S1 | Public Policy

Amie Parnes & Jonathan Allen: “Lucky: How Joe Biden Barely Won The Presidency" | SALT Talks #179

“It was all eyes on South Carolina, but more importantly, the Jim Clyburn endorsement. That wasn’t a sure thing. Clyburn had some concessions including the fact that he wanted Joe Biden to nominate a black Supreme Court justice.”

Amie Parnes and Jonathan Allen co-authored Lucky: How Joe Biden Barely Won the Presidency, their third such collaboration. Parnes is the senior correspondent at The Hill where she covers the Biden White House and national politics. Allen is a senior political analyst at NBC News Digital, and is a winner of the Dirksen and Hume awards for reporting.

Despite receiving over 7 million more total votes, Joe Biden ultimately won the 2020 presidential election by margins even thinner than by which Trump won in 2016. This is due to the nature of the Electoral College and the role a handful of swing states play. Republicans took a laser-focused approach to deciding and executing a path victory whereas Democrats created several paths. For Democrats, the race was much closer than they ever expected. “If 22K of Biden’s voters [across GA, WI and AZ] had flipped to the other side, Donald Trump is president again.”

Early in the Democratic Primary, Biden didn’t receive significant support from the establishment in which he’d been such a powerful figure. Biden effectively navigated the Democratic Primary by placing himself between the far left wing of his party and Donald Trump, ultimately lifting himself above the fray at times. Biden performed badly in the early states and was desperate to get to his firewall state, South Carolina, where Jim Clyburn’s endorsement gave Biden’s campaign a much needed boost. “Clyburn had some concessions including the fact that he wanted Joe Biden to nominate a black Supreme Court justice.”

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SPEAKERS

Jonathan Allen.jpeg

Jonathan Allen

Senior Political Analyst

NBC News

Amie Parnes.jpeg

Amie Parnes

Senior Correspondent

The Hill

EPISODE TRANSCRIPT

John Darcie: (00:07)
Hello everyone. And welcome back to salt talks. My name is John Darcie. I'm the managing director of salt, which is a global thought leadership forum and networking platform at the intersection of finance technology and public policy. Salt talks are a digital interview series with leading investors, creators, and thinkers. And our goal on these salt talks is the same as our goal at our salt conferences, which is to provide a window into the mind of subject matter experts, as well as provide a platform for what we think are big ideas that are shaping the future. And we're very excited today to welcome two co-authors to salt talks who wrote a brilliant book about the 2020 election. Uh, those guests are Jonathan Allen and Amy Parnas. Um, Jonathan is a senior political analyst at NBC news digital, a winner of the Dirksen and humor awards for reporting. He was previously the white house bureau chief for Politico and the Washington bureau chief for Bloomberg news.

John Darcie: (01:01)
He appears, appears regularly on national television television programs and as the author of multiple books, including his most recent book, lucky that we're going to talk about today. Uh, Amy is the senior correspondent for the hill newspaper in Washington, where she covers the Biden white house and national politics. She was previously a staff writer at Politico where she covered the Senate, the 2008 presidential election and the Obama white house. She also appears regularly on national television television programs. And as the co-author of the book that I mentioned previously called lucky, uh, hosting today's talk is Anthony Scaramucci. He's the founder and managing partner of SkyBridge capital as well as the chairman of salts. And with no further ado, I'll turn it over to you, Anthony, to begin the interview.

Anthony Scaramucci: (01:47)
Well, first of all, guys, thank you so much for joining and you, you know, I'm not that self promotional, right? So look at me holding the book up here for everybody to say. So a book is a brilliantly written. It is a great narrative and it's a page Turner. You can't get to the end of the chapter without wanting to take a peek into the next chapter. And so even though people know the ending of this book, uh, it's, it's a very compelling story. So I want to start with you, Amy. Uh, why did you title the book? Lucky? Why was Joe Biden? Lucky?

