Everyone constantly felt foolish all the time, making these decisions that were just immediately made obsolete. Well, you know, this, again, doesn't reflect.

well on me, I went to a World Health Organization meeting inside the Congress Center. There were pandemic experts and two WHO officials. Several hedge fund managers were there. I won't name their names because they always get mad at me when I named their names, but we walked out of there and we were told that this was going to be a non-event. Needless to say, myself and those managers in that room, their performance, Liz, and our performance particularly was really bad in the first quarter of 2020. We were not set up for an abrupt stoppage of work, an abrupt, you know, slowdown in the economy and everyone going indoors during a pandemic. You know, I just, for what it's worth, I went back and I watched the video of that.

I wasn't in the room for that one, but I was on like the next superbug. And they spent most of the time talking about the overprescription of antibiotics, right? Yes, sure. Problem. I remember that one as well. So it's interesting, you know. And again, I'm not trying to pee on Davos. I love going there, but in 2007, the world was going to grow forever. Then we had the explosive global

financial crisis. In 2009, the world was going to open up and we were all going to fall into the center of the earth. And then we had the greatest bull market run in history. 2016, Hillary Clinton's going to be the president. Donald Trump wins 2020. And you remember the consensus at 2020 was Donald Trump was going to resoundingly win reelection. Of course, this was also that the pandemic wasn't going to be a big deal. And so we got those things wrong as well. You write about something called the champagne decade where everybody enjoyed these rewards. And then we have this sort of crash landing. I love insights from guys like, you know, Brian Chesky and Jim Hackett. Let's go to some of the experiences you highlight in terms of talking with them. And then I want you to talk a little bit

about Morgan Stanley and James Gorman. Yeah. I mean, taking them sort of one at a time, Airbnb had just such a fascinating pandemic story. They came into 2020. expecting to go public. They're going to take their place in the Silicon Valley Pantheon. And Brian Chesky had spent the holidays of 19 with a big stack of prospectuses, kind of trying to tell Airbnb's story. What do we want this to be? And, you know, the notes he's scribbling to himself, he's a real iPhone note guy, where that 2020 is going to be the year of connection and that Airbnb should be the venue for that, which just always stuck with me as, as I reported the book out and as the year kind of went on. You know, the idea in early March that you would, A, leave you,

your house, B, go to a stranger's house, right? It just sounded insane. And I was actually in the camp of this company's toast. They pulled off a very expensive capital raise in early April. They got about $2 billion from Silver Lake and 6th Street, an incredibly humbling fundraise. Their valuation went from 30-something billion to about 17. And they did one of the things, which is really important, which is they fired people quickly. It's unpleasant, but the rule, we're starting to see it now in tech, which is like cut as deep as you think on the front end, but, but be transparent and be forthcoming about it. But then they started to notice what we all did, which is that people actually did want to travel, but they didn't want to go to a hotel in Vegas for the weekend.

I'm sure they'll be back for salt. Anthony, don't worry. But they wanted to go to the mountains for a month. And so they pivoted incredibly quickly to these long-term stays, got a huge boost from, you know, what a whole kind of resilience of consumer capitalism. People do want to do stuff. And they went public at the end of the year at a valuation of over $100 billion. So just like a crazy pandemic story.

And a good lesson, honestly, like to your point about the champagne decade, like you invested through that. There weren't a lot of like tough calls to make. It didn't pay to be contrarian for a lot of that decade, right? And the, you know, Sixth Street and Silver Lake have just made boatloads of money on Airbnb. And it was like a good reminder that that decade is over. And we're in a position now. We're seeing it with interest rates and all manner of stuff.

We're in the middle of a bank run as we speak. Where like investors get to make calls. They get to have conviction. and either win or lose on that. But that's the world we're in now. No, it's interesting. That decade is over. There's something else happening, though.

There's this undercurrent of technological change through artificial intelligence and possibly the blockchain, although it looks like the U.S. government doesn't like the blockchain. We'll talk a little bit about it. I want to get your opinion of that. But before we go there, I want to stay on the book. March 11th, WHO, they declare a global pandemic. The stocks are tanking and people are terrified. You've got the situation with James Gorman and Morgan Stanley.

He tests positive for COVID. Does he capture the experience that we all experienced? Tell us a little about the World Health Organization and the cross current there with your conversations with Gorman and the Morgan Stanley leadership. You know, Morgan Stanley, James got sick at a time when that was like newsworthy, right? I mean, now presumably we've all basically had this at least once. Right. And the world is obviously very different with vaccines. But it was scary.

