>> i would like to start by pointing out that david has achieved such rockstar status -- when you go to to a conference you are in the green room. this guy rolls in about 20 seconds before and walked in. let's acknowledge david and who he has become. david: you are the rockstar. you are on tv every night. >> i am, but i woke up this morning because i wanted to learn from you. we all do. i want to start with getting your assessment. if i were to ask you, let's say january 1 of this year, give us a snapshot of how you see the global economy. i would love to get it from you, january 1, and then we will do today. david: despite what was said in the campaign, at the beginning of the year the global economy was in reasonable shape and the u.s. economy was in reasonable shape.

the u.s. has roughly 5% of the world's population but 18% of the world's gdp. our gdp is roughly three times our population, which suggests it should be. you are in recently good shape last year u.s. economy grew at about two point 4%. unemployment is 4%. pretty low. inflation was coming down. not quite at 2%, but slightly below 3%. so, generally a reasonably good economy. and so, i would say the economy, despite what was said in the campaign, was reasonably good. in january 1. david: >> today? today there is uncertainty. what business people like is certainty. tell me what the rules of the game is and i will figure out how to deal with it. there is uncertainty because the policies of the administration change from time to time and people are reluctant in the business community to say critical things about the administration, so they tend not to do it in public.

but in private they have been telling the president, from what i understand and talking to them myself, that there is uncertainty in the tariff policy is not going to produce the kind of results that the president originally thought it would produce. >>'s neck if you any concerns that business leaders are unwilling to voice their views publicly throughout modern history business leaders, especially in the last 10 years, regularly speak about how they see the world, how they see whomever is in the white house, and now this silencing, you see business leaders speak to you privately. i'm amazed in the last two weeks how many business leaders are sounding alarms who i speak to privately and who will not say a word. david: it is not the business leaders only. congressional leaders have not been, at least on the republican side, been willing to criticize the president or the administration. clearly the way this president operates is that if he disagrees with you he will call you out in

a visible way, and people don't like to be called out and criticized in public. it is a very effective technique that has worked to quite people in private, telling him now, the economy has some real risks and if changes are not made, if tariff policy, he risked going into a slowdown or recession. >> it is an effective technique, but do you believe it is one that should be employed in a democracy, in the most powerful country in the world? david: you know, people don't change their approach when they're in their late 70's. i'm in my mid-70's, and generally -- >> you are really open-minded right now. david: president trump's way of dealing with things is not to do it as subtly as maybe some of his predecessors did or do it as privately. if he has a disagreement with people he will say it publicly, and that has been an effective tool to getting what he wants.

he doesn't get everything he wants, obviously, but think about this. president trump was a businessman who was, you know, reasonably successful but not the most famous businessman in the united states. had a tv show that got him attention and he parlayed it into becoming the nominee in 2016. and to the shock of everybody gets elected president. after four years as president he later found out that he was, you know, impeached twice, had the results of january 6, five indictments, i guess, or two convictions, and so forth. i don't think anybody has come back from as far as he came back since napoleon left elbow. napoleon was put into elba and nobody thought he would ever come back. he came back and ruled france again. that trump came back from mar-a-lago and has run the country again is astounding. so, he has obviously got an enormous amount of skill to be

able to pull that off. he won the election. it was an election that he thought he would win all along and he thought he would be right and if biden ran who knows? it is clear the election was closer than some people say. 230,000 people had voted differently in michigan and wisconsin, harris would have won those three states. it was in a landslide, but it was enough for him to feel he had a mandate. and, he has acted fairly decisively trying to get things done. it has not been as easy as he thought to get things through congress. and clearly getting a peace negotiation in israel and gaza is not easy. getting an iranian agreement is not easy. getting a peace settlement in russia is not easy. and getting the chinese to do what he wants is not easy. he's not going to say this publicly because it is not his personality, but i think he has obviously gotten the attention of a lot of people, and i think he will get some things done. some things he will not get done.

>> given that he was elected president twice and everything that happened in between, i would argue he is probably the most skilled politician we have ever seen. but many people have said they were excited about this president because he was a great businessman. when he was a businessman in new york did carlisle ever do business with him? we did not that i'm aware of. we have a real estate business. we had not done business with him, but many leading businesspeople in new york had not do business with him. i don't think he was well-known at j.p. morgan or blackstone or apollo for doing business with them. he was an entrepreneur you're businessman that built a small real estate business that his father had built and took it to manhattan and built the business there. but think about it. he came from relatively nowhere. our member one time i interviewed him at the economic club of washington. i had gotten to know him a little bit from some things. my parents retired from

baltimore they moved to a suburb called west palm beach florida. -- west palm beach, florida. when i used to do family events i would rent out a suite at the mar-a-lago. >> were most people have their family events. yes. -- david: yes. i just needed a credit card. as the head of the economic club of washington i said, i would like to interview. he came into the green room, i think it was december 2015, and he said, anything you want, but for sure asked me two questions. what are they? ask me if i'm going to run for president. i think is said, president of what? [laughter] he said, president of the united states. i said, donald, going from being a businessman in new york to being president of the united states, that is a big leap. i didn't take it that seriously. obviously i was wrong. he also asked me to pull his hair. people don't think it's real hair. >> did you? david: i didn't feel