Amie Parnes: (02:21)
That's a very good question, Anthony. And thank you for having us. Um, I think that it's funny, John and I got into a little bit of a back and forth over lucky. Um, but I think, you know, cause some people say, what do you mean lucky? What do you mean he barely won? Um, and I think they're looking really at the popular vote. You know, everyone is so proud of the 81 million number, but what John and I do is we take a closer look, we take you inside the campaign, obviously, but in the very end, um, the margins were a lot tighter than even 2016 and Joe Biden ended up winning by 43,000 votes. So when people say 81 million that's it's right, but it's not really accurate about how we run our electoral system, which runs on the electoral college. Um, and so that was actually ended up to be a very tight election of me end

Anthony Scaramucci: (03:12)
43,000 votes. And just for our listeners, uh, you're talking about swing, state electoral activity on the margin he won by 43,000 votes in approximately four states. Is that

Jonathan Allen: (03:26)
Yeah, it's three states is Georgia, Georgia, Arizona, Wisconsin, um,

Anthony Scaramucci: (03:32)
Thousand in Georgia. And what were the totals in Arizona and Wisconsin? Roughly 15. Yeah.

Jonathan Allen: (03:37)
Yeah, roughly roughly 15. Each one of the states was a quarter of a point. One was a third of a point. One was two thirds of a point. Um, you know, we're talking about an election where 158 million people voted, you're talking about Trump needed 43,000 more to win or that they think about it differently. If 22,000, essentially 21,000 of Biden's voters in those three states had flipped to the other side, Donald Trump's president. Again,

Anthony Scaramucci: (04:03)
It's interesting. Cause I, you know, I recommended the book over the weekend, just holding it up again, lucky, um, how Joe Biden barely won the presidency. I recommended it to Dick Gephardt over the weekend because it's, it's a compelling story, but it also tells you how razor thin things are in the United States. And before we get into the nits of the book, I just wanted to ask you a quick question about the Republican strategy because you know, Jonathan, it seems like the Republicans have read your book or knew the book because they're sitting there with the 43,000 votes and Lindsey Graham saying Trump plus a and his idea is Trump plus will get us back to the presidency and possibly retaking the house, the notion that they can dig up instead of expanding the base, they want to dig deeper into the base, uh, and find more and more quote unquote maggot people. What's your reaction to that?

Jonathan Allen: (04:58)
I mean, I think Lindsey Graham is as often he is reacting to the moment I was skeptical of the degree to which Donald Trump could be successful in a second presidential election by finding more of the mag of people. I mean, like I just dig deeper, seem to me to be a bad way to go about winning an election, uh, after the last time. And yet he expanded his electrode significantly, or I should say deepened, his electrode significantly 74 million votes this time. Uh, it had been 62 million, I think the previous time it's just that the democratic side grew so much, but one thing Republicans are very good at is understanding the rules of the game that they're playing. And if a presidential election of an electoral college, uh, game is essentially a chess match, there are a lot of Democrats that are trying to win by kicking field goals.

Jonathan Allen: (05:49)
They're like how many voters can we get? And we see what goes on in these two camps that Democrats are always talking about. Here are three or four paths that we could take to win the electoral college majority. And the Trump side is always talking about what is the path that's most likely, how and how do we optimize that pack? And this time the Democrats won, but I think most Americans were surprised by the closest to the race. If they looked at it, it took four days to call this racing. I mean, and anybody who says this wasn't a close race is not close to what was going on inside the campaigns where both of them between 9:00 PM and 11:00 PM on election night, didn't know how it was going to come out until Fox called Arizona, which changed things a little.

Anthony Scaramucci: (06:32)
Yeah. And they stayed with that call, which I thought was interesting despite the pressure from, uh, uh, the president's campaign. Um, you know, it's interesting because the last time I spoke to president Trump, I can tell you it was, uh, Easter Sunday. Uh, it was April 21st, 2019. He was yelling at me saying, cause I had just written a article that the press was not the enemy of the people. I know you two don't look like the enemy to me. I wrote an article. It was, it was published in the hill. Uh, he yelled at me and he said something to me, Seminole, that I'll share with you. He said, yeah. I said, well, sir, aren't you trying to expand the base and go after independence and moderates? He said, no, I'm working on the base. I'll let everything else take care of itself. It was an interesting strategy as you point out, he almost won it using that strategy. Uh, but let me ask you, do you think that, uh, Joe, Amy, do you think that Joe Biden would have one without the pandemic, without the widespread mail-in voting?