And he was really sick. a call actually not to disclose it unless he went into the hospital, which should take you back to just how scary that stuff was. But he called the New York Fed and said, I think you should know that I've got this thing, called his board and said, we need to fine tune the succession plan because I could die. And that just that, it just always sort of stuck with me. And again, like, he didn't die and many other people did. I don't want to like belabor that point. But, you know, you think of all the tail risks that can hit a company in a crisis. But like your CEO catching the deadly plague is not usually on them. So, you know, they also had a hell of a pandemic, right? James has been a serial

acquirer of late, and they had just done this huge deal in February for e-trade, struck actually right at the top of the market. And you would think that might be humbling, but nope, they went back and bought Eaton Vance, a huge asset manager, you know, in the middle of the pandemic and those deals have been home run. So again, these, you know, if you think you are making good decisions, my takeaway from this crisis is make a lot of them, right? Have conviction, you know, move ahead. And if you bat 60, 40, like, you will move your company in the right direction. Yeah, you know, it's interesting. You know, in my experience, we shut the office early, tried to keep everybody.

I mean, we had a little bit of a pay cut that we put in place. And then we made a pivot into crypto, which actually worked in 21, didn't work in 22. But something systematic did change, Liz, I think, and I want to get your reaction to it. I sort of, when I closed your book, I was like, you're capturing the tactical, and the strategic. And you also have a little bit of a macro overlay of what's going on in the economy. I want to test a theory on you. Tell me what you think. But when I closed your book last night, I said to myself, okay, we were on a zero interest rate policy, decent growth, low unemployment, very low inflation, sort of a Goldilocks economy. We abruptly stop everything. And then we really make a series

of miscalculations about how quickly we can put things back together, the supply chain, the transitory nature of inflation versus the secular, systemic nature of inflation. And now it feels like we inducted so much money into the money supply and now we're trying to take all the money out that we didn't sit down and say, okay, what are the permutational outcomes to all of this? And what am I missing? Do we have thoughtful people? And again, I believe they're all well-intentioned, but I'm just wondering, did anybody fully think through everything or was this sort of born from expediency? Let's rush the money into the system. Let's rush the money out of the system. And

Did anybody think, okay, well, if we do that, you're going to cause a banking crisis because all the balance sheets to pass these stress tests are going to have to be in treasuries. But if we do that, all those treasuries are going to go down. And some of those banks don't have the, particularly the regional banks, they don't have the sophistication to hedge out the treasury risk. We want to yell at them now. And we want, you know, our politicians want them to go to zero. But they were really following Fed guidance.

October of 2021, you know, Jerome Powell said, no, no, no, we got this under control. We're not going to have to raise rates. 400 basis points later in 12 months, the largest rate increase in 40 years in terms of the rapidity of it. So what do you say to all that? Do I have it roughly right? Or what do you say? I think you do have it roughly right.

I mean, look, there's always a tradeoff between getting money out quickly and getting it where it needs to go. And I think, you know, the government did in about six or eight weeks in 2020 and then obviously followed it up with a lot of stimulus that I think was pretty clearly went on too long. But, you know, did in about six or eight weeks. it took them six or eight months to do in 2008, what they never did in 1929, you know, 1970, these prior shocks, 2001. And yeah, like, money went with almost certainly too much of it. If you're asking for, like, mistakes. And again, like, I think second guessing people who,

to your point, are smart in a tough position trying to do the right thing, the fiscal stimulus went on too long and was too much. That spiket was open for too long. And you're starting to see, when you saw this huge inflation as people went to spend that down and ran right. right into the buzzsaw of supply chain snarls. And then I think pretty clearly the Fed was too slow to start raising interest rates. Not by a lot. I think they probably should have started in the fall of 21. Instead, they started in the spring of 22. And that probably means, you know, a bunch of those 75 basis point increases could have been 50 and the 50 could have been 25 and we could have settled somewhere better now. The second half of your argument, I've heard it from a lot of people,

right, which is the Fed made us do it, right? This big push for 2008 to keep a bunch of liquid assets. and what could be more liquid than treasuries. I think there's some fairness to that. The other point you made, which is they're not sophisticated enough to hedge it. That's not what happened with Silicon Valley Bank. They knew exactly what they were doing. Hedging it is a cost. And so if your whole thing is we're going to do some risky stuff to make more money,

you're not really inclined to pay money to protect yourself from the risks of it. So, you know, hedging an interest rate book is not complicated stuff. Silicon Valley. I was really more thinking of the smaller banks that are out there. You know, we have a bank out here on Long Island. You know, the guys I talked to there, they're saying, hey, man, we wouldn't really know how to do that. I mean, they're super overcapitalized. But, no, but I hear you. Let me ask you this because I'm dying to ask you this,

because you're actually, you know, a very objective journalist. I enjoy reading your byline. You always come up with great scoops. And you try to do a really good job of sourcing. What do you make of the media during the crash landing experience during the time that you're writing this book? How did the, how would you grade the media? Was there good information? Was there biased information? I mean, I think people are generally confused. Were the vaccine is good? Were they bad?