comfortable. he had a good sense of humor about himself, but think about it. have had, what, 40 seven people serve as president of the united states? he was the first one who never had any government experience. everyone else had been in the government or in military or civil experience. he had none. to be able to go from that to being president was an incredible leap. do it a second time is quite something. i know a lot of business people say i am more talented than him and i should be president. but they didn't do it. he had the courage to run, so while i don't agree with his policies and he has some challenges and clearly there is uncertainty, you have to admit he came from nowhere and has a force of personality that is unusual. even in the business world. >> he sure does. how would you assess how things are going with the trade war? can griffin was on the stage and he said he thinks it is devolving into nonsense. and of the big concerns is how it is making us look on the

world stage and how people view the united states as a global superpower. david: i want to preface my remarks by saying i don't have any animus toward the president. i was the chairman of the kennedy center. i am no longer the chairman of the kennedy center. i am the first person ever fired by a president and succeeded by him. he got the job, and so i was already ready to retire anyway, so i don't bring that into my calculus. clearly the global economy is not doing as well as president trump thought it would. i think the reaction to the rollout of the tariff policies has not worked as well as he thought. and i think no one in his administration if they are being honest with say this is working the way we want it. clearly you have to get the president off of a ledge. he is not famous for saying, i made a mistake he's not going to do that, so you have to find a way for him to pivot. his advisor is looking for a way for him to visit, that pivot, which will give him the ability to say, i got something for what

i did and i did not waste my time. if he can negotiate some deals with our trading partners that will be a plus. the biggest challenge in the tariff world is china. you can beat up on lots of people in this world and they can't fight back, you know? if you are dealing with a subcontractor in queens who is building a building with the and you don't like the way they are handling it you can say, i'm not going to pay you the full thing, and maybe negotiate a settlement. it is hard to beat up on the president of the biggest country in the world with the second-biggest economy in the world who is going to be president for a long time after president trump as president. i don't think you can intimidate xi jinping in a way that i think you know, some people might have thought. i met with xi jinping and he is a pretty imposing person. the first time i met him i was the chair of a chinese investment group or advisory board at a university, business

school. i happened to be the chair and we get to the meeting that day and they say, ok, you are the chair, and the first thing they said was, we are going to go meet with the chinese leader. we get on a bus, people like tim cook and stephen schwarzman, and people more famous than me. i happened to be the chair because nobody wanted to be the chair. the first thing that happens, they show up with the senior leader and it turns out to be xi jinping. how my going to have a conversation? i didn't really know him, so i felt like saying, you know, there is a saying that a trip of thousand miles begins with a first step. that is a chinese, you know, saying, i told him. he said, well, that is a chinese fortune cookie statement. i realized i should not be quoting chinese proverbs to xi jinping. but he is a tough, tough man. and i don't think you can intimidate -- >> you gave him a fortune cookie line? [laughter] 4 david: sometimes i read things in the fortune cookie.

you never know where these things are coming from. he is running an economy that is the second-biggest in the world. americans have said repeatedly china's economy is weak, china's economy is going into recession. we have been saying that for years and it does not go down as much as we think it is going to go down. the chinese economy has an enormous amount of resilience. the people in china are used to suffering. they can take a lot of down and adversity. maybe better than we can. i don't think you can intimidate china into agreeing to what you want. in the first term the president began with tariffs and there were negotiations. there was a trade agreement. it probably was not honored in chinese -- by the chinese in part because of covid. this time having tariffs of 145% are unsustainable, as people have said. i suspect there will be some negotiation to change that. on the whole the president is getting a lot of what he wants done. not everything he wants done. i suspect he will have more

success in getting things through congress. >> what do you think he is getting done? david: i think there will be a tax bill. it will not be exactly what he wants, but there will be a tax bill. he has been clear in things he wants to make a difference in. d.e.i., for example. dei is something that was part of the fabric of the government of the united states, and i would say society. now there has been a pull back and there has been some impact on corporations moving away from dei, rightly or wrongly. clearly he has had some impact in cutting some spending from the federal government, but probably not in the way he may have initially anticipated. >> what do you think about that? do you think about doge? you think about all of these federal jobs cut, and even how they are going to impact regional economies around the country? david: the federal budget is roughly a trillion dollars. and we run roughly a 1.8 to trillion dollar annual deficit. the result of that is we have

roughly 86 to $37 trillion of debt. that is unsustainable on a long period of time. the only way you can solve -- you can solve the debt problem five ways. one, you can cut spending. that's not easy to do, but i will get back to that in a moment. you can increase taxes. nobody wants to do that. you can go to the imf for bailout. you can say, we are going to default. well, you are not going to default because the u.s. government debt is the center of the global economy. or you can say, i'm going to let my children and great-grandchildren paid off and devalue dollars. that is essentially what we're doing now. i don't have any great grandchildren yet, but my great-grandchildren will start paying this off down the road in devalued dollars. the bigger risk we have in a global economy is that we borrow so much money that if people don't buy our bonds ultimately we are not going to be able to sustain this debt. >> are you concerned that is