Amie Parnes: (07:33)
I think it's something that definitely contributed to his win. Um, and I think as we reported in the book, what's really interesting is we have a lot of, obviously on Joe Biden, but we have a lot on Donald Trump too. And, um, there was a point in February of 20, 20 last year when Brad Parscale Trump's campaign manager went up to him in the oval and basically said, this pandemic is going to be your undoing and Trump didn't ticket seriously. And he said, what do you mean this has nothing to do with politics. Um, and so you look at a moment like that and it's sort of revealing, um, on one hand I think the Biden campaign kind of took advantage of it. Um, they used it to their advantage by kind of keeping him, um, inside and, um, you know, parading the whole, which, which was, is the right thing to do obviously, but parading it around like he's inside and he's, he's taking all the health precautions. Um, but I think we have a quote in the book, um, that talks about Anita Dunn telling an associate COVID is the best thing that ever happened to him because what it did was it essentially, um, kept him off the campaign trail. And, um, we all know that he is prone to making gaps and this sort of kept him from doing that and kind of embarrassing himself, which is a concern that a lot of Democrats had at the time,

Jonathan Allen: (08:55)
From there on conversely you've got, uh, president Trump out there everyday, um, you know, taking charge and, uh, and telling people that they should inject disinfected. Um, you know, th th he had those daily briefings from the white house when, at a time when even the scientists were in some disagreement about where this thing was headed and what to do about it. And there's the president giving advice like, um, you know, as if you were an epidemiologist, uh, but an epidemiologist who's giving bad advice. And so it highlights that the sort of, uh, contrast that Biden would want, which is Biden is not out there making mistakes. And Trump is out there making mistakes.

Anthony Scaramucci: (09:33)
So, you know, before facing off with Donald Trump Biden struggled, and th this is a great part of the book, which, uh, I was actually reading last night, he's getting destroyed in places like Iowa, New Hampshire. And now he's coming down to the quote unquote firewall. Tell us about that situation. Tell us about that seminal moment, which seems like it was the huge inflection point in his ascendancy to the presidency.

Amie Parnes: (10:03)
Well, he, um, he obviously wasn't doing so well. We all know that he was losing an Iowa came in fourth, came in fifth to New Hampshire. There was a moment in time where they actually discussed whether he should refinance his house because they were running out of money. I think at the low point, they had 1.5 million, which is not a lot of money to run a campaign. And so they, you know, even Biden was sort of trying to convince people to hang on, obviously his aids, where he told his own wife, Jill Biden, hang on until South Carolina hang on. Um, so obviously he had a lot of doubters around him. Um, but so he gets to, he goes to Nevada, he comes in second, he goes to South Carolina and it's all eyes sort of on that state, but more importantly, the Jim Cliburn endorsement. And that, wasn't a sure thing as we reported the book, um, he, Jim Cliburn had some concessions, including the fact that he wanted Joe Biden to, uh, nominee a Supreme, a black Supreme court justice.

Amie Parnes: (11:06)
And, um, so everyone's watching this debate play out, um, in South Carolina, Jim Cliburn is in the audience. And one of the best scenes, I think one of my favorite students in the book is Jim Cliburn sitting there watching Joe Biden. Um, he hasn't yet said in this debate that he's his intentions about nominating a black Supreme court justice. So during the commercial break, um, Kleiber dashes out of his seat and his colleagues think that he just has to go to the bathroom really badly, turns out he's making a beeline for Joe Biden, and he wants to talk to Biden about why he hasn't done that, why he hasn't had that moment yet. Um, and so we kind of take you behind the scenes of how Joe Biden was able to get the, the pivotal Cliburn endorsement, which key to sort of turning around his campaign. We think that obviously Joe Biden would have won South Carolina, but the collaborate endorsement made it, um, it, it gave him sort of the gravitas to go forward and keep going and win ultimately, and super cheap on super Tuesday.

