← The Walker Webcast
The Walker Webcast
Steve Hills, Author and Former President & General Manager of The Washington Post with Tom Nides, Vice Chairman of Strategy and Client Relations at Blackstone
01:00:08
Loading summary
Transcript54 lines
- [00:01]
A
Walker and Dunlop brings you insights for life. Unique perspectives from impactful leaders. This is the Walker webcast with Willie Walker.
- [00:36]
B
I want to start off. It's really a pleasure to talk with Tom Nides. As Willie introduced earlier, Tom is an extraordinary person. Normally, politics and business don't really mix. They often have contempt for each other, sometimes tolerance. But Tom is a remarkable person who's been able to succeed really to extraordinary levels in both of these different venues. So, Tom, your path was very interesting. You went from Capitol Hill to Fannie Fannie to Secretary Clinton, Clinton to Credit Suisse, Credit Suisse to State Department, State Department to Morgan Stanley, Morgan Stanley to Ambassador to Israel and Ambassador to Israel to Vice Chair of Blackstone. So the first question is, why can't you hold down a job? What's going on? Talk about it.
- [01:27]
A
Is that before I did Everest twice. Yes, Willie, didn't you forgot that I did on Everest twice. Willie, this is remarkable how you could actually be involved in bringing an audience down from what we just witnessed on the cameras. I told everyone I was going to go back to my house before I decided to show up after watching that was an extremely unbelievable story. So, Willie, congratulations to him in his achievements. And I know they're going to do a Netflix series on me given the fact that I gained 10 pounds when I was ambassador to Israel. So I think there is hugely, I can hugely see the trajectory here. And the reason I've had all these jobs is that I have not had a chance to fully read Steve's book the Alpha Trap, which really means, you know, how to stop taking new jobs and assuming your success of where you had it. And I can't wait for that to come out. We're to talk a little bit more about his book later. He thought he was interviewing me. I'm going to interview him. Listen, Willie knows this really well because I've known Willie for a long, long time. And I hear Mallory and Diane are here too. Are the Walkers here? Oh, hey, guys. Hi, Dan. Ben, you're not paying attention to me. Will you tell her I said hello to her? But I've known the Walkers for a long time and I've adored the family and obviously Willie and I are very close friends and I've seen what this company has. You know, there's very few three generation companies, as they like, refer to them as the three GS. Very hard to do this, hard to keep them together. But the idea that Willie's grandfather and then his father and then Willie has been able to put together this Institution is a testament to the family and the values and. And Willie, I'm honored to be here and to be part of this. And listen, I've been really lucky. Like many of all of us in this room, we got the lucky gene. I've had all these opportunities and been able to go from politics to business to diplomacy to foreign policy. That's kind of cool. And we all have kind of. I don't get to climb Mount Everest, but I've been able to serve the government in a whole variety of different ways. And I like making money. I'm more than happy to say I'm a great capitalist, so I like doing that as well. It's better to do these jobs in government when you're not poor, so you can pay your American Express bills. So I've been able to achieve both. So that's sort of why I can't keep a job, because I like twitching around all the time.
- [03:55]
B
Let's talk about that. So, I mean, in seriousness, and we'll get to Iran, you know, off the bat, because there's some things going on there that are pretty important that you have a unique knowledge of. But what do you think has made you successful? What are the different skills that are required for success in politics versus required in business? To what degree are they similar? And what are the things.
- [04:16]
A
Listen, I think it's not dissimilar to all of you in this room. You can't take yourself too seriously. I mean, listen, we're all smart, we're all lucky, we're all probably brighter than the other person. But if you actually start believing that you got to these jobs because you're the best of the business, you're going to be a loser. And I think ultimately, for me personally, one of the skill sets I have been able to do in both these worlds, both in business and in politics, is not take myself that seriously. And more importantly, believe fundamentally that both business and politics have a lot more similarities than people recognize. People always say to me, hey, Tom, how can you go from being the chief operating officer of Morgan Stanley to be the Deputy Secretary of State? Isn't that a pretty difficult thing? Not really. In most cases, the people in government think most people in business are kind of only selfish and only care about themselves. And people in the business world believe fundamentally, the people in the government just screw up and waste your money. When you have people that had both these experiences, it's just great for humanity. You can explain to people, no, not everyone in government are a bunch of jerks and want to ruin your life. And people in business aren't a bunch of sleazebags. And the combination of having both those skill sets, I think has made me a better executive on Wall street and in business, and it certainly made me a better government official. So, I don't know. I think it is. I think it's really a. It's a mindset about how you look at people in jobs. And if you treat people with respect and dignity, regardless if you're the CEO of Morgan Stanley or the vice chairman of Blackstone or the ambassador to Israel, whatever that's. Or the president of the Washington Post. Steve, you know this better than most. You know, you've got to understand your role. But you're only going to do this if you actually believe that the people around you are what, making you succeed.
- [06:08]
B
Right. Well, diving into the current events. Iran. So talk about your thoughts about how we got. I know you don't necessarily believe that Bibi Netanyahu sort of forced us into this, but how do you think we got into this? How do we get out of it?
- [06:26]
A
Well, in diplomatic terms, this is what we refer to as a shit show.
- [06:35]
B
Okay, thank you, Tom. That's the kind of extraordinary insight that we can expect from Tom.
