Carlyle Group co-founder David Rubenstein on Washington power shift and U.S. economy
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Restrictions apply. See terms at sportsbook.fanduel.com. Gambling problem? Call 1-800-GAMBLER. You're listening to a podcast from Washington Post Live, bringing the newsroom to you live. So, ladies and gentlemen, I'm David Ignatius, a columnist for The Washington Post. This is David Rubenstein, the co-founder, co-chairman of Carlisle Group, one of the pillars of private equity.

recent recipient of the Presidential Medal of Freedom, non-recipient of a presidential pardon. I don't think we need to worry about that. It's all right, isn't it? I didn't get one. So let's have a seat. Okay. So, David. Okay. Thank you for joining us here at our Washington Post hub, which we're calling DC to Davos.

And David, you and I have been in the world of Washington for a long time. We're habituated to change. We've seen so many administrations come and go. I have to say, yesterday felt different to me. I can't remember an inaugural address quite like that.

I can't remember a flurry of executive orders, anything remotely like that. You're, in addition to being a prominent business person, now an historian, I want to say in some ways a journalist. But I'd be very interested in your take on what you saw yesterday and where we're going now as a country. Well, it's very unusual.

Donald Trump, to put it in context, when he was first elected, he didn't really expect to be elected, honestly, in my view. He, I think, was planning to take a vacation after the election because he didn't think he was going to win. Then he won. And all of a sudden he had to govern. And the person who was in charge of the transition, the governor of New Jersey, was pushed out. So they had to begin a whole new transition.

And then he began to say, I've got to run this whole government. He was the first person in our country's history to be president of the United States without having ever been in government before. And so he took advice from people that had actually been around before, and he took prominent people, Jim Mattis, a very famous general, Rex Tillerson, famous CEO, and a lot of people in the administration were people he didn't really know, but they were well-respected.

And then he ran into problems. And he found the people weren't as loyal as he wanted and so forth, and everybody knows what happened. He then went in a situation where the only analogy I can think of that's close to what he went through is when Napoleon was kicked out of France, he was sent initially to Elba, and people thought you'd never hear from him again. And he escaped from Elba and came back to run France again.

Well, Mar-a-Lago was not unlike Elba. He went down there and nobody ever thought he'd be president again. Remember, after January 6th of 2021, he was thought to have instigated that by some people. And then he had subsequent indictments, New York City indictments, New York State indictments. And then the world turned around. He now is in a situation where he's the most powerful president we've had, certainly since FDR.

Now, there have been other presidents who have had bigger majorities, for sure. He didn't even have a majority. He had a large plurality. Richard Nixon won 49 states. Ronald Reagan won 49 states in their second terms. But they didn't have lockstep support on Capitol Hill among their party the way I think Donald Trump does. Donald Trump controls the House, effectively. It's narrow. The Senate. And he's the only president we ever had who became president when he'd already appointed three people to the Supreme Court.

And, you know, so he's got a lot of slay in that. He's appointed a lot of federal judges, too. So it's a unique situation. I think it could last for four years. It could last for two years. Two years only because the average president loses 25 seats after the first midterm. That'd be two years from now.

Bill Clinton lost 54 seats, Barack Obama lost 62 seats. So if the normal pattern of 25 seats were to occur, the House would go Democratic, he wouldn't be able to get everything he wanted. But for the foreseeable future, I think he's got a large following in the Congress and the public, and I think he can get a lot done. The executive orders, other presidents have done executive orders, of course, not quite as many as that and maybe not as extensive.

But he had four years to think about the executive orders he wanted to do, and he issued a lot of them yesterday. The inaugural address, you know, I think...

Lincoln's second inaugural address will probably not lose its place as maybe the best inaugural address in history. John Kennedy's inaugural address probably won't lose its place as one of the best pieces of rhetoric I've ever seen or oratory. It was more of a campaign speech, I would say, than it was an inaugural address.