You know, I can give you my opinion, of course. I'm five times vaccinated, so obviously I believe in them. But, you know, what's your reaction to the whole thing? I think most Americans are confused by the media at this point, in terms of what to believe and what not to believe. But what do you say to that? I would say, I think broadly speaking, the media quitted itself pretty well with a couple of topical exceptions.

this idea that the media is overly dramatizes things that are not dramatic, I think is fairly clearly disproven. You know, the pandemic had been around for six or eight weeks in China, and I did not, as a regular consumer, to spit in the media, there was not a drumbeat of hysteria on that. You know, I think we're talking now, and again, I'm not a health reporter. I'm not a China reporter. But there is clearly like a discussion happening in the U.S. intelligence community now. And some agencies have publicly said there's actually is a chance that this was a lab leak, which, you know, was very clearly and loudly sort of disputed by the media at the time. I don't know. You know, we're in the middle of a slightly different crisis now, which is, you know,

we're in the middle of a could be a real problem in the banking system. And I've actually been pretty impressed with how, you know, the media has handled this, right? It has been very thoughtful about reporting, you know, bank runs are particularly tricky stories to report because they become self-fulfilling. But no, I think in times of crisis, actually, the media sort of rises to the occasion. I'm sure that's the answer you would expect. And you might have some different thoughts. But looking back, I was pretty proud on it. And, you know, writing a book is a different process. But as I kind of re-reported a lot of what was out there at the time, I found that it held up pretty well. Look, I think it's fair. I mean, you've got a lot going on, though, in this book.

We've got the initial response. We have the confusion about what the right response is from different companies. Donald Trump's talking about reopening the sort of economy by Easter, you know, which obviously the pandemic, per se, they can't do. And of course, they don't do. Then you have the New York Stock Exchange, what do you see as the defining moment and perhaps the most absurd things that went on? Stock Exchange is an interesting one, I think, because on one hand, you know, it's such an iconic symbol of American capitalism, right? The trading floor doesn't really need to be there downtown in Manhattan. Certainly the executives there think it adds some value, but like most trading happens digitally. And so if you're going to have this and closing the floor of the New York Stock

Exchange, right, would have just been an incredibly traumatic, like scary thing for a lot of people. But at the same time, it obviously wasn't safe. And so, you know, we started to hear, there's all these phrases. I think our lexicon grew in really interesting ways during the pandemic, things like super spreader, right? Social distance. And essential workers. And, you know, Stacey Cunningham, who was running the stock exchange at the time, you know, they'd had a positive test on the corporate side, if I remember, early in the week of the 16th of March, I think that Tuesday. If you remember, that's also the second circuit breaker, right? Like these markets are freaking out. And the infrastructure. is holding up pretty well, but the people are not, obviously. And she makes a call, though it's a strange one, which is they're going to close, but not for like two more days. Part of it is that they were trying to get through an index rebalancing cycle on Friday, which isn't, you know, sort of complicated. But it was a strange middle ground. And, you know, the question really was, like, are floor workers essential workers? And she decided that they weren't in the testing capacity that you would need to safely keep that floor open, if it could even be done, would have sapped, you know,

resources from where they were needed. It's the part of the book I really love, because you have insight into people's decision-making and the methods, the methodology that you're using to make those decisions. And, you know, you can have OCD in your decision-making and still get the decision wrong. You know, you can overthink it 100 times because you're just so many variables that were outside of our control. You've got emotional responses, economic, medical responses, just the human response to illness. What do you think was the biggest lesson for these companies? He's like when you finished your work, you said, okay, I'm at the Harvard Business School. I'm going to teach young managers about this life experience.

What is the core critical lesson I want to leave them with? One is one that we constantly learn. We're learning it again this week, which is you're never as liquid as you think, right? And, you know, one decision that I zeroed in on, which sounds kind of anodyne in sort of corporate management, but Hilton became the first big blue chip company to pull its bank loans. It's to tap that kind of corporate credit card. And they did it in early March. And the CEO, Chris Neseta had called his general counsel and said, do I need board approval for this?

