David Rubenstein: Tariffs Won’t Push Us Into Recession 3/25/25
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Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod. How to build a happy life. Arthur Brooks hosts a podcast of the same name. Even when things get pretty bitter, it stays pretty peaceful. I'm so grateful that we live in a country like this where most people are not that political. Most people are not watching nine hours of news a day. He ran a think tank. He's now a Harvard professor and an optimist.

about our country's future. - The American people are getting pretty exhausted, and I'm confident that one party or another is pretty soon, in the next five years, gonna put forth somebody that people are gonna be able to get behind.

And the tariff two-step. Carlyle co-founder and chairman David Rubenstein says the economy's rattled, but not off track. Even dealmaking might ramp up again. When the Trump administration was elected, people thought there would be a much easier FTC and Justice Department policy. It hasn't yet come to fruition. It might.

Plus the bracket bets that paid off and the group text that shocked Washington. If you didn't like what Hillary was doing, you wouldn't like this. Correct. War plans on Signal. But who can overhear? Like including Sean Hannity on Biden's plans for re-election or something. It's Tuesday, March 25th. Squawk Pod begins right now. Stand back, you buy in three, two, one. Cue, please.

Good morning, everybody. Welcome to Squawk Box right here on CNBC. We're live from the Nasdaq market site in Times Square. I'm Becky Quick, along with Joe Kernan. Andrew is off today. Yesterday was the best Monday for the S&P 500 since October of 2022. That stat, courtesy of the Carson Group's Ryan Detrick.

If you're watching, Brian Dietrich, if you're watching right now, the S&P 500 over the one week up by about 2.7%. The Nasdaq was the best performer yesterday. It was up pretty substantially, a gain of far better than 2%, and it actually pulled the Nasdaq to just...

with it just outside of correction territory. So the Nasdaq composite is down by just over 9% from its all-time high. The Nasdaq 100 is down by about 9.98% from its all-time high, but pulled all of those markets back up. And so you're talking about far fewer declines. The declines for the Dow just over 5%. The declines for the S&P just over 6%. Trade uncertainty with President Trump, saying he'll be announcing new tariffs on cars, drugs, and other industries.

Soon, but not all new tariffs will be imposed on April 2nd. And not everyone, not every country necessarily. There could be carve-outs. I was so confused by following this yesterday. I have to see the actual details. It sounded like...

The reason the market was up so much then, it almost looked like he said, no, it'll still be on autos. But then I watched the market was up, I don't know, 490. It added to the Dow, added to gains after that. So I don't think he really threw cold water on what the idea was yesterday, that maybe it won't be as onerous. Next Wednesday is the day that the president has been teasing for big tariff announcements. He's dubbed it Liberation Day.

The president also saying some countries may get exemptions, as we just said, from his reciprocal tariffs slated to go into effect next week. Tariffs were a key topic at Trump's cabinet meeting yesterday. -If we have problems like wars or anything else, we need steel, we need pharmaceuticals, we need aluminum, we need a lot of these things.

that we sort of don't make anymore, and yet we're equipped to do it all. So we'll be announcing some of these things in the very near future, not the long future, the very near future. President also hitting Venezuela with so-called secondary tariffs of 25%. That means that any country that buys oil or gas from Venezuela will get taxed when they trade with the U.S. Energy prices moved higher on that announcement a little bit anyway.

The White House says that it is reviewing how the editor-in-chief of the Atlantic magazine was accidentally added to a group text in which people who appeared to be members of the Trump administration talked about plans to launch airstrikes on the Houthi rebels in Yemen.

In that story, The Atlantic's editor in chief, Jeffrey Goldberg, reported about his fears that what he was seeing was actually just a disinformation campaign that he was targeted by after he was added to the group chat earlier this month on an encrypted messaging service called Signal. Goldberg said that he came to believe the text chain was real after the U.S. actually started bombing targets in Yemen on March 15th, at which point he said he exited the text chain.

Asked about the story at a White House event yesterday, President Trump said he didn't know about it. He was hearing about it for the first time, he said, although a source did tell NBC News Trump had read the story as of late last night.

Democrats in Washington called for an investigation into what Senate Minority Leader Chuck Schumer said was a stunning breach of military intelligence. Late yesterday, Defense Secretary Pete Hegseth insisted no one had been texting war plans. How did you learn that a journalist was privy to the targets, the types of weapons used? I've heard I was characterized. Nobody was texting war plans, and that's all I have to say about that.

In a statement, a National Security Council spokesman said, at this time, the message thread that was reported appears to be authentic, and we are reviewing how an inadvertent number was added to the chain.