But, you know, if you had to know and he was giving that address, you would think it could be a campaign rally almost. But anyway. So, David, let me just challenge you on this picture that

He's got smooth sailing probably for two years. Thinking about Napoleon's return, the hundred days, you know, this tempestuous, stormy period. But these executive orders are going to be controversial. The attempt to deport large numbers of people is going to be more than controversial. It's going to be chaotic.

And I'm just curious about your sense, first, of the level of legal and other difficulty and chaos in the streets that's going to accompany these moves. And secondly, what the reaction of financial markets in the United States and around the world might be if we get into a very stormy period, which I think actually is possible given the breadth of what he's trying to do in this initial period.

Well, it's a complicated question. There are many different aspects to it. The financial markets, by and large, have been fairly ebullient with his election. They feel there'll be less regulation, less antitrust interference with the deals they want to do, more openness towards IPOs. Cryptocurrency will be tolerated more than it was under Joe Biden. So I think the financial markets are one thing. I think they're probably not going to be that sympathetic to the people that are opposed to Trump.

Now, there are Democrats still in Washington, right? And there are plenty of Democrats around the country. But I think that they're going to go into court, and there are already some of these executive orders that are being challenged in court. And we'll see what happens. But I think Donald Trump's got a pretty good mandate to do a lot of what he wants to do. And not everything. I mean, I don't think he campaigned on getting the Panama Canal back. I worked in the White House with Jimmy Carter when we gave the Panama Canal back. So I'm familiar with the Panama Canal. You should have gotten that pardoned.

I'm telling you. Yes. But, look, a couple, two points I'd like everybody to think about. We've never had a, except for once before, a second-term president who wasn't consecutive. So Grover Cleveland was the only other person. He did it in 1892 when he came back and beat Benjamin Harrison.

When you're a second term consecutively, sometimes it doesn't work out so well because you get tired and you make mistakes and your people are worn out a bit. Richard Nixon, people thought he had a great mandate, left office. Ronald Reagan almost left office because of Ryan Contra. Bill Clinton had his problems with Monica Lewinsky and the impeachment and so forth. It may be the case that if you have a second term when you're out of office –

For a while, you think about all the things you want to do. You get the people you want, and then you're fresh yourself. You might be able to be more energetic yourself in getting things done. I think he's fairly energetic for his age. Now, you know, people say to me, why don't I run for president? I'm 75. It's too young. You've got to be 80. You've got to be much – I've got to get more experience. But, no, Donald Trump is the oldest person ever inaugurated president of the United States. I remember when I was working for Carter, we thought –

I remember telling Jimmy Carter, you have no chance of losing against Ronald Reagan. He's such an old guy. He's 69 years old. He can't get out of bed in the morning. Now 69 seems like a teenager to me. But that was 69. Now Donald Trump will be 79 this year. 79.

So, you know, will he have the energy to do all this? I don't see any evidence that he's falling apart mentally or physically. You know, he's a 79-year-old man, or he's 78 now. So, you know, 78-year-old people, 79-year-old people can't do miraculous things, but I don't see any evidence that he's physically or mentally slipping as much as people might, who are his opponents, think or hope. And I think he's also more secure physically.

I've talked to him and I've spent time with him. I think the first time around he was, in my view, more insecure about his knowledge of the federal government. That's why I picked people who knew the government. I think he's fairly secure now because he knows the government, he knows what he wants to do, and he's going to move forward. And some of the campaign promises that he said he was going to honor

He honored them yesterday and that shocked people. You know, what kind of politician is this who honors his promises? We don't like that kind of thing in Washington. We like presidents who say things in the campaign and then they don't do it. That's what they think is normal. He actually said he was going to pardon all these people. You know, he did. It wouldn't be something I would have done, but he said he was going to do it and he did it. And he shocked people by doing it. So I think he's fairly secure in his position. I wouldn't think that he's going to depart from a lot of things he said in the campaign.

So I certainly agree with you that he is more effective at using power than any president we've had in a while. I would look back to LBJ as somebody who was ruthless, fired people if he was angry at them, insisted on loyalty. There are moments when he reminds me of the way LBJ governed.

I want to ask you about the specifics of his economic policies since that's your first métier. Now we really think of you as a baseball team owner if you're from the Washington area. So...