- [06:41]
A
A lot of experience, I've been able to articulate that in a very sophisticated way. So let's step back for a minute. One thing about foreign policy, a lot of things can be true at the same time. Make no mistake, Iran is a cancer in the Middle East. This hasn't changed since the shah left in 1979. They have spread their tentacles of hate and destruction to the region since that, and it continues today. And they've done it not only through the development of their attempt to create a nuclear weapon, but. But that's beyond the point. It's their ballistic missiles. It's their proxies. They fund every evil empire inside the Middle East. It's Hamas, the Houthis, Hezbollah. The amount of cancer that the Iranians have spread through the Middle east should not in any way be diminished and discounted at any way. So that is 100% true. It's also true that every single president I have worked for and I've worked for Clinton and I worked for Obama and I worked for Biden, and Trump won. And actually going back to Bush, every single president has faced the issue about how do you stop Iran from obtaining a nuclear weapon? Okay. And Bibi Netanyahu, to his credit, okay, I have a lot of bones to pick with Bibi Netanyahu, but to his credit. For 40 years, he has been talking about the threat of Iran to the state of Israel in his office, in the prime minister's office. You walk into his office and on the wall of his office is not a map of Israel, it's a map of Iran. So this. He has been consistent about this. Everything else is secondary. He has been consistent about the threat to the state of Israel has been Iran. And he has attempted to try to convince each and every president to do what President Trump has done. What has happened here is that the president was convinced. And again, to be clear, I'm not going to be particularly political here. I mean, obviously you realize I'm a Democrat, but I don't find it's necessary to talk about foreign policy in political terms. I will say, however, when we did this thing called the. Again, most of you don't dine out of this nonsense like I do. But when we did the original nuclear deal, the jcpoa, which basically stop the nuclear programs, it wasn't a perfect deal by any imagination. Didn't deal with ballistic missiles, didn't deal with the proxies, it didn't deal with a lot of stuff, but it was a deal that Obama did. And the idea was to basically stop the nuclear program and begin a negotiation. When President Trump decided to rip up that agreement. Presidents have prerogatives. He ripped up the agreement and he made a commitment that he was going to basically stop the Iranians from getting a nuclear weapon after he ripped up the agreement. Unfortunately, this is where we are today. And the problem is, in my humble view, recall the straits of our moves, which everyone is talking about, wasn't closed a year ago. Okay? We're now fighting to open something that was never closed in the first place. And so we've got a. We got. The president, unfortunately, for good or for bad, is in a cul de sac. He did a lot of good by diminishing the ballistic missiles, getting rid of some of the nuke, you know, creating nuclear dust, which is a little bit absurd, but creating nuclear. So it wouldn't be partisan nuclear dust. But the reality of this is that the president, now, the Iranians understand that the president wants to end this war. He's made it very clear he wants to end this war. So the Iranians know that Trump is trying to end the war, but the Iranians won't let him end the war. And so we are in a very, very, very difficult place. And I, you know, I'm scared. I was in Israel a couple weeks ago. It's Very dangerous for the Israelis. The Israelis are very unhappy right now in the current situation. They, they're the victims of this. They're very unhappy. They want Trump to keep going. Trump can't really get keep going because of oil prices and the midterm elections. So we're in a very dangerous place because as we all know, my biggest fear is some huge accident is going to happen or something on purpose is going to happen, meaning one of these drones is going to hit one of our bases in Bahrain or Qatar or Kuwait and God forbid, hurt some, a number of our military. Okay, that hasn't happened yet. But when it happens, all hell is going to break loose. At that point, it's going to unleash something that I think none of us have yet to see. And that scares the hell out of me. Okay? So we're in a very, very dangerous place. And my hope is that cooler heads will prevail. The Iranians will come to their senses. President Trump will stop saying things on Monday and change his mind on Tuesday and change his mind on Thursday. I hope we'll get to get some reality put in place here to begin getting this resolved. But this is a very, very dangerous place to be in.
- [11:47]
B
Taking a step back, can you talk about why the Israel relationship is so important to the United States? And has this war strengthened or weakened that relationship?
- [11:56]
A
You know, listen, I'm a Zionist. I saw some of my fellow, some Orthodox Jews in the audience. I don't know where you guys went, but I saw you walking. There you are.
- [12:06]
B
Hey, guys.
- [12:07]
A
There are very few yarmulkes here in Sun Valley, so I'm glad to see you here. I think it is, you know, this crushes me. I was coming in here and someone had just showed me a poll that 82% of Democrats have a negative view of Israel. Okay. I mean, really. And I saw a poll that 35% of Republicans also share that view. There's going to be a vote today in the House about cutting assistance off Israel. As a Zionist, as someone who cares deeply about the state of Israel, deeply about the security of the state of Israel, it sickens me, okay? It really is a. We're in a very, very difficult place right now for the bilateral relationship. We'll get. You know, I like to tell. I gave a speech in Miami a couple weeks ago at the ajc, which is some. One of these other. I've now become a professional Jew. But one of the, at some one of these groups, and I said, you know, we're, you know, they didn't like this. But I said, you know, we're sort of like, we have to be like alcoholics. And they're like, what do you mean? Look at them. What do you mean? We have to admit we have a problem before we can deal with the problem. And we have a problem. And. But I said, we're Jews. We can figure this out. And we're going to have to figure this out, because if you're 30 years old today or younger, the only thing you know about Israel right now is the Gaza war and Bibi Netanyahu. And that's unfortunate, because the magic of Israel is this little country that was created in 1948. It is the only democracy in the Middle East. You can stand in the middle of the street in Tel Aviv and hold a sign and say, I hate Bibi Netanyahu. Bibi Netanyahu should go to jail. That's not my just saying that what the sign would say. And you will not get arrested in Israel. This is a democracy. This is the only democracy. It is our only true, true friend in the Middle East. They are our friend everywhere in the Middle East. This is the startup nation. It is a country of 9 million people, of which 2 million of them are Arabs. Okay, so we have lost that whole narrative. And, you know, someone who cares passionately about Israel cares passionately about the security of Israel. We have a huge problem, and I think we're going to have to have spent a lot of time. And by the way, it's not just the liberal Democrats. You know, some of my more conservative Jewish friends will say, oh, it's all you liberals who hate Israel. That's just actually not true. Tucker Carlson, last time I checked, is not a liberal Democrat. And so we got a big problem and we'll get through it. I believe we need new leadership in Israel. I think we need to get through this. But the security of the state of Israel is paramount. We need to make sure Israel has the security it needs to protect itself. But we are in a very, very dangerous place. You know, it's interesting, one little footnote. Iran has not shot missiles into Israel over the last 10 days. They do not want to get Israel sucked into this again because they know the amount of terror in which Israel will bestow on Iran if they have an opening here. So it'll be a very interesting dynamic here in the next 72 hours and how far this goes. But it's getting precariously close of this thing, whole tipping over into a complete chaos.