The GC was like, I don't know. Like, it's never come up. And he said, do it. Just do it anyway. Get the money. And if we have to pay it back, pay little interests, like that's a small price to pay for having what at the time I think was like $2 billion dollars of liquidity. So A, you never like you never have as much cash as you think. And the stuff that you think is cash is not cash.

Right. And so appropriately like balance sheet management liquidity management basic stuff. The other, though, to your point about decision making and man, like you're right, CEOs can. and murder board and strategy a decision to absolute death, you know, about where to buy post it's from. And I think one lesson coming out of the pandemic was like, most of your decisions are actually right. And if you do them quickly, the world's not going to, you know, come crashing down on your head. So yeah, I think some of that should stick around. Like, not to say that you should be leading these companies on gut and you should obviously like the prudent sort of risk management,

but there are things that can be done and the faster you do them, things that have to be done and the faster you do them, the better. Well, I really enjoyed the book. I have one last question, then I have my five words that I put every author through. So the black death in the 300s, 50 years later, the workers in England are earning double. 1918, Spanish flu pandemic was the precursor for the roaring 20s. Obviously, a lot of pent up demand, which cycled into the 20s. What do you think happens here? Do you think that we have a boom coming out of this thing? Do you think we are stuck in this push-pull cycle of monetary policy? What's your opinion? I think it's going to be really bumpy for a while because to your point A, just like markets move a lot faster, right? And you have this

momentum style investing, which means that the band snaps back and forth and back and forth in pretty violent ways. You know, but also, you know, the other side of that is in 2008, which response was certainly the best we'd seen to date, but I think, you know, fell short in a bunch of ways. Instead of that violent swing, you had like a couple of years of just like economic funk out of which, right, came, came this very steady but fairly undramatic decade. You know, one thing I think to watch right now is the tug of war, the pendulum between labor and management, because it's getting really interesting. You're starting to see green shoots on the organized labor front. I mean, obviously will not come close to replacing the clout and the jobs that have been lost in that sector in the last 50 years. You're starting to see organizing efforts, right? And especially for lower paid workers who took a lot of personal risk during the pandemic.

At the same time, you've got this white-collar tug of war between CEOs who want butts and seats and workers who, you know, look, I'm one of them, but who really like the flexibility that they got during the pandemic. And I think there's been a little bit of professional self-indulgence that will get shaken out in certain sectors like tech now. They thought they were untouchable. Now they're being fired. So I think that's where to watch because it's both an interesting kind of business culture story, but also goes right to the heart of wages, which is like how we are fundamentally going to get out of this mess, which is, you know, interest rates and monetary policy. But basically people have to stop having as much. money to spend for inflation to come down. Yeah. No, 100%. Okay, ready? I'm going to say five words, and I want to get your reaction. Goldman Sachs. A storied and an important institution that is trying to figure out what it wants to be when it grows up and it's having a hard time doing that.

I covered them for a long time and they did this one thing really, really, really well. And then after 2008, that just the math didn't quite math there anymore. And they did a little strategy by envy, which usually goes badly. They looked at the commercial banks and said, well, they traded that higher. Morgan Stanley. They looked at James and doing it, Morgan Stanley. They got obsessed with, like, wealth management and retail, and that's not in their DNA. And they are having to unwind that right now.

And it's, yeah, it's actually fairly messy over there. I've covered them a long time, but I've never seen, like, this level of angst inside that place. Yeah. Yeah, listen, I work seven years there. I love the place. I wish them well. Jerome Powell. Hmm.

A smart guy. with a tough job. You know, I think in the end, history will judge him really well. But, yes, it's a very tough job right now, right? I mean, you see decent inflation numbers last week, which might give him the cover that he sort of badly kind of wants right now to ease up because, you know, the faster and the further they increase rates, they're just going to have one of these problem banks after another. So, you know, you're the investor here, but I think most of the market has turned more doveish, you know, expecting a slower and ultimately lower rate of interest rate hikes.