The threat is a demonstration of the deep and thoughtful policy coordination between senior officials. The ongoing success of the Houthi operation demonstrates that there were no threats to our service members or our national security. But there are a lot of questions on this. First of all, why they were on signal texting about Indians. If you didn't like what Hillary was doing, you wouldn't like this. Correct. It looks kind of amateurish, the way the whole thing happened. I will say that reading the actual text...

No one really looked particularly bad. I thought J.D. Vance looked pretty good. And there was some thoughtful analysis. The strangest thing for me is out of all the gin joints in all the world, that's from Casablanca too, this guy, Jeffrey Goldberg, he is the poster child. He almost uses the Atlantic as his own personal...

platform to slam Trump. They invited him in. I'm just saying who he is. Here's his article from 2020.

Trump, Americans who died in war are losers and suckers. He had one earlier this year. Trump, I need the kind of generals that Hitler had. That's the title of the Atlantic piece. Before the election in 2024, he had an entire article. The first issue of the Atlantic for 2024 focused on the disastrous consequences, catastrophic consequences of a second term.

for Donald Trump, but out of all the guys in the world, it would almost be like the Biden administration leaking something. Wait a minute. There was no journalist that ever actually trust the Biden administration. So I don't have an analogous person to Jeffrey Goldberg in the mainstream media. One thing is to invite a journalist into this. The bigger issue is what are they doing? They didn't invite him. Why was he on the contact list? I met the other Jeffrey. No.

Why was he on either Waltz or Hegs' contact? I think it was Waltz's, I think. Waltz's contact. I mean, that makes me think, what, are you talking to this guy, Waltz? And if you are, why are you...

It almost raises the question of... There will be questions that are asked in Congress. Tulsi Gabbard happens to be going before Congress this week to be answering questions about security around the world. I am sure that this will come up in part of it. But the big issue is this is a commercially available app, Signal. And no matter how secure you may or may not think it is, it's not secure enough for discussing plans for attacking the Houthis in the government bombing plan. I guess it would be like including Sean Hannity on...

on Biden's plans for reelection or something. Yes. I came up with... That was good. That's about it. I think we're going to talk more about this. But using Signal, I mean... Right. And as you mentioned, if you're opposed to Hillary using her own server for what was happening with these things, this has been something that the Republicans have kind of messaged that we're going to be much safer about these things. It's going to raise some questions. ♪

A Berkshire Hathaway employee has claimed Warren Buffett's $1 million grand prize for his NCAA bracket contest that's an internal contest just for Berkshire employees. Buffett had relaxed the rules multiple times since the contest's inception in 2016. This year, the rules were changed so that anyone who picked the winners of at least 30 of the tournament's 32 first-round games would be eligible to win that prize.

Well, it turns out 12 Berkshire employees guessed 31 of the 32 games correctly. The $1 million prize went to the employee who picked 29 games consecutively before a loss. That employee works at aviation training company Flight Safety International, which is a subsidiary of Berkshire. The other 11 employees are each getting $100,000 for making some pretty spectacular picks, too. So, 12 winners.

Would he kill him? $2.1 million to give each of them? $12 million. I think there was only supposed to be one, but to be... But you know what I mean. Even if it's not Berkshire, Warren himself. He's given away all his money. He's not cheap, obviously. Well...

But it's given all to Bill Gates. Who knows what he's going to do with it. Actually, after he passes, the rest of it will go to his children to disperse to philanthropy. But it's all going away. I still think he should have said okay. More than 99%. I think he should have said, I'm doing 12. I think it was pretty cool that he paid out instead of just giving the top one. I know. I was going to ask you, do you want me to be a jerk or do you want me to be just really nice? Oh, you just be you. So you want me to be a jerk.

Okay, I got it. Shares of, I think he could easily have 12. My guess is... Everybody wins 12 here. Everybody did win. He's got $80 billion. $80,000 million. He's got $80,000... Actually, it's more than $100,000. He's got $100,000 million. Yep. Tease will be next. Coming up on Squawk Pod, social media etiquette.

If someone says I have a toupee, I have to answer that. Toupee? Are you kidding? It's beautiful. It is beautiful. If I had that, I could be president of the United States. And what will bring us all together? Happiness expert and writer Arthur Brooks joins us. People in politics and media and other places that get our attention, they like to play on these really hot emotions like anger, fear, disgust, sadness. That gets a lot of attention really fast.

Under Biden, Americans' cost of living skyrocketed. Food, housing, auto insurance. Lawsuit abuse is a big reason everything's more expensive today. Frivolous lawsuits cost working Americans over $4,000 a year in hidden taxes. President Trump understands the problem. That's why he supports loser pays legislation to stop lawsuit abuse and put thousands back in the pockets of hardworking Americans.