Anthony Scaramucci: (12:10)
So let's talk about the left though. You know, I don't want to call it the radical left, but let's just call it the left side of the democratic party. Um, he's, you know, uh, vice and now president Biden's sought to downplay that portion of the party. Um, tell us about that. What was your experience there? You write some great stories in there about AOC, et cetera. Um, how was he able to pull that off and where do you think it goes now that he's in the presidency? Is he going to be able to contain what I would say is the hard left side of his party?

Jonathan Allen: (12:44)
That's a great question, Anthony. I mean, early on, you've got, uh, you've got Biden asking his advisors before he gets in, and we write about this in the book, ask them, you know, if I miss my moment, has the party moved so far to the left of me, that as it left me is looking at these voices, Bernie Sanders, I was Andrew Ocasio Cortez, and he's thinking like the movement within the democratic party, the activism, the volume is coming from a place that's, you know, significantly to Biden's left. Um, and I think that what you see from him is a very artful, you know, we would have called it in the old days, triangulation where he's able to use the left part of his party to like distance from them. And at the same time distances from Trump and can put himself in the middle and a little bit above it all.

Jonathan Allen: (13:29)
Um, and, uh, you know, it ends up, I think it's very difficult to win a democratic party, a direct democratic primary without being in touch with, uh, with activists on the left, unless you've got like an unusual coalition, his coalition was moderate white people and black people of all sort of all political, uh, beliefs. Um, and that turned out to be strong enough to get him through the, the primary. It gets to the general. He distances continues to descend from the left. I mean, here's a guy saying I'm not going to say it to fund the police. And there's a big argument about that within his campaign. Here's a guy saying Bernie is too far out. So spinning a board a little bit. He's going to have a little, he's going to have a problem because he had a friendly in Bernie Sanders, um, and had a friendly on, on the left side during this election, they basically stuffed their priorities into the back seat to get Joe Biden elected. And right now there's a little bit of a honeymoon period, but that's not going to last forever. So

Anthony Scaramucci: (14:29)
What happens, Amy? It can, he, can he corral them?

Amie Parnes: (14:35)
Um, it's, it's too soon to say Anthony. I mean, I think that what we've seen lately is, um, a party that is still very much divided. And so I think, um, what's fascinating about this book, I think is that it not only is a post-mortem, uh, um, the campaign, but it is sort of like a guidebook for both parties, I think, to learn what went wrong, what happened and how you play it forward to 2022 and 2024, because you take Donald Trump out of the picture. And I think it's a whole different ball game. Um, you know, obviously I think a lot of people were inspired to run, to vote against Donald Trump. I'm not sure that they'll have that sort of weapon if you will, next time.

Anthony Scaramucci: (15:22)
So let, let let's talk about the, the upcoming election, the congressional election, uh, because you do write about that, you know, the trajectory of the American electorate. So what do you guys think happens in the midterms? Let's start with you, Jonathan.

Jonathan Allen: (15:39)
Well, I mean, the easy bet to take would be that the Republicans pick up seats, uh, certainly in the house, uh, probably retake the house just on the historical basis of the first midterm after, after a new president. But even more than that, what we saw was Biden didn't really have coattails. Um, and so what you saw down ballot was Republicans winning a lot of state legislative races, which means they're going to be in a better position. Um, as, uh, the parties redraw, the states redraw their congressional districts. I mean, the Republicans should be able to squeeze at least several seats out of that. So for the Democrats to win in the midterms and keep control of the house, they're going to have to figure out how to sell something to the public even better than they did last time. The good thing they have going for them is that, uh, what you've seen is a push of educated voters into the democratic party at the same time that non-college educated voters have moved into the Republican party and you are much more likely to vote in a midterm if you're college educated and has been consistent over the course of time.

Jonathan Allen: (16:38)
So there are a lot of competing, um, sort of pressures or sort of factors that will go into it. Um, but you know, I would have to just bet from today that it's more likely that the Republicans pick up seats in the house. You gotta look at the Senate map, you know, state by state. We don't know who's running it. Um, so, but at 50 50, that could go either way.

Anthony Scaramucci: (17:00)
Is Trump running again? Let's start with you, Amy.

Amie Parnes: (17:05)
Um, I don't think so. Although I, I, it asked me tomorrow. I feel like it changes day by day. I mean, I just, I think obviously there's room for him to run again, but I think, um, four years is a long time. I know it's still the party of Trump. I know Trump will be around for a long time. I just might. My hunch has to know what do you think, John?