What are the pieces of this? The president talked in his speech yesterday about tariffs, not with great specificity, but talked about his external revenue service, implying enormous revenues from tariffs. He has said, I believe yesterday, that he does intend to tariff Canada and Mexico at a fairly steep rate.

Any of us who remember our economics class remembers the first rule of traditional economics is beware tariff wars. Remember the Smoot-Hawley tariffs. Remember all the difficulties that flow from tariffs. Then we have a pledge for significant tax cuts coinciding with a promise to increase defense spending, likely increases taxes.

in other spending. Certainly it's going to cost a lot to deal with border issues. How does all that fit together? And again, what's the tolerance of our financial markets for what look to me like significant deficit-widening policies and tariff policies that

that if nothing else are going to produce a degree of chaos in some aspects of trade. All right. So I'm not a defender of Donald Trump. I know him. I'll just give you my explanation of what I think he's doing and how he thinks because I've talked to him and other people work with him on tariffs. He likes tariffs because you can do it yourself. You don't have to go to Congress. You can just say, I'm going to tariff.

But his secretary of treasury has said that the tariff policy is what he called a maximalist policy, which is to say it's a negotiating policy. We're going to say we're going to put a big tariff on you, come to the table, maybe we won't.

And Donald Trump is, if anything, a transaction person. He does transactions. He's not a big philosophical person. He's not an ideological person on Dooley. He's a transaction person. So if he wants to get something from Canada, say, "I'm going to do this to you. Maybe you can do something that I like better. Maybe I won't do this to you." So I think there's a lot of that going on with tariffs. On the deficits and debt, when I left the government of the United States in 1981, the total debt of the United States was $880 billion.

Today it's roughly $36 trillion. And it went up under Democrats and Republicans. Barack Obama probably had the most in his eight years. I think it went up about $9 or $10 trillion. Donald Trump in four years probably went up about $6 or $7 trillion, somewhat similar with Joe Biden. I have been saying for years, I'm not the only one, that at some point you've got to pay the price. And there's an old saying in economics, if something can't keep going on forever, it won't.

But that's been wrong because we have these deficits and we have this debt and people all around the world still buy our treasury bills. We don't have a sovereign wealth fund but we have the only reserve currency in the world. So people keep buying these dollars because it's the only way to deploy large sums of money and be sure you get your money back more or less. So I've been saying something should give but nobody seems to care about it. So I don't think the debt and the deficit is going to scare people as much as you and I might think it should.

And I don't think they're that worried about it. Now, he would say, I got the DOGE. I got the greatest businessman in the world going to be cutting costs. But as you know, the truth is, in the federal budget, which is roughly $8 trillion a year, 85% of it is interest, defense,

and four entitlement programs: Medicare, Medicaid, Social Security, and Veterans Affairs. That's it. That's 85% of the budget. 85-86%. There's no room to cut on the other stuff. You can cut the National Endowment for the Arts, you can cut the National Endowment for the Humanities. There's no revenue there. The revenue is in the other things. And the only way you can solve that problem, you can't get rid of the interest for a while because you already borrowed that money. And defense spending, we're not likely to cut defense spending.

You can deal with entitlements, but the only way you can deal with it is by saying if you can retire at 68, now I'm going to say you retire at 69, and not for you, but for somebody who's 50. That was proposed under Barack Obama. Barack Obama had a commission called the Bo Simpson Commission. He appointed to kind of deal with these issues and deal with the debt and deficit. And they made these kind of changes. We should, let's say, increase Social Security payments and maybe reduce benefits a bit and push them out.