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EY brings real-time insights and deep sector expertise to create value in the moments that matter. Whether it's untangling global supply chains, managing cost pressures, or leveraging emerging tech, EY's full spectrum of services help CPG and retail companies deliver profitable growth. EY, shape the future with confidence. Tax Act can think of a million things more fun than filing taxes. Tax Act is going to name some now. Sitting in Traffic.

Folding a fitted bed sheet. Listening to your co-worker talk about his fantasy team. Digging a hole. Digging an even larger hole next to that original hole. Unfortunately, TaxAct's filing software can't make taxes fun. But TaxAct can help you get them done. TaxAct. Let's get them over with. This is SquawkPod from CNBC. Today with Joe Kernan and Becky Quick.

This is Becky's mic. 3, 2, 1, up on Becky. Cue. The Trump administration is looking at a two-step approach to implementing tariffs. That's according to a new report from the Financial Times. It says the administration is considering trying to establish a more robust legal framework for Trump's reciprocal tariffs that are set to go into effect next week, while simultaneously helping the administration raise money as it seeks to cut taxes.

Among the options being talked about, the FT says that the White House is looking at launching investigations into trading partners while implementing seldom used emergency powers to apply immediate tariffs in the interim.

The report says that those powers could fall under the International Emergency Economic Powers Act or Section 338 of the Tariff Act of 1930 to hit trading partners with tariffs of up to 50 percent. Again, all of this is kind of in play in motion. We're waiting to see what happens before the day that President Trump himself has set as D-Day for tariffs. And that would be next Wednesday.

Our next guest typically comes in and we all feel like we're going to be able to cope a little bit better with modern life for like noon. That's why we need him here every week. He's going to weigh in on the latest divisions in our politics, the current economic and societal pressures and more. Joining us now, American Enterprise Institute President Emeritus Arthur Brooks. He's a professor, senior fellow at Harvard and a columnist for The Atlantic.

uh and uh host the how to build a happy uh life happy wife happy life pod no just happy life uh podcast thanks for joining us i was gonna i always kid you a little bit that despite your best efforts um it just seems like we we get to even more difficult places every time you're on i'm not sure that's true and i'm not sure that's true i think of the civil war i think of the 60s

I think it's never perfect, and we always are surrounded by it, and it's front and center, so we always think we're in these unprecedented times. In this case, with divisiveness, et cetera, has it gotten any better? I mean, Democrats are keying other Democrats' cars and setting them on fire. Teslas, because that's the only people who own Teslas are Democrats, and now Democrats are keying their friends' cars. Chuck Schumer.

I mean, even in the Democratic Party, there is just rabid division. Are things any better at all? To begin with, I was having this conversation one time with Ken Burns, you know, the famous filmmaker. And I said, it's never been worse than this. And Ken's like, what are you talking about? He had just at that point

finished Vietnam, his documentary in Vietnam. He says, tell me if you remember, I mean, I was not really conscious at that point, but he said in 1968, 1969, how many political bombings were there in the United States? I don't know. He said something like 700 bombings.

That it was a different time with more violence. Things have been a lot worse than they are today. We have a kind of a right now bias about the polarization that we have in our country. And the thing that's really worth pointing out is, yeah, there's a lot of polarization. But the truth of the matter is that this is different than most places around the world, where when there's polarization in politics, it gets real deadly, real fast.

The truth is, ordinarily, we don't have that much consensus. We really do have a competition of ideas, and the competition of ideas isn't that pleasant all the time. But we should remember to be grateful that we're living in a country that's still pretty peaceful. And even when things get pretty bitter, it stays pretty peaceful. I'm so grateful that we live in a country like this where

Most people are not that political. Most people are not watching nine hours of news a day. Most people will say, yeah, I love somebody who disagrees with me politically. So the norm is not the really radical stuff that's showing up in the media all the time. The norm is we disagree. Yeah. I remember the convention. I remember the SDS. Yeah. I mean, this is nothing like the weatherman. Yeah.

People can find stuff. The Symbionese Liberation Army, there was a lot happening. And, you know, on social media, it can make it look in our minds. Well, that's... Isn't that the difference? More polarizing. What if they had that back in the late 60s? Imagine. We'd still be going through it. Or the radicals would be just sitting behind their keyboards at home in their mom's basement. Like they do now. Which is actually what we know. You know, the typical person who's the biggest warrior on social media, who's the most polarizing figure, is a really pathetic person.