Jonathan Allen: (17:30)
Uh, I I'll take the other side of that a little bit in that. Uh, I think he's running until he's not. Um, I think all of these people that get to that level look, Joe Biden. This is the third time he ran for president. As we write in the book, there were several other times that he didn't run, but thought about running. You get that taste in your mouth and it's real hard to get rid of it. Of course, we should defer to Anthony who's, who knows Donald Trump better than we do.

Anthony Scaramucci: (17:56)
I'm too much money guy. So of course he's going to run in the beginning. I mean, he has to, I mean, he wants to, uh, take his name off of Republican party fundraising because he wants to target his name for his own fundraising because that's his personality and he never made more money than he did after the election. So the whole ruse and the lie and all that stuff related to the, uh, the post election theatrically, um, you know, made him a couple of hundred million dollars and he's never made money like that before. So I think he will run again. Um, when, when, when you interview American people, not just the sources that you have inside the political arena or the business arena, but just the average Americans, because you guys do a lot of that in your field research, uh, you know, the polls say that 50 million or so people believe that the election was fraudulent. What is your reaction to that? Is that something you found in your research when you're doing a book like this, and what do you say to people about whether or not the election was a free and fair non fraudulent election?

Amie Parnes: (19:03)
It's amazing to me that people actually think that. And I think John and I had a very, um, you know, really personal kind of conversation about it, um, right after the 6th of January. Um, because as we were writing this book, I think we had some concerns that people might, uh, perceive lucky to be. Um, you know, president Trump could run with that and say, see, it was, it was all luck. It wasn't really, this wasn't really set in stone and he didn't really win. Um, so I think that part is very interesting. I think what we had to make clear in this book was that, uh, Joe Biden and we do so in our authors note, right before you even enter the first page of the book, but you sort of see that we've kind of set the ground and said, Joe Biden actually really did win this race. Um, there wasn't any fraud and we kind of wanted to say that right away before people misinterpreted what we were trying to say, because I think

Anthony Scaramucci: (20:01)
Is that the people that are reading your book know that there was no fraud. You know what I mean? You know what I mean? It's like the people that are out there in that ether, if you will, you know, yeah.

Jonathan Allen: (20:11)
The million people is amazing Anthony and how to reach those people, you know? And when we, you know, when we do, when we do reporting and obviously because of, COVID less like less able to do that toward the end of the selection we have in the past, you've talked to people, we'll have a wide variety of beliefs and some of them have a wide variety of things that they say to people that say to reporters that they don't actually believe or that they question, but would, you know, they like to be on that, that side, you know, sort of publicly. And I think that some of those 50 million probably understand that Trump lost the election and there wasn't fraud.

Anthony Scaramucci: (20:44)
Amy, there's a juicy story that guys left on the cutting room floor. Okay. And I'm sure there is a, that you guys, it's a great book, but you can't fit everything in and tell us something really juicy that you guys decided to leave out of the book.

Amie Parnes: (20:59)
Oh gosh. Well, you know, what was really tricky about this book, Anthony, is that we had 25 candidates to focus on. So there was a lot, um, you know, it's hard to cover and write a book when you're focused on so many people and we had to winnow them down. I'm trying to think, John, do you have a good anecdote? Um, something that we,

Jonathan Allen: (21:19)
I think w we cut, we actually cut out, um, a fair amount of, uh, the machinations around Pete Buddha, judge getting out of the race, which I thought was interesting. Um, you know, we kept in sort of the important parts of every moment

Anthony Scaramucci: (21:37)
Mayor budaj coming out of the race was a big moment because he was able to flip a lot of his voters over to the vice-president, right. Or