- [15:24]
B
And it's part of the problem that you have four different groups that are distinct with some overlap. You have the Israeli people, the Jewish people, you have the Israeli government, you have the Palestinian people, and you have Hamas and you have. And people sometimes conflate those. And people talk about criticizing the Israeli government as viewed as being anti Semitic, whereas if you go the other way, you're an enabler. Is that part of the problem?
- [15:48]
A
It's disgusting. I tell people I'm one of the few people that admit that they have friends at AIPAC and at J Street. I'm very close to the Palestinian leadership. I mean, one of the things I was lucky enough, I'm not ideological. I mean, yes, I'm a liberal Democrat, but I don't, you know, I came to Israel and I was like, listen, guys, I'm, you know, I'm a. I'm not a religious guy. I'm a liberal reformed Jew from Duluth, Minnesota. I'm the youngest of eight kids. I mean, my parents were like community leaders. They were the head of the UJ and the Temple and all sorts of stuff. So I came there without a bias one way or the other. I had a lot of friends of the Haredi community. I had a lot of friends in the real hard left. And the reality is Israel is a melting pot. I mean, the reality is people don't know that Arabs work side by side with Israelis in Israel. I mean, they've lost that whole set of narratives. I mean, go to a hospital, a school, an educational facility. You know, there's. As you know, the Arabs are at the heartbeat of the country. In fact, if it hadn't been for the Arab parties, the last prime minister, I had three prime ministers when I was ambassador. I had Bennett, I had Lapid, and I had Netanyahu. The only reason Bennett and Lapid were actually prime ministers, because the Arabs voted for them. Okay? So the reality is people don't know all that because it's too confusing and they hear all this stuff. The reality is the people talk about a two state solution. Like, we gotta have a two state solution. I talk about it all the time. But you have to, you have to say it. And I hope it would happen. But put that aside for a second. What Israel needs to do is treat the Palestinians with dignity and respect. And things like housing and education and healthcare and parts of the west bank need to be implemented. We lose sight because everyone uses all these rhetorical terms. Oh, we need to say solution. I believe I need that. We need to say solution. In the meantime, people need schools, need health care, and when I was so when I was ambassador, I spent a lot of time on the little things. It's like your business. It's the little things that make your business. It's not that, you know, if you, if you're in a servicing business, in a mortgage servicing business, it's making sure those, those mortgages get serviced. It's not the kind of overall arching idea of the, of interest rates is great, but you're in your business. In my view, we need to do more for the Palestinian people. The Hamas is a terrorist organization and they should be destroyed. But everyone in Gaza aren't Hamas. You know, we get stereotyped. Every idea that every Palestinian is a terrorist. That's just complete nonsense. It's like everyone in Gaza is a member of Hamas. It's complete nonsense. It's not every Israeli hates Palestinians. That's nonsense. It's the small minority that creates the chaos for the rest of us. It's a small minority of people who create the insanity in which all these wars begin. And we have to understand that you
- [18:36]
B
are uniquely suited to look at the Middle east, take a bigger view of the Middle East. How do you think things have changed with the uae, with Saudi Arabia, the Abraham Accords? How do you see that? How has that evolved and how do you see it evolving going forward?
- [18:51]
A
First of all, I give Trump administration huge credit for the Abraham Accords. And I don't know how many of you understand it or are involved like I was. But Jared Kirschner, when in Trump's first administration, I like Jared. I think he's, he's a really smart guy. I'm not sure he should be. I think he should be doing this either full time. This idea. You have a private equity fund and you're doing the diplomacy is a little bit. I wish I knew that I would never given up my stock at Morgan Stanley, but just kidding. Of course, not trying to be partisan, but he, to his credit, he formulated something which he really should have gotten the, you know, I don't know about the Nobel Peace Prize, but something close to was the first time a negotiation that occurred that the Morocco, the Emirates, UAE and Bahrain recognized the state of Israel. It was referred to as the Abraham Accords. This was a big deal because even after October 7, after October 7 in Israel, when the Hamas did the atrocities on the state of Israel, those, those three countries stuck with Israel. They never broke relationships with Israel. This is what could be. We were so close to getting the Saudis involved in the Abraham Accords. I mean, I worked, you know, you know, I was telling some report of this yesterday. I did some TV interview yesterday. You know, Lindsey Graham, I love Lindsey Graham. I mean, he was sort of nuts, but I, I really love Lindsey Graham because he, he wanted to do the right thing. He always wanted to do the right thing. And so I was sitting in the hotel lobby of the King David Hotel and Lindsey Graham, I knew Lindsey Graham because he had called me when I was Deputy Secretary of State to ask me for a favor. And you love senators who call you and ask you for favors, especially when you need them to help you on something else. I mean, it's sort of like Wall Street. So anyways, he called me and he asked me for. He had a constituent that had some sort of textile problem. I didn't know what it was, so I asked one of my staffers to take care of it. And again, I hope it was legal. Anyway, so one day he called me later, he goes, tom, you know, Lindsey, I'll never forget you. What you did for my constituent, it was really, really is my best friend. I'm like, I still to this day have no idea what I did. But he single handedly helped me get elected, helped me get confirmed in the Senate twice. He literally called Republican senators, made sure I was confirmed unanimously, both for his deputy secretary and as Israel. So he was my guy. So. So I couldn't tell my liberal friends that because they'd be really mad. So I'm standing in the King David Hotel and as you call mbs, the leader of Saudi Arabia, as you know, sort of had a bad day when he unfortunately was involved in the Khashoggi killing. Right. As you remember the Washington Post op editor letter, you probably knew Mr. Khashoggi and there was a lot of hatred towards MBS for being involved in that untimely death of Khashoggi and Biden. President Biden pledged during the campaign that the Saudis were basically terrorists and he would never see MBS and he would never spend time with MBS because he was a killer. And so Biden was coming to Israel for his 10th visit right in the middle of COVID when I was ambassador and he we pushed Biden to go to Saudi Arabia and men fences with MBS or not men fences but have a meeting and by going there would by nature. So I'll get to the Lindsey Graham thing in a minute. So we