I tell people that all the time on Twitter. You follow me? Of course I follow you. I follow both of you. I have a lot of those basement dwellers. You engage. I do. I know.

Because I don't turn the other cheek. I really don't. Joe engages during the commercial breaks. That's the most amazing thing. You know, I'm listening to you. Might happen right now. On my Sirius XM radio. If someone says I'm wearing a toupee. And you go to a commercial break and I look at my Twitter. If someone says I have a toupee, I have to answer that. That's the one that really gets me. Why are you telling them your gifts? Don't tell them what annoys you more than anything. I'm amused. Toupee. Are you kidding? It's beautiful. It is beautiful. It's not dyed either.

On my life. If I had that, I could be president of the United States. How do we... Why is there... You've given us some reason for hope. Yeah, for sure. In the Trump presidency. And it's not... I think that...

I mean, you can go back to George Bush and then there was Obama and then there was Trump and then there. And it just seems like each one almost ushers in the next one. And then there was Biden and then Trump's back in. And so he's got maybe some.

comeuppance on his mind. Right. Of course. And you know how are we going to get through that? I mean, people are I mean, end of democracy, Nazi dictator, rapist. And it's only been two months. Yeah. How are we going to make it for Elon Musk, the

The patron saint of the climate change left is now getting firebombed. And politicians are hoping his stock goes to zero, even though the governor of Minnesota oversees the pension plan. Well, you know, that's the way that people have always talked about their political adversaries in the United States. And when we look at it today, it really alarms us. But once again, that's not a new thing.

The extraordinary thing to keep our minds on is the fact that it's actually not in any widespread or meaningful way turning to violence in this country. And there are a lot of reasonable... I can't tell you. I've got to answer this. Nice to pay numbnuts. All right. There he goes. Joe's got to answer this. No, I'm not. Let me ask you.

You have told us in the past that it's going to take a leader who comes back and inspires people. But it seems like the way to become a leader in today's society is to prey on what works. And what works and what sells on social media and other areas is this agitation and some extreme from either the right or the left.

Yeah, no that's... Who gets the attention. Yeah, no that's who gets the attention. And it crowds out the people who maybe think more like the rest of us but are a little quieter about how they go about it. Yeah, the brain's limbic system is, you know, the console of tissue, it's about between 2 and 40 million years old, is dedicated to perceive threats and opportunities.

and that's what is dedicated to but threats have more physical space in the brain than opportunities where we have us called the negativity bias and the result is that people in in in politics and media and other places to get our attention they like to play on these really hot emotions like anger fear disgust sadness that gets a lot of attention really fast but the most successful leaders in the long haul what they do is they have a kind of a slow burn on the positive side and that ordinarily is what we would expect to see now right now we got these kinda

five percent fringes ping-ponging back and forth that the victims of which by the way the people at our margins of society where they don't know if they can have a health care and the uncertainty that comes along with it why are the five percent

Would you consider AOC and Bernie to be in the 5%? Then why are they the ones that are now galvanizing all the attention? And that's the answer to the Democratic Party's malaise. Well, that was, Becky said this. They get the attention. The people on the 5% fringes get the attention on the both right and the left. But ordinarily what happens when you ping pong back and forth between the fringes for a while, and this is as old as history, by the way.

way somebody will emerge who's much more not just in the middle but somebody who's more consolidating in their views and more positive in their rhetoric that's what comes forward but it takes a long time of a lot of discomfort where people finally say enough i've had anyone on the left other than betterman that fits that oh i see lots of mayors governors people at you know different levels of politics and society what they're not as part of the the the the political entertainment establishment in washington dc

That's where people are paying attention. The truth of the matter is people are touched much more by state and local politics. And that's where I see leaders that are trying to bring people together in both the Democrats and the Republicans. And there is a perception that on the right...

that anyone that would be more palatable to the entire country than President Trump is afraid at this point to speak up. That's right. And that's a criticism they'll get from Democrats is that they're all a bunch of sycophants because they're afraid of retribution. The truth is if you're in the 5% margin, you have to be a bully.

That's the nature of what that is. That's a set of personality characteristics that puts you in the fringe called the dark triad of narcissistic, Machiavellian, somewhat psychopathic personalities, not naming names, that we find in politics and media who are in the far extremes and they capture the attention. And they're willing to do that. They're willing to bully you. They'll kill you for half a donut.