Barack Obama appointed the commission, Simpson-Bowles. He wouldn't even meet with them. He wouldn't meet with them physically because being seen in a picture so scared him politically, he wouldn't even meet with them. So it's not easy to deal with these entitlement issues. So I don't think Donald Trump is going to be able to easily do them. I don't think Elon Musk is going to be able to cut spending here the way he did in government. Remember, every dollar in the federal budget has some

Buddy on Capitol Hill who loves that program, and they're going to fight for it. So debt and deficit, I think, are going to keep going. On the tax cuts, he's committed to the tax cuts. That's sine qua non. That's going to happen. And the real issues on tax cuts is where you can –

against them what they call in Washington pay-fors. How can you pay for it? So what you do is you can increase taxes on some things. So the favorite one right now, people here probably don't care much about, but in the United States, we don't tax nonprofits. And the universities have gigantic endowments. The universities are thought to be too liberal and too woke. So a couple years ago, in the first Donald Trump tax bill, they had a 1.4% increase

tax on the profits of endowments, college endowments. Now they're talking about having a 40%, 40% tax on college endowments, which will have the effect of reducing scholarships and other things. But that's the kind of thing that people are talking about. These pay-fors are ones that, you know, his constituency probably isn't that affected by or doesn't worry about as much.

We'll see. You know, it's going to be a mess. You know, watching tax policy be made in Washington is a mess. It's done behind closed doors. And I don't think anybody knows how it's going to happen on the debt limit. We have a problem with the debt. We're going to reach the debt limit. Who knows exactly? Could be February, could be March, but sometime in the foreseeable future. Joe Biden didn't deal with it in the end because it was taken out of the compromise bill.

Donald Trump's position is we get rid of the debt limit, which would be a good idea because we're the only country other than Denmark that has a debt limit. We've had it since 1917. We've increased it more than 100 times. So it doesn't really mean anything. We just increase it and we have to increase it. Probably they'll get rid of it, but that won't really stall our debt increase. I don't have a good answer for it. I just hope that we can remain the only reserve currency in the world because that's what enables us to keep doing all this. So I think the quote was from Herb Stein.

who said, if something is unsustainable, that means it can't be sustained. And that does come to mind. Just briefly... He was the head of the Council of Economic Advisors. At what point does this crack? I mean, you talk about this as this spectacularly growing deficit. The interest burden as a part of our annual budget is stunning. Right.

Something that's unsustainable can't be sustained. When and how does it crack?

Well, you know, the people in Washington, D.C. say, look, if it was a big trial and the bond markets would collapse, and the people in New York say, these guys in Washington, they must know what they're doing. They're passing these bills. So they're each pointing fingers at the other people. It's like when I worked on Capitol Hill as a young man, we had passed legislation, and we didn't really know what the impact of it was. We'd say there's people downtown. They're the administrators. They'll figure it out. When I went to work at the White House, we would make proposals, and we'd say, look, it's complicated. We don't have to worry about it.

the people on Capitol Hill will figure it out. And it's the same thing. You always think somebody else is going to figure it out and make it work better. I think the people on Wall Street are going to keep selling debt and buying debt as long as the economy doesn't collapse. Now, in terms of the economy collapsing, right now I think the economy is in actually reasonably good shape. Interest rates are tolerable, and they'll probably come down a little bit. Unemployment is very low, and that's pretty good. Economic growth for the U.S. will probably be

2.7%, 2.8%, something like that. But we haven't had a recession in a while. We had a technical recession around COVID, but a real recession, we usually have them every seven years. And we haven't had one in more than seven years. So at some point in Donald Trump's term, it's not impossible that a war breaks out,

An existing war gets worse. Something we didn't anticipate happens. Bird flu is another thing that people are now worried about. The U.S. government just put out a big contract today for bird flu vaccines because people are worried that could...

produce another kind of pandemic. So something bad could happen, but if nothing bad happens that we can't anticipate, right now I think we'll just keep pushing it down the road, kicking the can down the road. And I think it probably, I don't know when it will end, but at some point it will. But right now I can't tell you what the thing is that's going to come along and end it.

So you, as you mentioned, David, you worked for Jimmy Carter, a president who did a lot on deregulation, did a lot on trying to make government work more efficiently. So

Given that experience, I want to ask you, suppose Elon Musk called you on your cell phone as you're leaving this meeting and he said, you know, David, I want you to come to work as the deputy head of DOGE, Deputy DOGE. And I want to know right now, as Deputy DOGE, what's your first recommendation is for us about how to actually make this damn government more efficient? And you can give two or three if you want.