convinced Biden to go because we thought you can't be fighting with everyone right before the midterm elections. We got to make sure oil prices are stable and you know, it's all every life is politics. And Biden, to his credit, agreed to go. But he said, I'm not going to shake his hand. And it was right. Yeah, it was right in the middle of the. The COVID scene. So we. We practiced fist bumping. Okay. And. And so he. He fist bumped mbs. So we didn't have the photo of him greeting with. It was all kind of nonsensical, but that's what you do anyway. So I'm sitting in the lobby of the King David Hotel with Lindsey Graham. And Lindsey Graham, just like Biden, was trashing mbs, kept saying all sorts of nasty things about mbs. And I. He said, but he said, you know, Tom, I think there's an opportunity to normalize Saudi Arabia with Israel. I said, well, but Senator, how are we going to do that? You know, you've been trashing mbs, too. He goes, tom, wait to see what I do. He said, I'm going to do an interview in about an hour with George Stephanopoulos in the lobby of the King David Hotel. Just watch what I do. And that guy sat in that chair and he reversed himself on his hatred of mbs, basically said, you know, I think I can do business with that guy, MBS. And from that moment on, for the next two years before October 7th, Lindsey Graham spent all his energy working on getting normalization between Saudi Arabia and Israel, working with the Biden administration. He was totally into it. And then obviously, it all fell apart after October 7th because the Saudis couldn't talk to Israel, and the whole thing fell apart. But I say this because Jared Kushner created the platform of the. These things called the Abraham Accords. And then layered on top of that was the potential of Saudi Arabia. If we can get back to that, it'll be dreamy. Now we're dealing with a war in Iran, so who knows? And I think ultimately, I don't know how this is all going to shake out for the rest of the Middle east, but the reality is the Saudi piece of it could be really important. Abraham Accords was exceptionally important, and we should use that as a foundation.
- [24:23]
B
It just shows how difficult these conversations are, because when I hear about an employee of the Washington Post who was killed and chopped up with a bone saw, you know, we kind of think that guy isn't a great guy. But you have to think of the bigger picture. These are tough conversations. So you talked about October 7th. So you were watching a preseason basketball game in Dubai, NBA basketball game, and Jack Lew had been named but not confirmed as your replacement as ambassador to Israel. And you found out about October 7th. Can you take us through what that was like, what happened, what you were asked to do?
- [25:00]
A
It's even worse than that. So I'm in the. The Timberwolves. We were playing the Dallas Mavericks in the first exhibition game in Abu Dhabi, and Miriam Adelson had just bought the Mavericks. I knew that, but no one else knew that. And she invited me, and we get into the whole Miriam Adelson schtick in a minute, but. So she invited me to come to Abu Dhabi for the game because Timberwolves, I'm from Minnesota, and says, this is going to be cool. So we're sitting at dinner in Abu Dhabi with all the players from the Mavericks and the Timberwolves, and I have all the diplomatic corps from the Middle east, and I have a bunch of Jews from Israel, and I've got the UAE ambassador who was instrumental in the Abraham Accords, Yusuf Al Otaba. And I stand up and I'm toasting the success of the Abraham Accords and Long live the Abraham Accords and blah, blah, blah. And I'm like, going on and on and on, probably too long. And two hours later, our phones start lighting up that there's something really crazy going on in Israel. Like, really crazy. Like crazy like we've never seen before crazy. And it just was the beginning of what we saw play out. And so all of us left. We. None of us obviously went to the game the next day. We all got on planes. I flew back to, you know, I felt terrible because I just left a month earlier. My wife didn't. My wife runs cnn, so she was like, your next wife can follow you to Israel. It's like sort of going up like the, you know, Mount Everest. But she didn't want to go, and she visited me, however. But. And so I left early. And I felt terrible because my dcm, my deputy, was in charge, and she was a really great diplomat. This happens to be now the ambassador of Harem. So she was dealing with what arguably was the biggest crisis the state of Israel has had since the beginning of the country.
- [27:11]
B
Okay.
- [27:11]
A
I mean, the amount of just terror. I mean, I had three or four friends who lost their kids at the festival. And for. For all of you to remember. I don't. Again, I don't. I don't. I can't imagine all of you spend much time thinking about this, except for my friends back there. But the reality is, is, you know, what happened on. On October 7th since that. That no Long larger number of Jews were killed in a single day since the Holocaust on that day on October 7th. Okay. And it wasn't just the killings of the Jews and Arabs, by the way, on October 7th, the kids that were in that, at the concert, it was like Burning man. Okay? They went to this concert to show you could have a concert at the Wall, the fence dividing Israel to Gaza. It was a bunch of kids having a fun time. These were not protesters. These weren't like, are kids getting high and having fun and listening to music? It's just sickening on what Hamas did on October 7th. And then not only the brutality, the number of people that were killed, but the brutality of ripping all these people and bringing them to Gaza and shoving them into tunnels. And it is beyond anyone's imagination. And for all of us, I think all of us in this room have had tragedy. You wouldn't be. All of us have had some sort of tragedy. Right. We all have it. This is a level of tragedy that I don't think any of us could ever, and God forbid, ever endure. You know, I spent a lot of time with the hostage families who basically woke up every day just trying to get their kid back. And then I had my friend Ruby Chenz, who's all. He wanted his kid's body back. He knew that the kid was dead. He just wanted his body back to bury him. You can't. Again, I don't mean to get on this, but, you know, so the level of what happened on that day will change Israel forever. Forever. And that's what, you know, for me, as the former guy, I felt a little bit like. So I basically then spent the next six months just working on behalf of the community and trying to raise money and do the things you do when you can't be there on the ground to help.
- [29:25]
B
Thank you. So shifting gears a little bit, thinking about Doge, and you were obviously, or the deputy director of State Department, and you've seen what's happened. 300,000 federal workers cut in just the first year and a half of the Trump administration. Only 28 of the 150ambassadorships are filled. For people on the right, they might say, well, we've discovered massive inefficiencies because the world seems to be working fine. Have these efficiencies that have been uncovered, or are there things that we're going to regret later on? What's your view of this?