That's what they'll do. But the truth of the matter is that people, they'll say, I don't like my bully, but I like the other bully less. And so they'll do this for a while. But the American people are getting pretty exhausted. And I'm confident that one party or another is pretty soon, in the next five years, going to put forth somebody that people are going to be able to get behind. And that's happened in the past many times. Why do you think the right track went...

from 20 percent right track wrong track now at 45 percent where's that from that's been going on for the longest time is so these are the hot best number since 2000 all right track right track right track it's bet it's the best number since since 2004 so what yes that's a good point and that's what we typically see in the first three or four months in the new presidential administration this work just disrupt totally mean you got any you got any purse a nice is right

And then if we have so much policy, and by the way, what do markets hate? They don't hate certain policies. They hate policy uncertainty, right? Because, you know, the traders are like monkeys on cocaine. And then when you give them any sort of uncertainty, it perturbs this environment. That's the kind of thing that we see right now. We've got a new boss, same as the old boss. And so the point is you get three or four months of incredible optimism because Americans are very optimistic. And then we tend to go back to the relatively pessimistic,

So this is not your fault we keep hitting new lows in terms of the dissonance in modern society, despite your best step. Would it be counterfactual? Would it even be worse without you and your efforts? Me personally? Yes! Mr. Happiness! Yeah, it's like, without me, think how bad things would be, Joe.

Keep it up, Arthur. But it's amazing that you're able to. Do you ever question? Do you ever just say, I'm F this. I can't do that. I'm going to do sadness, not happiness. Well, you know, one of the things, I have a natural tendency toward pessimism as a person. You do? I would never believe that. That you're working so hard. That's why I study happiness. And so I have protocols in my life. I mean, I have protocols in my fitness and my spiritual practices. I'm all about protocol. But one of the protocols that I have when I wake up in the morning, some people get up, they wake up, they're like,

It's a great day. It's like if that's you You're annoying. That's But for me, I wake up like oh, I'm a horrible sleeper. I say gratitude gratitude and what am I grateful for? I'm grateful for for my wife and my kids and my family, but I'm really truly grateful to be an American and

You know, I've lived in different places around the world. I'm so grateful to live in a country where people can be screaming at each other in this way. I could say something insulting about the president of the United States on air on this show right now, and I would go home to a safe home. There would be no knock in the night, no jackbooted thug. I would still have my professorship at Harvard. God bless America. That's all I can say. Warren Buffett says that all the time, that we've all won the ovarian lottery.

lottery by being born the time we were born, where we were born, and that's true. Yeah. And you know, with this perspective that we have of the things, all the blessings that we actually have, that it changes the way that you see things and it gives you hope for another day. And there's always hope for another day in this great country. You mentioned the worst cases of that, like China and Russia.

in Germany and in the UK now. Can't you go to jail for a tweet? Yeah. I mean, it's just amazing to me that people don't, we say it's so bad. People are saying it's America's as bad as Nazi Germany. I know. Or somehow that we've lost all our freedom of speech. Look around, man. Look around. You know what this looks like in other parts of the world. It's just, there's no comparison, quite frankly. Yesterday, we had a long discussion about, I think it was,

I thought it was insanity. Someone was saying, well, with Columbia, worried about the research grants going to Columbia. It's like all the greatest, some of the greatest researchers I worked with, and I got NIH, I got NSF funding. A lot of really great researchers were Jewish. If you can't get to the lab online,

on your way without feeling like you're not welcome on campus or that your life is in danger or someone saying genocide. What good is the research money if you don't get your P's and Q's in order? One thing to keep in mind as well, though, after we saw those incidents where there was open anti-Semitism, look at the backlash in this country. The backlash is the interesting thing. Still going through it. They're mad at Columbia for agreeing that students shouldn't wear masks. But Columbia agreed.

This is the thing. This is progress. This is progress is when there's antisocial behavior like this that's completely unacceptable and incompatible with American values. And this is the guy we had on yesterday was mad that Columbia had agreed.

and thinks that we're losing free speech. But look, at the University of Chicago, they have been much more forward about making sure that there is free speech on all sides. Well, what was that yesterday, then? He said he didn't want to criticize his peers.

directly, but he would like to see everybody look more to the University of Chicago neutrality process. And we see in my university all kinds of progress. Really? For sure. You had to get rid of your president. And we got a great president, Alan Garber. He was the provost beloved, working with all sides, standing up for what's right. I mean, it's... I got to say, I see...

See, it's not perfect. And nothing is perfect in this country because we have a lot of disagreement. But I'm really grateful to live in a place where not everybody agrees with me, quite frankly, and where we can actually do so in a way that's not always comfortable, but is almost always safe. I do have some good tweeters. No knocking at the door unless it's in Palm Beach.