Jonathan Allen: (21:43)
Now, I mean, when you saw that coalescing right before super Tuesday, uh, it was because people would have judge and Amy Klobuchar got out because Beto O'Rourke endorsed Joe Biden because Barack Obama really, because Barack Obama got off the sidelines, um, and sort of pushing behind the scenes for people to get behind Biden. So, uh, we cut out some of the discussion that, that Buddha judge had with his staff and the sort of the evolution, the reality, the realization of reality, that he could only hurt himself by continuing to run, um, because he wasn't going to win the nomination. Uh, he might win a couple more states, you know, build this political operational a little bit more, but he would be seen as selfish if he stayed in. And we, we caught a little bit of that out just for essentially just for space. Um, but watching the machinations of Buddha judge, I think is really interesting because he is somebody who understands politics very, very well and is pretty cold, such a hard word, but he's pretty cold about the calculations of it all. And you could, you could see that and we cut some of it out. You

Anthony Scaramucci: (22:46)
Have to be a little bit cold speaking about cold. Let's go to the Obama Biden relationship. Okay. So it's a good segue. So tell us about that. Tell us, tell our listeners and viewers something about the Obeid in, excuse me, the Obama Biden relationship that they wouldn't necessarily know unless they've read your book or had your research behind it.

Amie Parnes: (23:08)
Um, I think it's a fascinating relationship, a complicated one. I do think they genuinely like each other, but the caveat as we record in the book, there's so much there. Um, I guess we should start with the fact that Obama sort of, uh, kept Biden out of the race in 2016. So that's in the back of his mind, but you know, when Biden even enters the race, he says, I asked my former partner, president Obama, not to endorse me. And what we learn is that that conversation never happened. And it's something that Biden repeatedly says throughout the campaign. I asked him not to Norse me. Um, but Obama people were kind of scratching their heads about that because that never happened. Um, we also reported the book, a really fascinating anecdote about, um, Obama going to speak to some black donors. He's close with a few of them.

Amie Parnes: (24:01)
He feels a little loose in the room. He feels like he can open up and tell them what exactly he thinking. And so they're asking him, what do you think about the horse race? Who's up, who's down. And, um, what are you, what are your thoughts? And he sort of gives a very long sermon about Elizabeth Warren, um, and it's, uh, kind of endorsing her without endorsing her. And he doesn't really say much about Kamala Harris. He, he bashes eat a little bit, um, and calls him short and gay, um, you know, sort of razzing him a little bit. And then the kicker, I think the fascinating part about this whole talk is that he forgets Biden and he has to be reminded by a donor in the room that he has forgotten by it. And someone actually said he forgot about it. Um, which kind of gives you a window into his thinking in that moment in the fall of 2019 as this election is heating up. But

Jonathan Allen: (24:57)
There are so many ways in this book that you see Anthony that Obama doesn't think that Biden's very good at politics and Biden. Doesn't think that Obama is very good at politics. Um,

Anthony Scaramucci: (25:08)
You know, I, I'm just giving you my observation, knowing some, a little bit about both of them and the vice-president obviously now president came to my, came to our conference a few years ago and I I've known president Obama dating back to law school. Uh, there's a discipline chasm there between the two candidates, you know, w w you know, I can't tell you, you know, how wide that chasm is because it's wider than the grand canyon. One is a Malaprop stir improvisational guy, you know, very chummy. And the other guy is a lot like mayor Pete, Buddha, judge, you know, he's very, you know, he's like a laser, you know, he's a, uh, he's the American sniper, uh, politics, and he's very disciplined. So I think that's where some of the tension is. That's my opinion. What's your reaction to that?

Jonathan Allen: (25:54)
Yeah, I think that's absolutely right. I mean, they look at each other, they don't, they kind of don't understand each other, right? Like Obama beach Biden in 2008, Biden gets like 1% in Iowa. Obama was like, this guy is going to not do me any damage. If I put them on my ticket, he'll balance my ticket. Is it like an old white guy that people think is like relatively avuncular, he's not a problem for me, you know? And nobody's going to pay attention with the vice-president says anyway, so like, he's good for me. He's helpful. Fine. Looks at Obama. And he's like, this guy's like so cold. There's no, like, there's no feel to them. There's no touch. There's no love that. Like sort of political glad-handing. I mean, you're absolutely right, Anthony, these, these guys couldn't be more different than what's interesting. We write this in the book, but like, they basically see their mentor and mentee, but they disagree on which one's the mentor, which one's the mentee