- [29:57]
A
Listen, I. Again, I'll try to be disciplined here. I think Elon Musk is a brilliant guy. Okay, listen, SpaceX what he's done on Starlink, what he did on Electric Car, I mean, no one will take away from it. But I thought what he did on Doge was disgusting. Now, I don't blame him. I blame how they did it. To be clear, the President of the United States that cut more civil service jobs in any president United States was Bill Clinton and Al Gore. Al Gore was in charge of reinventing government. I was involved in this, okay? He actually replaced more government employees than Elon Musk. There's a way to do this and there's a way not to do it. Is there waste at the government? 100%. Is there waste in bunch of your companies here? Yeah, probably. I mean, maybe I don't take it personally, but just hypothetically, okay, yeah, okay. There is a way of doing this and there's a way of not doing this. Okay? The reality of this is to pick on the civil service of our country. It makes me sick to my stomach. Okay? The men and women who wake up every day want to do the right thing. Are there bureaucrats who slow things? Sure. But the vast majority of the people that I work with want to do the right thing. And do I believe we can do things better and faster? 100%. Let's just take an example, okay? USAID. USAID reported to me, I was a deputy Secretary of State. What people don't understand about usaid, usaid, which is not perfect and needs reform. I get all that. But USAID represents to our country soft power. You know what soft power is? Hard power is our military might. Soft power is what makes America America. It is what distinguishes us from China. It's what we do in countries and how we make countries better. And it's not just what George Bush did with using USAID to eliminate AIDS in parts of Africa. It's everything in between. It's water, it's democracy building, it's community building. The guys who were the most biggest advocates for USAID, the U.S. military. I used to call Dave Petraeus. Every time I had to testify in the comments, I said, general, I need your help. He goes, count on it. I will go and sit next to you and advocate for the support of usaid. Because my strategy is very simple. The military can clear, right? They can clear enemies out. But to hold them takes the guys in the short pants, you know, the soft power guys. That's the only way. And by the way, we're learning this lesson right now in real time in Iran. The only way we're going to end this thing in Iran is You can blow the bejesus out of them, okay? But we're going to have to have a diplomatic response. That's the only way you can get at the end of the day, long term peace is through diplomacy. You can't bomb your way into peace. You can get them to the table, but you better have a program. We learned that after World War II. We've learned that historically, we've learned this everywhere. And so the idea, you come in and you say, you know what, USAID sucks. Let's just shut it down, really. So I think ultimately reforms need be needed. To be clear, I have no problem with doing reforms. I have no, I've listened. I have fired sadly, way many people in my jobs that I've had running several financial institutions. I get how to do this. I know it's not perfect, but I think how they conducted themselves and how they did this, I think we'll be paying a price for this for a very long time.
- [33:48]
B
Are there particulars? USAID is one. Are there particular areas where you think the cuts are going to bite us?
- [33:56]
A
Listen, I think it's, I go back to, I think again, people say, I don't care about Voice of America. Who cares? Well, I'm telling you guys, when you wake up and you realize where the staining of America is around the world, some of this is, yes, part of this is somewhat of, you know, President Trump's style. It's somewhat different than some other presidents. I appreciate that. Some of it is the pressure he put on, rightly, rightly on NATO to spend more money on their own defense. Totally support that. But I think the reality of this is, is that if you look across our government and the things that we do internationally, I'm on the board of a thing called the irc, the International Rescue Committee. The job is basically to help refugees who resettle here in the United States and help refugees in countries, in war torn countries. The budgets has been dramatically reduced because obviously we're not letting refugees come in the United States anymore. And how we use those money as overseas, these organizations are really, really important guys. At the end of the day, what made America America was our kind of, you know, we were the, we are the shining, you know, light on the, on the mountaintop, as Ronald Reagan used to say. That's, that's what made us who we are today. And again, I'm not being critical about the administration, but I do think ultimately we got to get back to a little bit of that. And maybe we went too far. Maybe we were too open Maybe we were to this, but I think ultimately, for our country to have the strength that we need, we need the soft power as much as we need the hard power.
- [35:31]
B
And so, speaking of things generally viewed as helpful, we asked NATO countries to spend more on defense, and that's. And then they're doing that. So does that make us safer or less safe with a more militarized Europe?
- [35:47]
A
Listen, you know, you look what's going on here. We have a raging war going on in the Middle East. Do I want to remind any of you, we also have a massive problem with Russia, Ukraine, you know, we're not talking about it very much, but it is, as quite frankly, that is a bigger threat to the security of our European allies than the Iranian capacity to get a nuclear bomb. Okay, we're not talking about. Because it was supposed to be resolved in the first few days of the Trump administration, but sadly, these things are really, really complicated. And the Ukrainians aren't giving up, and the Russians aren't giving up, and the more the Ukrainians push the Russians, there's a chance that Putin may say, I gotta go much more aggressive, and then all bets are off. Okay, so do I think a unified NATO is helpful? Yeah, I do. I mean, I didn't like the idea. I really didn't like the idea that when President Trump picked up the phone and called Macron and Stallmer in the UK and Macron in France and said, I need your help on Iran at the Straits of Hormuz, that he got basically the Heisman. Okay, I don't like that. I don't. I think the American President, he picks up the phone, this is what our NATO allies are supposed to do, are supposed to help us. And I think this. This is maybe this may be the future that we're at. And much of this is for a whole variety of reasons. It's fighting around things like Greenland. It's about Iran, it's about Ukraine, Russia, it's about Zelensky. That's very complicated. But the end of the day, a strong European allies, a strong NATO is good for the United States, make no mistake. Yes, we pay too much. They need to pay more. No question about it. But we need their help. We need their support, and we need to be working collectively, together. Breaking up NATO is a terrible idea. Weakening NATO is a terrible idea. You know, at some point, the United States needs the support. It may not be the military support, but we need the support of our NATO allies.