What's that? What's in Pompeii? When the stormtroopers rifled through Melania's underwear. Oh, I see. When they were looking for the classified documents at Mar-a-Lago. There's always an answer for something from either side that they can get you on. There's always an answer on social media. There is. All right. Let me just answer this and then I'll say goodbye to you. No. Thanks, Arthur. It's great to be with you. Great to have you here. My favorite show.

Next on Squawk Pod, David Rubenstein, the private equity pioneer, co-founded Carlyle and has done tons of patriotic philanthropy, restoring the Capitol Dome and other pieces of American history. What he sees in the economy in 2025. I think the tariffs have scared some people and slowed economic activity a little bit, but I don't think it's going to push us into a recession.

Under Biden, Americans' cost of living skyrocketed. Food, housing, auto insurance. Lawsuit abuse is a big reason everything's more expensive today. Frivolous lawsuits cost working Americans over $4,000 a year in hidden taxes. President Trump understands the problem. That's why he supports loser pays legislation to stop lawsuit abuse and put thousands back in the pockets of hardworking Americans.

It's time to make America affordable again. It's time to support the president's plan. You may get a little excited when you shop at Burlington. Burlington saves you up to 60% off other retailers prices every

Will it be the low prices or the great brands? You'll love the deals. You'll love Burlington. I told you so. Styles and selections vary by store. Welcome back to Squawk Pod.

You're watching Squawk Box right here on CNBC. I'm Becky Quick along with Joe Kernan. Andrew is off today. We do want to take a look at the state of the U.S. economy, inflation and much more with our guest David Rubenstein. He is the Carlisle Group's co-founder and co-chairman. He's also the team owner for the Baltimore Orioles and baseball season is here. We are getting ready to go.

All right, opening week. I noticed your tie. You're with the Orioles tied straight out of the gate here. Yes, I went to see a game yesterday. Unfortunately, it was rained out in Washington, but hopefully the weather will be better. We're opening in Toronto later this week, and then we come at the Baltimore next week for opening day. We're going to talk more baseball in just a little bit, but why don't we start with the economy first. Where do you think things stand at this point? Just questions about the economy, how things are going, questions about business confidence, consumer confidence. What are you saying?

I think the economy is in reasonable shape. I think the economy that President Trump inherited was in reasonably good shape. But I think the tariffs have scared some people and slowed economic activity a little bit. But I don't think it's going to push us into a recession. I don't think anybody's really projecting a recession in the near term.

Right now, I think the tariffs have done a pretty good job of getting people's attention around the world, getting people's attention in the business community. As a negotiating technique, I think it's probably pretty effective. Whether you implement them across the board, all kinds of tariffs everywhere, that might be more complicated to do and might have some inflationary impact. You think any of it was, well, speaking of inflationary impact,

you know i think any of the economy that that he inherited was juiced by you know two trillion dollar deficits when we didn't need deficits and and 24 of of government spending when we didn't need to do that either that's that's why the economy is rocking and rolling because of covid president trump and president biden injected five trillion dollars in the economy without corresponding tax increases so both

presidents and everybody along their administration wanted to do that. But you know the criticism is for what happened after you didn't need any more stimulus, which brought in the 40-year highs in inflation. You know that's a criticism, that they went way too low. I know a lot about inflation because I worked in the Carter White House, and so I know what inflation is, and it wasn't quite as high as we had in the Carter White House. But inflation was high, but it did come down. I think the Fed and the Secretary of Treasury said it was transitory, and in the end they probably will regret that. But inflation did come down

And when President Trump got in the office, inflation was probably around 2.8 percent or so, not so bad. You think the Fed right now is more concerned about inflation, not going back to its 2 percent target, or more concerned about the economy slowing down and needing to step in to do something? Well, those are the dual goals. Originally, inflation and the currency was what the Fed was supposed to worry about. We changed that a number of years ago, and they're supposed to also worry about unemployment and unemployment.

in the general economy. I think the Fed is worried about the economy slowing down for sure, but I don't think they see a recession. I think they think inflation is coming down a bit. I think they're probably worried about whether tariffs will have, if implemented, a big inflationary impact. But I don't think all the tariffs are likely to be implemented and therefore

Right now, I think we're likely to have around 2% economic growth this year. 1.7 to 2% was probably what people project, which isn't terrible, not great. But an economy of $30 trillion, that's not so bad. Wouldn't you need... You would need a...

We put a tariff on, matched by somebody else. We raise that because it's a second derivative. Just a one-time tariff doesn't increase inflation. It increases prices, but it doesn't increase the rate of price increases every year, right? Unless it's a trade war, I guess. Yes. But remember, tariffs are paid more by the American consumers. They aren't paid by the person who's importing products. And that's...