Well, there are some things you could do, for example. Right now, after World War II, or 1950s, the United States had roughly 2 million civilian employees, 2 million civilian employees, with about a population of maybe 200 and

people, 200 million people. Now we have a population of 330 million people and we have 2 million civilian employees. How can 2 million civilian employees service these 330 million? Because we outsource it. We have 2 million people that are contractors doing what the federal government people would

would otherwise do. So maybe we could, you know, not have as much outsourcing. That would maybe save some money. What Donald Trump is talking about doing probably won't save money in the sense that they're saying everybody comes back to work five days a week. The problem with that is, among other things, we don't have all the office space for them anymore because they downsized some of the offices so they don't have as much office space as they have. But presumably getting some people to come back to work or making them come back to work might downsize the workforce a bit because, you

you know, people will quit. I think defense spending has to be looked at because it's never really looked at because it's something you're not allowed to touch. But the defense spending, you've got a $900 billion budget. Probably there's some fat there. But all of that isn't going to add up to a trillion dollars a year. As you remember, Elon Musk said,

I'm going to cut $2 trillion out of an $8 trillion budget. Now he said, well, I think $1 trillion is maybe more realistic. Sunni may be saying $100 million may be more realistic. I don't know. But if he asked me to serve, I'd say, I served my government once, my country for four years. I got inflation to 19%. You don't want me.

So one of the, to me, really memorable aspects of yesterday's inauguration was looking at Trump and Vance and all the members of his administration and the many prominent tech people, most notably Elon Musk, but obviously others, and Trump announcing that this is the beginning of a new golden age. Right. And...

I'd be interested in your kind of putting on your historian hat. There are ways in which it looks like a new Gilded Age, in which, you know, President Biden said these are oligarchs, a term we associate with Russia, but it's unusual to have...

I would say the best and the brightest from our tech world in such close unity with an incoming president. So what do you make of that? Why did that happen? Does that make you optimistic about what's ahead? Well, what happened was this. Donald Trump is a person who's known for retribution and remembering people that maybe did things he didn't like.

And so that lesson was put in the brain of some of the wealthiest people in the United States who have big contracts with the federal government, among other things. And so a lot of them, when Donald Trump started running for president again this time, two-plus years ago, a lot of the business committees said, who can we support? We don't want to support him, even his biggest supporters. They were privately looking for other candidates. And they just didn't think he had a chance, and they didn't think he was the right guy.

When he became clear that he was going to be the nominee, a lot of them basically came on board. And when it became clear he was going to be president, they all jumped on board. And, you know, business people, you know, they're interested in helping their company, and they thought that getting something done, getting on the right side of the president of the United States is going to help your company. So what you saw yesterday was something you've never seen before. I've never seen it in any president, where the top people right behind the president and his family were Elon Musk,

The head of Google was there. Mark Zuckerberg was there. Jeff Bezos was there with his girlfriend. And, you know, they were so visible, you kind of say, geez, I mean, it's amazing. Where were the finance people? How come we weren't invited? Where were the private equity people? How come we weren't invited? Because the tech people are the dominant people in the U.S. economy now. These companies are so gigantic, they dominate the world. They don't dominate the U.S. economy, they dominate the world.

So these companies are so powerful that they may have as much power as the U.S. government in many ways. So they're the real rock stars of this age, and they're the ones people want to hear about, and they have the amount of money to do almost anything they want. Interestingly, the guy who has the biggest market cap didn't show up.

The man who runs Nvidia, he was in Taiwan doing something business. He didn't want to show up. And I don't think the Microsoft people were there. I didn't see them either. But they may have been somewhere in the crowd. There were a lot of people there. But it is unusual, and I think these guys want to get favorable treatment from the federal government. That's all you can say.

You can say. So I've been shown the sign that says five minutes, which means we can stretch it at least ten minutes. But so I want to do what...

We call in the moderation game a lightning round. David knows this because he's now, I think, really unfairly kind of horning in on the work that poor people like me do, moderating events. But I'd love to ask you for three assessments. So first, I'd love to hear your assessment of Joe Biden.