American Airlines. Hmm. You know, they had a tough pandemic. They came in incredibly over-leveraged, the sort of weakest of the big guys, kind of a little bit of a basket case. There was this interesting dynamic in the airlines I write about in the book, which is early on, they all needed money, right? No industry, much less one that's that capital intensive and involves flying big hunks and metal around. They're effectively a national resource, can survive revenue going to zero. But as the longer it went on, you started to see this divergence in that cooperating.

that United Front started to fray. And America was in a very tough spot. And, you know, I have a story laid in the book where Doug Parker, the CEO, had made a promise to all those furlored workers to get them a paycheck by Christmas. And if you remember, Congress had passed the second round of CARES Act stimulus, which involved extending the aid to the airlines. But Trump wouldn't sign it or wasn't clear whether he would sign it. He had lost the election. He was in Florida. He was, you know, file accounts in my reporting was in a pretty bad mood. He says, I don't know. And Doug Parker steps out of a meeting and calls Steve Mnuchin and said, what do you think? Like, I need to push a button to send billions of dollars out that we don't have. And, you know, Mnuchin, that's market moving information. And he kind of gives him very, he gives him nothing. But Doug walks back in and says, screw it. Like, we made a promise and we'll pay for it later.

And ultimately, you know, it got passed. But I don't know. I think there's some, I think there's some lessons to be taken there, which is like, when in doubt do the right thing. Two more already. Bill Ackman. He called the pandemic coming and going. And I have not talked to anyone else who did that, right?

He had this. He noticed something in February of 2020, which is that spreads were too tight, that risk was not being properly assessed. And he put on a big, effectively bond trade, made a ton of money. And then on the back end, he looked at what was happening on the supply and demand side and said there's going to be massive inflation. And he put this trade on, you know, in early 2021. So like way before the Fed was talking about it. It was on a hot street. Made a ton of money.

I will note, though, too, that when he went to be in. back to doing what investors like usually think he does, which is single stock investments. He lost a ton of money on Netflix. So a little bit of a strange story. We get a lot, we get a lot wrong. We get a lot right. That's what happens in this industry. Donald Trump. Oh, I'm going to pass. I'm just, I'm not a politics reporter. You worked for him. And we're all kind of waiting to see what he does in 2024. I was more or less in the context of what you wrote about in the book. It seemed like people were the, the, I think there was a lot of decision-making that was happening at the corporate level. They also were thinking about the White House

while they were making those decisions, right? Let me ask it a different way. What impact they think he had on corporate decision-making? How's that? A lot, but it kind of an interesting way. There was this huge vacuum of public sector leadership early in the pandemic. Clearly, the president was not taking it seriously, but also, you know, the CDC was putting up very confusing guidance. I mean, if you're looking to your government to feel better, it didn't work here. And CEOs stepped into that void. I think in part for very admirable reasons, in part ego, right, CEOs are always kind of living like a lifetime movie in their heads and they're the hero and they stepped in. And I think really did a good job. And if you remember, it wasn't just the pandemic. It was the sort of racial

justice reckoning that summer, you know, bled into these broader kind of culture wars. And I think now CEOs kind of find themselves on this slippery slope where they're spending a lot of their time having fights that have nothing to do with their business. And I think it's a pretty, pretty direct line. Well said. You wrote an amazing book. I really enjoyed it. And thank you for writing it. I hope that it gets picked up by university professors. It's a great treatise on what people do in a crisis. It's called Crash Landing, The Inside Story of How the World's Biggest Companies Survived an Economy on the Brink. And so thank you for joining us on Open Book. Thanks for having me, Anthony.

Well, Liz wrote an amazing book and I recommend people picking it up. I think the biggest lessons that I took from the pandemic is to save money. So let me repeat that. You have to save money. You have to reduce your expectations in life and always have a war chest set aside for when things that you think are impossible to happen actually do happen. I think that was true for the businesses large and small. The best business leaders came out of this well positioned if they had rainy day funds in their businesses. I think that was ultimately the lesson from Liz's book. Liz said we've still got some turbulence to come. And I agree with her. The great news for the overall economy is that there's massive amounts of technology coming,

biotechnology coming that's going to make our world more abundant, more prosperous, and is going to actually reduce prices in the future. The bad news, though, is that we're still dealing with this tsunami, this sort of waterwall of money that was put into the economy by the Federal Reserve and other central banks. They're trying to drain that right now, but they're having some difficulties draining that because of the banking crisis and because people were just not prepared for the stop and start mechanisms that the Federal Reserve has been deploying during the pandemic. So we've probably got another 18 to 24 months of economic turmoil to go. But the very good news is on the other side of this, I think the super bright opportunities ahead. But the bottom line is pick up a copy of Liz's book, Crash Landing, and ask yourself to question.

questions as she's asking business executives, do you have the metal, do you have the stomach to deal with a crisis and lots of uncertainty? Today I spoke with Liz Hoffman, who wrote another great book about how companies survived COVID-19. So let's go to the coronavirus. What's your first memory of hearing about the coronavirus? When do you think? Well, one of my very good friends died from it Because she was on the ventilator and the ventilator was breathing for her. And when they took her off the ventilator, the fourth thing who was very, very wonderful, died by herself because she had the coronavirus and they weren't equipped properly. Right. And they wouldn't let her family members into the hospital, right?