about to happen? david: i'm concerned that the value of the dollar may not be as strong as we would like it to be. it has lost 3% of its value since january terms of values against other currencies. we have to keep the dollar strong because that enables us to keep borrowing this money. we don't have a sovereign wealth fund. we have a printing press. reprint dollars and that is how we have sustained this lifestyle. president trump has been trying to cut it and i think doge has been an effort to do it. it has not worked as well as i think anybody in doge thought it would or in the present thought it would work, it is an effort to cut some spending. but is not going to have that much of an impact. elon musk said he was going to cut $2 trillion out of the budget on one point, then he said, i think $1 trillion. >> $150 billion. david: it is very difficult. congers tries all the time to cut spending and it has not worked. i have some experience with doge, and i say it is

complicated to think they can get all of these things done. if elon musk leaves at the end of may or reduces his time intimate and is part-time, it will have less impact probably had now. >> and want to ask you about a former employee of yours, jerome powell. has his job gotten -- i thought his job was really hard post-covid. has it gotten exponentially harder now? david: jay powell worked for carlisle for eight years. i hired him. very nice guy. he was a lawyer by training. not an investment banker. not an economist. i think he has done a good job for these reasons. one, explains what he is going to do before he does it, which many fed chair's did not do. when paul volcker and alan greenspan where the chairs they would take action and you had to figure out later what they did because they did not have press conferences. after the fed takes action now

chair powell explains what they did, and i think he has the confidence of the board and the confidence of people setting interest rates. i think he has done a pretty good job. if there is any mistake i think many people made the mistake of using the word transitory when covid began to infect our economy, and we spent -- the trump administration and the body demonstration spent roughly $5 trillion of money that was not correspondingly dealt with with tax increases. we spent $5 trillion more than we otherwise would have spent, and by doing that you produce inflation. and it was not transitory. and they recognized it was not transitory that began increasing interest rates, and now they have the inflation rate down to slightly below 3%. getting it to 2% is difficult. very difficult. before when all of us were -- many of you my age were in college the college textbooks would say, the standard rate of inflation in a global economy is probably 3% to 4%. but when paul volcker came in he

increased interest rates 200 basis points one weekend, and interstates ultimately went down to about -- down to about 2% money -- and we had two percent for years. we also had a recession or two as a result of that initially. jay powell has avoided a recession. we haven't had a recession for more than seven years. in our economy you have a recession roughly every seven years. except for a technical recession during covid, which in was not a recession. we had two consecutive quarters of negative growth. >> you think we are in or heading into one now? david: when i worked in the white house there was an inflation advisor named fred con. he went into the white house briefing room one day and said, i think we are heading into a recession. calder haldeman said, i'm running for reelection. do not use the artwork. it scares people. he said, i'm an honest guy, what am i supposed to say? he said, i think we are heading into a banana. he used the word banana as a

different word for recession so the reporters would not put that in the headline. i think the economy is slowing down. >> you have the wackiest stories. david: if you have a trillion dollars in the budget and you chop it too much you are going to probably reduce government spending by enough so that it slows down the economy. if business people don't want to do deals, if business people are afraid of taking companies public, if there is a freeze on spending because we don't know where the rules of the road are and what the policies are going to be on tariffs, you have a slowdown, and that could produce a banana. we don't know. i think it is too early to say. usually you don't know you are in a banana until the banana is in place. as to jay powell -- >> if one were to say, do you think we are banana bound? david: i would say at some point i think there will be a banana. >> in this year? david: i'm not good enough to predict. i'm a lawyer by training, i'm not in economist.

-- an economist. if you scare people into not spending money and investing, and if prices go up very much and you get high inflation, you will probably produce a banana, or some other fruit. [laughter] so, i don't want to say it is going to happen, because i am not an expert. what i would say there is yellow lights going on now in the economy, and i think it is not irreversible. tomorrow the administration can say, some of the things we wanted to do we are not going to do them right now. have higher priorities and we are going to put them on the back burner. some people would say, let's be focused on getting the tax cut through and dealing with the bread-and-butter issues american consumers have to face. i would say it is challenging. powell's job, one of the things he has done well is not respond to criticisms. how many of you here would like to be beat up by, you know, the

leader of the free world and just not say anything in your defense? jay powell has been good at keeping his head down, not criticizing anybody who is criticizing him, and dealing with the problems that the fed sees. i think the fed has done a pretty good job of getting inflation down. interest rates are higher than they were eight years ago, but that was because covid came in, and basically we saved the economy from, really, devastation because of the things we did to -- and spending money, and we had interest rates go up as a result of that. >> we are out of time. i appreciate this baltimore lawyer baseball fan, david rubenstein, joining us and sharing his expertise. [applause]

♪ ♪ >> danger, danger. [laughter] hi. >> has a such a pleasure to be here with you. thank you all for being here