Joe Biden I've known for a long time because he was the first senator to endorse Jimmy Carter, for whom I was working.

So, I've known him for 40 plus years and it's public knowledge that I've lent him my house to use. I'm not there when he used it, but for Thanksgiving, he likes the house I have and he uses it in Nantucket. So, I've known him a long time. I don't really lobby him at business matters or anything like that, but I see him on ceremonial things at the Kennedy Center Honors or something like that.

I think it'll be like Jimmy Carter to some extent. Jimmy Carter won election in 1976, and people thought, okay, here's a peanut farmer who's going to change the world. He doesn't have the bad vices of Nixon and Ford being insiders.

Then he lost in a humiliating loss to Ronald Reagan, 489 to 49. And he kind of went into clinical depression. He couldn't believe how he could go from the top here in four years. Now he was buried the last week or so, and there everybody praised him because he had 44 years to do good things, and people liked what he did. He was a humble man, didn't care about money, wrote all those books, got a Nobel Peace Prize and so forth.

Joe Biden is not going to have 44 years to fix his reputation. He's an 82-year-old man. So I think what he will try to do is what ex-presidents in our country do is they have to go, unfortunately, have to go beg for money to build these libraries, which are not even libraries anymore. So he'll do that. He'll probably put it in, some of it may be in Delaware, some might be in the University of Pennsylvania. And then he'll write a book and he'll do speeches and so forth and so on. I think his image is not going to be great for a while because he lost.

the election or his party lost the election, but people are going to criticize him for not having gotten out earlier, rightly or wrongly. That's a criticism that people are going to make and it's going to take a while for that to turn around. I think he did a lot of great things, the semiconductor bill, the infrastructure bill, a lot of good things in renewable energy, but I think the zeitgeist of the era is to beat up on him. And in hindsight, the biggest mistake he made in hindsight

some people might say, is that he challenged Donald Trump to a debate in June. Now, I don't know what Bright Stafford gave him that idea, but had he not challenged him and said, look, Donald Trump interrupted me when I had debates before. I don't want to debate him again. I'm the president of the United States. I'm just not going to do it. He might have won. Or if he said, I'm going to have a debate in June,

There would have been no time to get a substitute. He could have won, too. You don't know. So that was, in hindsight, the biggest mistake that was made in the campaign. And, you know, probably he'll think about that for a while. But I think his reputation will get better with age. Harry Truman was very unpopular in the left office. Jimmy Carter was unpopular. Their reputations came back. And in time, I think his reputation will be better than it is today. I think you're right, certainly on foreign policy. Let me just ask a quick question.

pointed question. You know him very well. You do lend him your house, for goodness sakes. Did you ever at any point in 2023 approach him or the White House Chief of Staff and say,

You know, I wonder if President Biden is too old to think about another four years. I did not because I stay out of that kind of politics. I don't really get – I don't give money to politicians. The only person in Washington doesn't give any money to politicians. So I just stay out of it. I try to be bipartisan or nonpartisan. I didn't do that. But I would tell you, on a perception, I'd like you to think about, some people will say they're criticizing him for having not been – his staff for not having known or

or told people how that he had aged and so forth. You know, if any of you have aging parents or grandparents, and you see them once every six months or once a year, when you see them, you say, hey, Grandma, you aged a little bit. You might not tell her, but you would think about it. Because, you know, you see the lines that you didn't see six months ago. If you see them every single day,

You don't see the change. It's too incremental for you to pick it up. So I think a lot of his staff people said, okay, he forgets from time to time. Maybe his leg doesn't work as well as he used to because he broke his leg. And I don't think they saw it as being as consequential as it appeared in that debate. And in that debate, that was not done well, he would concede. The staff had him over two overseas trips.

And plus another trip to the West Coast before he did the debate. Maybe if he'd been better rested, he might have done better. My view is he can have some really good days and some days are not as good. But, you know, I was not somebody who would have told him to not run or something like that. And I don't think any of his staff people did. Maybe he's

In hindsight, people think they should have, but who knows? As somebody who did tell him in a newspaper column in September 23, me, not to run, I can tell you it didn't have any effect. Well, his best friends in the Senate, to be honest. Except to infuriate him and his wife. His best friends, some of his best friends in the Senate went and told him the same thing, but didn't have any effect either.