But people have to know. So when you have tariffs, you're going to have some inflationary impact. But what President Trump — Ben Wattenberg: Higher prices. But not necessarily higher inflation. That's not my point. Ben Wattenberg: Well, unless workers demand higher wages to pay for the things that they're — Ben Wattenberg: But look, it also slows down economic growth. What we learned from the 1930s is a massive tariff program, as we had in the 1930s, doesn't usually work. And that program was a disaster. So massive tariffs across the board, probably not a good idea.

talking about tariffs and maybe threatening them to get certain things out of other governments before you actually impose the tariffs, that might have a beneficial impact. Yeah, you said that's a good negotiating tool. Maybe we do get a better deal from some other countries where we feel like we've gotten ripped off over time. What's the impact you see at your businesses at Carlyle? Are they doing things to bring in additional products? Are they slowing their CapEx plans or their hiring plans as a result of any of this? The

Carlisle has companies which have roughly a million employees and large part of them are in the United States. We haven't seen any deleterious impact yet from the tariff discussions, but at some point it could happen if we go into a big tariff program. I think right now what people are worried about is artificial intelligence and figuring out how to take advantage of artificial intelligence. And really a lot of people are worried about people stopping to spend money on artificial intelligence. Many of the biggest companies in this country are spending a lot of money on artificial intelligence, which will help our economy.

If they stop spending that money, that will slow down the economy. Are Carlyle companies spending money on AI, too? Because that's been the question. If this growth in spending slows down from the big companies, do other companies step up? If they're not spending time on artificial intelligence, they're not doing the right thing. Everybody has to do something. Spending time and money? Spending time and money, yes. Right now, NVIDIA's biggest customers are spending staggering amounts of money for artificial intelligence. That's where NVIDIA is getting most of its products from, or sales from its customers.

big big five customers so i think it's a very important part of the economy i will be wouldn't predicted five years ago and i think nvidia uh... is a is a leader leader in this i don't think it's going to change anytime soon they've got a big head start i think they're pretty good shape we've talked about how m_n_a_ activity is down uh... in this quarter maybe surprisingly so but are there deals in the pipelines or is there a lot of things that

are kind of percolating up? I think when the Trump administration was elected, people thought there would be a much easier FTC and Justice Department policy. It hasn't yet come to fruition. It might. So some people are waiting to see what the policies will be. We're also trying to, I think a lot of people are waiting to see whether prices come down for acquisitions.

As you know, for a long time, there was a big gap between what buyers and sellers would pay. Now I think the gap is closed a bit, but it's not quite as close as probably we would like it to be. Gap is closed because the market has come down, the equities market, and that's a real problem. The equities market has come down, and also people can see where the inflation is not going to be as big a problem as people once thought.

But I think right now there's a pressure on a lot of the people in the private equity world to sell companies they've had for longer periods than they want. And I think they will probably take a lower price. For a while, many people were afraid that if they were going to buy something, they might be buying it into a recession. They thought a recession might happen. Now they don't see a recession in the near term. So I think buyers are probably more likely to show up now. And sellers are adjusting their prices to say, I don't need a 30% rate of return for my deal. Give me a 25% rate of return. I'll take it.

Let's talk a little baseball right now. Okay. Baltimore Orioles, you bought this because you love baseball. You love . . . Well, I wanted to help Baltimore, too. I'm from Baltimore, and I thought it would be helpful to Baltimore. Well, let's talk about payroll, because I think at the World Economic Forum you said that you'd love to have a cap, a salary cap, like other leagues have, too.

You're not going to get that at least anytime soon in Major League Baseball, but you've done some trades and some positionings yourself. I read a couple of months ago that you guys were estimated to have the second highest payroll that the franchise had ever had. I don't know if that's still the case. It is. It's the highest we've ever had, but also we had, I think, the biggest increase percentage-wise of any payroll in Major League Baseball. So we had a lower payroll, and we've gone up dramatically. Now, we're not as high as...

the Mets or the Dodgers or the Yankees, but from where we were, we had a gigantic increase. I think what baseball fans want is equilibrium. What they want is to feel everybody has a chance of winning the World Series every year. And that's what makes baseball exciting. You root for a team or you root for a team, you want to think they have a chance at the beginning of the year. If you think they have no chance, it's not going to be as exciting. So what everybody wants, and fans, players,

owners is equilibrium and some fairness and that's what I think everybody wants to have. Although baseball has more varied winners than a lot of the leagues that do have salary caps.