- [37:50]
B
Do you. How confident are you in the alliance structure being able to survive and Related to that, what do you think the chances are of a military conflict involving
- [38:00]
A
Taiwan on well, it survived. Listen, again, not to mean political, but President Trump will only be in office for two more a year or two. Not clear, but probably I could actually give you the hours, but no, no, but. So I, I don't think even the next Republican president, if a Republican becomes president. I, I don't think this is. He's taken a very unusual position as vis a vis NATO personalized the relationships in a way that might be. I don't think that any Democrat Republican president necessarily is going to follow it now. He set the standard on the idea of them paying more for the defense. And I appreciate the thing about President Trump is that people have this Trump derangement syndrome. Like everything he does is terrible. That's not true. And I've tried to be somewhat balanced. That is not true. But the problem is he does do things and then he goes to one click too far and that kind of dilutes some of the good that he's doing. And getting NATO to spend money on the defense was quite good. I think ultimately next personalizing his relationships with some of these NATO leaders and demeaning them probably not so good. But we can talk about that later. China, in every security meeting I was in have been in, it was clear the Chinese have a goal of taking over Taiwan. Make no mistake, they believe it belongs to them. We've had a very kind of delusional kind of idea how we talk about Taiwan. All of our assessments were that in 2027 that the Chinese would in fact go in and try to take Taiwan. That was basically the assessment during the Biden administration. I'm not expressing anything that hasn't been reported. I don't think or I'm going to go to jail. But I think that was clearly the intention of the Chinese. A lot of things have happened since then. One was obviously Covid and the COVID shutdown had huge financial implications on the Chinese. The Chinese real estate market completely collapsed and had also huge impact impact. President Xi purged his whole security apparatus because he felt that the, the military operation that around him wasn't efficiently loyal to them. In focus. I think ultimately President Xi has enormous amount of desire to take Taiwan. I do not believe he will do this in the next year or even the next two years. The reason for it, in my view, and by the way, I could be, certainly could be wrong. He needs to fix his own fiscal house. You saw the GDP numbers today in China. It dropped dramatically from last quarter. He has an aging population. He obviously wants to do what he wants to do and succeed in AI. He's probably doing a better job on thinking about jobs around AI than we are in the United States. But that's still a hugely significant issue. So I think ultimately his desires are clear. The real question is, will he take Taiwan now because he thinks there's an opening because he has Trump maybe do. I think when Trump was in Beijing four weeks ago, when he was in the middle of this whole Iran negotiation, they didn't have a little pull aside, said, listen, President Xi, buddy, I, I need your help on Iran, because he knows that the Iranians only care about the Chinese because they want to buy their oil. And do I think, at the same time, do I think that President Xi said, you know, big guy, I need your help on Taiwan, meaning don't sell them the arms that they already had. Congress already approved them. I think both those things are true. So ultimately, I think that he will not go at Taiwan in the short term, but the desire there is there, right?
- [41:47]
B
So one thing, I'd love your thoughts on that. You know, the theory the Supreme Court has of this sort of powerful executive, that the president should be more powerful, and the recent things with the election committee where the president can now fire bipartisan, you know, basically fire all the Democrats in certain committees. Not there are certain protections still. But do you worry that in terms of predictability, I think about, you're all real estate investors and investors want predictability and our allies want predictability. Is there a problem with more powerful executives? That we could just have pendulums that swing back and forth and people, business people and our allies can say, I don't know, I may trust you, but I don't know what's going to happen in four years. How do we recover the trust of allies and how do we deal with this? From a.
- [42:37]
A
Listen, I, Listen, I, you know, Willie and I have had this conversation before. Listen, this is, this is problematic. I mean, listen, good news is the court did step in on the Fed, okay? I don't think Trump is going to necessarily stop his badgering. I think, quite frankly, in my humble view, I think Kevin is going, Kevin Warsh is going to be very similar to Jay Powell. They have the same temperament, the same ideal. I think they're going to have, basically, Trump is going to regret the idea that somehow that Kevin Warsh is going to browbeat the Fed governors to lower rates anytime before he believes it's ready. And obviously, the Fed's certain goal is to Keep inflation in place. Kevin Warsh basically has said that ultimately, I'm sure the rhetoric is going to get cranked up even more so with President Trump when he realizes that probably Kevin Warsh is going to actually march to his own drummer. And I think it was reinforced by the Supreme Court's decision that they couldn't fire the cook. And ultimately, I think that's good for all of us. It's good for humanity. By way, it's good for if the next Democratic Democrat wins the presidency. I think that's really important. I think this whole issue of presidential powers is one of the issues that no one's really talking about. Because here's what's going to happen, folks. If a Democrat wins the White House in 2028, guess what they're not going to do? They're not going to say, oh, you know, all those presidential powers that Donald Trump gave had gotten, I'm going to give them back. I'm going to give them back to Congress because I don't really believe in a strong presidency. Bs okay? The next Democratic president is going to basically take those powers and do the things probably that many of you in this room are not gonna like, because they'll say, we're gonna have to reverse a lot of the stuff that Trump did. And so I think this is like, this is the one little thing that people don't talk about, because I've seen this happen. Listen, Biden did a lot of executive orders when he became the White House. And to a point that people were like, oh, I think he actually had done more executive orders than Obama had done. And Trump in the Trump first administration, and now Trump obviously double down on that in his second term. So I worry about presidential powers because we need balance. I mean, we need balance. I don't. Listen, I would, you know, I can't say this to my friends, but I don't think having a Democratic president, Democrat Senate, Democratic House is necessarily great, okay? You need people to have checks and balances. And this is why I think ultimately, if the House become gets into Democratic hands, which I predict will happen, I think it's just better to have some checks and balances now. It's not going to make Trump particularly happy, but I do think there is some of that. But I do think this issue about presidential power and his ability to fire anyone is not great, especially in these jobs like, you know, the FCCC and the SEC and you basically, you know, the idea of having some bipartisanship is important, and because they disagree with you, you fire them. I don't think it makes our business any easier because you're 100% right. These massive swings. You can't do a five year business plan when you're not sure exactly who's going to be running the regulatory agencies that you guys are trying to manage through. So I don't think it's great for your business, I don't think it's great for humanity. But I don't see any idea that this is going to change under the next president either.