Let's talk about that afterward. So I'm going to skip a question about your assessment of Donald Trump. Well, can I ask you a question? Let me ask you one. You're an expert on the Middle East, among other things, right? Among many things. Do you think the deal would have happened, that now is the Gaza deal, the hostage release deal? If Donald Trump hadn't sent somebody there or hadn't been as adamant about this thing having to be done before he came into office, would the deal have gotten done or not?

I think the main effect was on Netanyahu, and I think it encouraged Netanyahu to move forward. I think the deal was done. It just needed a little body nudge. Sadly, the last couple of days have made me think that the Gaza war is not over.

that this 42-day interlude may not even last 42 days. Okay. So I... All right, on Russia-Ukraine. On Russia-Ukraine. Wait a minute. Wait a minute. You can't... People want to know Russia-Ukraine. Everybody cares about that more than my views. I'll answer Russia-Ukraine, but then I'm going to turn it back to you. So the most interesting thing that Trump said about these negotiations...

was a tweet that talked about, I know Vladimir Putin, the time has come, China will help. China will help was the most interesting part of that. You note that Trump spoke on Friday to Xi Jinping in a conversation that both sides put out elaborately positive comments.

I know from my Chinese contacts that they're very well aware that Donald Trump would like to draw them into a process of negotiation.

And so I think if you're – we had a fascinating conversation. Anyone who was here earlier I think would agree with the president of Poland, who was just tough, roaring about Russian imperialism and the need to stop it. And he's going to talk to Trump and – excuse me – he's going to draw Trump into stopping Russia. So –

I think negotiations are coming. I think China is the key. I'm going to ask you the last question because I'm the moderator. You're in the portfolio allocation business, or used to be. In your global portfolio, I just want you to rank in terms of fundamentals, fundamental strength and weakness, China, Russia, Europe.

the U.S. I mean, what's your sense? Let's talk about just how weak Europe is. Goldman Sachs is estimating European growth this year will be 0.8 percent. Are you that gloomy? And what do you think about China?

Well, Europe is like an emerging market. You've got to have some faith that there's going to be some things happening that you can't see directly. But what happened to Europe was three things really hurt them. The 07-08 crisis really hurt the banks in Europe, and they never really quite recovered, in my view. Secondly, I think that when COVID came, Europe had a deleterious effect on the European economy.

and didn't quite recover as much as the United States did. And then inflation hit Europe just like it did in the United States, and I don't think Europe has recovered from that quite as well either. But the biggest problem Europe has, I mean, it's the greatest place in the world to have a vacation. Everybody wants to live there if you can, spend the summer there. It's great. Great museums, great art, great food, everything.

but you have a common currency, but you have 12 different fiscal policies or 20 different fiscal policies. Plus, when Britain got out of the EU...

That was a serious blow for both Britain and for Europe. And if you talk to anybody in Britain, they know it's a mistake, but they don't want to have another election. And Europe doesn't really want to let them back in so easily. So that's a big problem as well. I think the currency has not turned out to be as strong as people thought it was going to be.

So I think Europe is a nice place to invest if you know what you're doing and you've got really good companies that you're investing in. But without doubt, the greatest place in the world to invest if you're going to allocate money to one part of the world is the United States. We have a pretty good robust growth rate. We have a big entrepreneurial culture. We've got financing systems that help people get their companies public and merge them and so forth. Reasonably stable government, I think. And it's got its challenges for sure.

And we have lots of inequality problems, social mobility problems, and all that. But if you want to go to a place where you think you're going to get your money back, it's not going to be stolen. But you think you've got a pretty good chance of getting a rate of return that's reasonable. And you're going to have good managers managing your money. I think the United States is hands down the best place to invest, no doubt about it. So, folks, such a pleasure to have David here. Really interesting. David, thanks for coming. Thanks a lot. My pleasure. Really appreciate it. Thanks a lot. Appreciate it.

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