Well, that's true. We've had a number of different winners, but there's no doubt that there are a couple teams that are probably more likely to be at the top of baseball in the future than some other teams. I think there's some disadvantages some people have. But on the whole, what we want to have is a feeling that by the fans that anybody can win a World Series any year. And that produces some kind of equilibrium and a feeling that I think baseball fans would like to have a belief that they can win, their team can win every year.

Right now, sometimes people don't feel that way. But in the end, this is something that will be resolved down the road. It's not going to be resolved this season. Do you feel super competitive with any other team? I'm thinking of Steve Cohen and the Mets. Do you feel competitive with Steve Cohen on any level in terms of what you want to show with the turnaround or anything that comes down that way? I feel competitive with every team we play. Steve Cohen has been a very strong leader. He's a very effective leader. He's now on the executive committee of the Major League Baseball

And I think he's a very smart guy. He's done a very good job with his team, for sure. What excites you most about the beginning of baseball season here? Well, I went down to spring training and I actually hit some balls and people were shocked that I actually hit the ball.

Did they slow down the pitches for you? Well, they were three to five miles an hour. I mean, they weren't 80 miles an hour. But people were surprised I could actually hit the ball, and I was surprised myself. And a couple grounders, I was fielding some grounders, and Cal Ripken was watching me. He couldn't believe I actually could catch a ball. I wasn't looking at the ball. It just happened to go in my glove. But, you know, I'm not as bad an athlete as I once thought, so maybe I should, you know, get in better shape, and maybe I can help the team when they really need a player. You go to all the games?

I can't go to all the games, but I went to 35 last year, which is a lot more than I went to the previous year. So I expect to go to a little bit more than that this year, but I can't go to all the games. But any of you, either of you, if you ever want to come to an Orioles game, we're playing in New York or playing in Baltimore, just let me know. Take you into the clubhouse and the dugout, meet the players. If you want to get in the batting cage, I'll let you do that too, and you'll have a good time. How great were the rule changes last year? They were great.

I think they're pretty good. They made it much better. I think we need umpires. I don't think you can just do the... Well, we're not... We're a long way away from not having umpires. But they are going to have... They're going to have like... You're going to be able to challenge something now, aren't you?

or how is that going to work? We'll see. It's an experiment. We'll see how it works. But, you know, we've just renewed our contract with the umpires association. So the umpires are going to be there for quite some time. And we need them, but they make some horrible calls. And I've seen it, David, where it's the crucial part of like the ninth inning or something. I've got to bet on the other team. And it's either a strike or a ball that changes everything. And it could be totally wrong. And it gets very frustrating. Umpires are humans. Unlike, you know,

You and me, they make mistakes and we make mistakes too, right? You don't want to take time for challenge stuff. We see that happening. Too many challenges slows everything down too. How many baseball games do you go to a year? Not that big. I'm a Reds fan. You're a Reds fan? Yeah. So I try to go and see what happens. Okay. Look, would you really want to have a computer making all the decisions? No. Would you want a computer here doing all the talking on the show? No. You want to have humans do things and humans are better than machines, I think. So?

So, I think for the time being we're going to do what we're doing. We'll see whether it works in the minor leagues in some ways, but right now I think we're okay.

David, what happened with the Kennedy Center? You were the chairman there for 14 years, but recently the president, President Trump, removed you and Deborah Rudder from positions there. Well, what happened was I had tried to step down after 14 years, and my successor did not choose to go forward. The person that was going to likely replace me decided in the end not to do it, so the board asked me to stay two more years.

The president made a decision to change the board and get rid of a number of people, including me. I did 14 years. Everything I could do, I probably didn't have 14 years. So the president wants to be in charge of it now. He's chairman of it, and we'll see how it goes. I hope it works out well. You still care a lot about the Kennedy Center, having spent that much time there. I've been the biggest donor in the Kennedy Center's history. I spent a lot of time there. I love the Kennedy Center. I think it's a great national treasure, and I think it will...

be a great national treasure for many, many years into the future, whoever's in charge of it. It's a great resource. We just had a big event over the weekend, which is the Conan O'Brien Mark Twain Award. And Conan O'Brien was there. He did a really good job. And, you know, I think the Kennedy Center is something that is a national treasure for this country. And I don't think anybody is going to really ruin it. David Rubenstein, thank you so much for joining us today. Good to see you.

And that is SquawkPod for today. Thanks for listening. SquawkBox is hosted by Joe Kernan, Becky Quick, and Andrew Ross Sorkin. You can tune in weekday mornings on CNBC at 6 Eastern and get the smartest takes and analysis from our TV show right into your ears when you follow SquawkPod wherever you get your podcasts. We'll meet you right back here tomorrow. We are clear. Thanks, guys.

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