- [46:03]
B
So shifting gears because we have a real estate audience. You are vice chair of one of the largest real estate owners.
- [46:09]
A
The largest.
- [46:09]
B
The largest. Who's counting?
- [46:11]
A
Just saying.
- [46:12]
B
Just saying. So you don't sit there directly under you, but you talk to investors a lot. And so what are people saying? Where do you think the big opportunities are? Where are the problem areas? How worried are you about private credit? I know you have a balanced portfolio, but what do you think?
- [46:28]
A
Well, okay, so step back. Listen, you guys are real estate guys. You know Blackstone's positions, obviously, you know, we had a very tough, you know, four or five years and in our B REIT business there's a lot of anxiety among our investors. Liquidity and everyone thought the world was going to come to an end. Since we are the largest real estate owner in the world, obviously we have huge exposure to multifamily and single family and commercial properties. We have only 5%. Just saying 5% of our portfolio is in offices. Sometimes it's better to be lucky than smart. But we have a massive exposure around the world. We got through that period of time, like many of you in this room, we got through the period of COVID and we've now seen a huge uptick in our real estate. Not only inflows of cash coming in, but even the performance of some of those assets. Yes, we have plenty of assets still need to be worked through. But ultimately the fundraising in our big funds have dramatically increased. And you know, we are very much focused on hard assets. As you know, we are the largest developer of data centers in North America. We own a company called QTS which is in massively took a public company, turned to private, bought it for like $20 billion. We now probably is at worth 100, $125 billion. We bought a company in Austria called Air Trunk. So we are very much focused on hard assets. Not just data centers per se, but our infrastructure fund which includes everything from ports to airports. And then of course the energy to drive those data centers. So natural gas, the alternatives. We own a Big alternative Wind solar company in Illinois. So we are very focused on the surround sounds on the platform. So we feel pretty good about the real estate business today as it sits, sits. Obviously we'd like rates to come down. It would make our business even feel a little bit better. So we could actually sell some of these assets. But we feel quite, quite positive on private credit. It's funny, it's sort of like the B read of it all when everyone's crapping over the B region. Since we are the largest private credit player in the world too, we sort of like someone gets a cold and we get the flu or something like that, I guess. And also ultimately, you all know, guess what? Private credit isn't going anywhere. I know that's shocking to people. It's been around for 20, 25 years that as long as private credit performs better than traditional, some fixed income assets, we're going to be doing just fine. Are there going to be disruptions in the private credit business? Sure. We have exposure to software companies like everyone else does. We have a smaller percentage of it, but we've seen a little bit of disruption. But I like to remind people, and I want to be disciplined here maybe, but the people who have been screaming about the private credit business that the hair is on fire and the world's going to end were the big banks. And they're my friends. We love all the big banks. I love Jamie Dimon. I think he's a phenomenal executive. He's done a great job, but he's been the biggest drummer of the beating of the private credit business bubble. One of the reasons is he sort of wants to get back into the business. As you know, the banks were pushed out of the private credit business during ccar and the cost of doing that business became very difficult for them. They want backend. So I think ultimately the private credit business, as you see in inflows, the people who hit the sell button on private credit were our retail clients. Many of you in this room, I'm sure, got a little bit panicky. The people who stuck with it are the institutional players. They like the returns, they like the stability. So we feel pretty good about private credit. But like everything else, it's like, you know, B reit, it'll come back and things will get stabilized. But when you have a company like Blackstone, which you have a trillion, 1.2 trillion, you know, of assets under management, they have all these different asset classes from everything from data centers to Jersey Mike's, you know, it's not a bad business to be in. And it's all about diversification.
- [50:40]
B
So Willie talked yesterday about this idea of who's going to win, the stock market or the consumer. The idea is that consumer confidence index is the lowest level it's been in 60 years. And yet the stock market goes up and up. We see the famous stat that 37% of Americans couldn't handle a $400 surprise. And yet over the last year and a half, their costs have gone up 6 to $12,000 and wages have haven't kept pace. So there's this massive income inequality, there's this change, there's a shift. And you see this, not surprisingly, with this kind of disparity of rich getting richer, poor getting poor. You see these socialist waves of these kind of, some of them sort of crazy socialist. The woman in New York who says she's not sure that murderers should be incarcerated. So what do you think? This, how worried are you about income inequality? And what do you think about the police, political ramifications of that?