So this was March of 2020. He had a close friend die. I remember that. Okay. What do you think happened, Ma? Like, when you think about the coronavirus, was that human? made was that a lab leak uh i think that the i shouldn't say the country but i think that the country wants to be first in line in my opinion we are first in line still even if we're disprovinated

for a while we're still number one the other country without saying the name would like us to diminish and they would be number one and i think they sentence the coronavirus i don't know not a doctor but i think it's in the food and stuff and the way they cured their food all right so let me ask you this okay what changed the most in your life during the pandemic? Some of my very good friends, I mean, my very good friends passed away. That changed some of my life. They were confidants for me and I was confidence for them. Right.

So you had some of your friends who had comorbidities, they got sick with the coronavirus. They didn't have the right therapies at the time. People didn't really know, right? When you had the coronavirus, she gave you the antibodies. My granddaughter is an RN in Mount Sinai. And she said that the things that were really killing up, you know, making them die was if they came off the ventilator, they couldn't breathe. The ventilator was breathing for them. So most of the people that were on it didn't have a chance.

Right. So they lost basically the ability, the lung capacity. The ventilator, they put them on, the ventilator to protect them. But a lot of people, when they came off the ventilator, they didn't have the right muscles. They didn't have the right breathing. Exactly. Their breathing capabilities atrophied from. being on the ventilator and then their lungs collapsed.

Okay, so. And my brother was a perfect example. He was very savvy and very strong and he had the virus. And I and my heart believed that that was part of the reason why he passed away because they had a blood clot. He was forming blood clots after the, yes, he was 94 and he formed a few blood clots after he got COVID-19. And so there is some speculation that the blood clot that killed him could have probably

came from the virus. Because he wrote a motorcycle two days before he died. He was very savvy, very strong, and he was like very with it. And for him to just, when he had a beautiful death, he died in 20 minutes and I was with him. Okay, yeah, we want to go quickly, right? You don't want to go lingering. I agree with you on that. Absolutely. I have leukemia and I would like to go like him someday. All right, Ma. Well, we're going to have you around for a while longer, so just take it easy on me. So it was a scary time for everybody, though, no? Were you scared by the whole thing? Not for myself as much as I was for my children and their children.

I was scared that none of my family members would get it. My nephew's nieces, I'm very family-oriented, and I was very afraid that my children or their children or their spouses or whoever would get it, and it would have been a catastrophe. And thank God they all missed it, knock on wood. Are you afraid to die, ma, or you're not afraid to die, ma, or you're not afraid to die. I'm not afraid to die.

I have two wonderful brothers and a mother and father at the grave site in Fort Washington, and I'm going to go there, and I feel like the family will be complete. I'm the only one left in my immediate siblings and mother and father. My mother died young, and I'm not afraid to die. No, absolutely not. Well, you taught us all that, right? You've got to be, if you're not afraid to die, then you're not afraid to live, right, ma? Well, I had an American father and an immigrant mother, and my mother died fairly young,

and she used to tell us in her language, do good and forget it, do bad and remember it, because when the world turns, you've got to pay for the bed. And I grew up that way. I really believed that. When I was a kid, what goes around comes around, she was very big. Yeah, but it's a different way of saying it in the Italian language. You know, it's really very true, though, because I'm 86 years old. and I have seen people that have been very big,

and I've seen them disintegrate fully, because I shouldn't say this, but I don't think even God wants them, but God did forgive the Apostles, so maybe they'll forgive them. I don't know, but I would never forgive someone that was really bad. Right, because you're Italian, you like holding grudges, but I know that about you. You know, you can't help yourself. You like holding grudges.

All right, Ma, I love you. I am Anthony Scaramucci, and that was open book. Thank you for listening. If you like what you hear, tell your friends and make sure you hit follow or subscribe wherever you listen to your podcast. While you're there, please leave us a rating or review. If you want to connect with me or chat more about the discussions, it's at Scaramucci on Twitter or Instagram. You can also text me at plus 1, 917, 909, 2996. I'd love to hear from you.

I'll see you back here next week.