- [51:32]
A
It's a problem, but it's been a problem for the last 50 years. This is not unusual, guys. I think where it's going to manifest itself is how they deal with AI. I'm sure you've done a bunch of AI stuff at the conference, but to me, that is really where this is going to matter. It's certainly already been manifested in people's distrust about data centers. Now, most people don't know what a data center is and they're like, oh, because it's this machine, they think. And it's, you know, there was this poll that done last week by Pew that said the more people are likely to want a nuclear power plant next to their house in a data center. Okay, so that is not about the data centers. That's about people's anxiety about AI, about what's going to happen to their job. And it's not about blue collar jobs. I was at, I worked in the Clinton administration. I did nafta. And everyone was worried about Ross Perot calling me and saying, oh, I hear the sucking sound of jobs from US to Mexico. It's not about blue collar now. It's about white collar jobs. It's about kids who are graduating college. Like many of you in this room are, like, fearful what your kids are going to do. And it's people trying to figure out what AI implications it's going to have. We all talk about productivity. Productivity is a shorthand. We're doing more with less and less. Is a lot of people in this room or People who work for us. So that is, to me, this is what's going to be the number one issue in the 2028 election. It's not going to be Israel. It's going to be how politicians talk about AI and talk about what we're going to do. And that's going to manifest itself in this whole issue about economic inequality, job anxiety. That's all people care about. I mean, people don't. I mean, yes, they care about Iran and they care about Afghanistan. I mean, you know, they care about Ukraine and they care about. But at the end of the day, they care about their family, they care about their food, they care about their education, they care about biological buying a house. And they're worried, and they're really worried about what this thing, what AI is going to mean for their lives and how people. And so politicians are going to have to wake up and we're going to need regulation around this in a way that people will feel more comfortable around it. And so that's how it's going to math itself. But, yes, 100% richer are getting richer. We've all had a very good, great few years. That is not new. But how you talk about it is going to be really important. And that is, by the way, how Donald Trump got himself elected. Donald Trump got himself elected by convincing people that he was going to fix the economy, that Joe Biden was too old and too feeble, and he was going to do two ways. He's going to bring down inflation, make the economy better, and he's going to stop illegal immigrants coming in and taking your jobs away. And he was really successful in articulating that. And that is why he's at 35% approval rating, because people are not sure that's actually happened yet. So this is going to be the fight. And by the way, the fight with the Democrats are going to be the left saying we should do way, way more. And the moderate parts of the Democratic Party said if you do that, you're not going to get electable. And that's going to be the big fight among the Democrats. And I have no idea how it's going to come out. Can we do one thing before we do? Yeah, we got one thing. So I do want to just spend a second talking about your book, because I think it's for me and I know I wasn't supposed to do this, but I want to do it anyway. Your book is about how, like, alpha people, people who are like us in this room, are successful business leaders, how we transition from Being successful business leaders to being fulfilled individuals. So I don't, I haven't obviously read the book, but you have a lot of people who wrote blurbs about the book. Just spend a minute talking about your book for a minute.
- [54:57]
B
I know this is how Tom became a politician.
- [54:59]
A
I'm done with this. Okay, I've done talking, but I'd like to hear now.
- [55:02]
B
I'm going to.
- [55:03]
A
Now I'm talk about the book.
- [55:04]
B
Now I'm to going owe him a favor after this. You see how it works?
- [55:07]
A
Okay, Just talk about your book.
- [55:09]
B
So it's a little bit like, I think, what Albert Brooks was talking about. If you want to check it out, there's thealphatrap.com you can go there and actually do an assessment of to what degree you're an alpha and to what degree you potentially have what aspects of your life you can fill in. I interviewed about 100 people, all sort of alphas. Willie was one of them. And talked about what's made you successful and looked at the biology of it, what's made people successful over time. And then what gets in your way of connections, of happiness, of fulfillment. And sometimes those same drives actually don't serve us well, particularly in sort of the second chapter. And so it also talks about people and examples of people, of what they've done, specific practices of how people have. Have done that. So if you want to go to thealphatrap.com
- [56:01]
A
what are the couple things you recommend people to do? Let's assume, hypothetically, all of us cannot be as successful as Willie is. But hypothetically, some of us are somewhat successful. How do you do that?
- [56:13]
B
So one thing is there's a thing on this, on the website you go to. It's a wheel. It identifies what are the gaps. Are your gaps between your current state and your desired state. Is it about health? Is it about your relationship with your friends, relationship with your spouse, contribution, inner peace? Trying to first identify where the gaps are and then practically, how do you close those gaps. The tendency is even though maybe success and status and money isn't what we need more of, we're so used to trying to achieve those that we keep striving against the same things as opposed to looking at things that offer more balance.
- [56:51]
A
This is a guy, by the way, just a record, who was the president of the Washington Post. An unbelievable success. Then started my kid took a class from him. He teaches at Georgetown. My best class my son has ever done. Also writes music, also things now writing a book. So he's got this down. So I was, I was. Well, you're very, you better buy the book when the book comes out.
- [57:11]
B
Yeah, you're very kind. You're very kind. So, so I'll just ask Tom one last question or a couple of questions. So the first is one. So do you have a front runner for the 2028 on the Democrats and on the Republican side? Do you have any predictions?
- [57:29]
A
I'm going to make a prediction on the Republican side first. Dave McCormick is going to run for president. Okay. I don't know this for mis telling you, Dave McCormick will be a very interesting I know everyone talks about J.D. vance and, and Marco Rubio. You know, I think there that he is I don't even know if he's going to run. But I'm telling you, I think Trump's going to be there today in Pennsylvania doing an event with McCormick, doing something else. But he'll be a very interesting candidate, former Marine Ranger, you know, Pennsylvania, he could be he'll shake up the Republican primary ballot. So that's think about that. You won't remember I told you that, but when it comes to, you'll say, I don't remember that guy. I don't know what his name is on the Democratic side. Who the hell knows? We're going to have 18 people running on the Democratic side. You're going to have six governors. You're going to have the governor from Pennsylvania, from Illinois, from Kentucky, potentially from Maryland. You're going to have four or five senators. You're going to have people like Rahm Emanuel. You're going to have, you know, who knows if you know, Mark Cuban. You're going to have, you're going to have, you're going to have all sorts of people getting on the Democrat side and there's going to be a fight in the Democrats side, as I just mentioned, between the people on the left. There's going to be someone on the left. It's going to be someone like AOC or someone like that who's going to flurry around and get a lot of attention. And ultimately, I don't think that person will emerge as the nominee. But you're going to have a big fight among the Democrat Party and you're going to have a big fight in the Republican Party because J.D. vance is going to believe that it's his to get because he's J.D. vance. Marco Rubiok, very clever. I predict that Marco Rubio, by the end of this year, you're going to see stories in the New York Times saying Marco Rubio is thinking about. He needs he's exhausted. He needs to spend more time with his family. He needs to step back from being secretary of state, national security advisor. And he's going to leave to spend more time with his family, which means he's going to end up running for president because he got to get out of the administration. So I think you're going to have a lot of interesting dynamics. And just remember this one thing. Every election is a reflection from the last election. So. So who the Democrats Republicans pick will be a reflection upon what people believe Donald Trump did or didn't do going into the next election.
- [59:44]
B
Well, Tom, thank you for your extraordinary wisdom. Your thoughts. Appreciate your time.
- [59:47]
A
Thank you guys very much.
- [59:49]
B
Thanks, Tom. Sa.