Anthony Scaramucci: (26:42)
Generational issue there as well. I have to speaking of generational issues, I have to turn it over to John Dorsey so that we can get the ratings up. Okay. Because he gets fan mail and it's horrifying. Amy, I got to tell you it's hurt my self esteem and my, my ego, you know, how shy and reserved I am. You you've seen that in action. So go ahead, Darcie. I know you're dying to ask some questions here,

Jonathan Allen: (27:10)
Alpha, alpha coming in. Yeah, that's exactly right now in your generation alpha squared. This

Anthony Scaramucci: (27:20)
SOP, go ahead, Darcie, go ahead. I know you're dying. I may ask the questions. So I just

John Darcie: (27:24)
Want to pry a little bit more on the Obama piece. Cause I found that one of the most fascinating aspects of the book is, you know, you dove deeper into this, uh, you know, the fact that they weren't really seeing eye to eye in this book that I've ever read previously, there was some indication in 2016 that Obama discouraged Biden from running in that election. Uh, and there's some indication that he wasn't keen on Biden running in 2020 and casting a shadow across the party. Again, do you think that's accurate based on your reporting that Obama basically didn't want Biden out there damaging his own legacy by running in these elections?

Amie Parnes: (27:59)
Yeah. I mean, we have a meeting very early on where he calls Obama calls somebody and aids to his office and wants to know more about the campaign and how they're going to run the campaign and what the tone is going to be. Like. He basically is worried that the campaign will not only embarrass Joe Biden and he he'll embarrass himself, but he'll embarrass and tarnish the Obama legacy. Um, and so we take you inside that meeting. It's actually a really fascinating one where, you know, you're kind of seeing what's on the former president's mind as Joe Biden is thinking about entering. And I always think that Biden kind of felt a little hurt by the fact that, um, Obama kind of checked him out of the race. He always sort of felt like Hillary Clinton was a horrible candidate. He said as much as we report as much of the book, um, he was helping, he actually offered advice to Bernie Sanders at the time about how to beat Hillary Clinton. And so, um, that is a really fascinating angle that he, he kind of felt a little bit, um, miffed by being kind of kept out. And he was also annoyed with Hillary at the time who he felt box to now. Um, he L already, uh, she had already locked down all of his donors and, um, Hillary was at the time taking hits on him to keep him out of the race. So I think all of that is sort of, uh, permeating in his mind as he's entering the race. It's a fascinating dynamic.

Jonathan Allen: (29:29)
The greatest beneficiary of Hillary Clinton's defeat was Joe Biden. Hillary Clinton wins when's the first time she was running for reelection, Joe Biden never gets to run for president again. Now he's president United States, but back to your point about Obama and Biden, just real quick. The other thing that happened here over the course of the last two election cycles is essentially a rejection of Barack Obama. Um, not a full rejection necessarily, but you see Trump win, right? And that's its own rejection of Obama from the sort of broader electorate, but then Joe Biden winning a democratic nomination. This guy who's got this sort of moderate politics, uh, who, um, is very, very careful on issues involving race. He sort of used it as a fulcrum in his career. Um, you know, figuring out where to be on majority side at one point or another, it's basically rejection of the progressive piece of Obama, uh, within the democratic party. And so if you're Obama, you look at where are things eight years after you were president of the United States in order for Democrats to win, they've gotta be politically significantly to your right.

John Darcie: (30:34)
So do you think that portends a continued moderation of the democratic party? Have they adjudicated as a party that they can't win by running these far left candidates? Or how do you think somebody like Bernie Sanders would have fared? Uh, it will say the same scenario played out with the pandemic. How do you think Bernie would have performed in this role?

Jonathan Allen: (30:52)
It's impossible to project, how many runs, uh, you know, I would have given up with a different shortstop, um, you know, playing ball. Uh, but I do think that the Democrats have not made the decision that they are going to be a moderate party or a liberal party to the extent that they have made that decision. Um, it's with their feet and their votes and with everything except for the presidential election, uh, it's been a move to the left and I think it will continue to be a move to the left. I think the big question is whether they're able to figure out the mechanics of voting in the way that Stacey Abrams did in Georgia, where you are able to bring out people election cycle after election cycle, after election cycle and build it and build it and build it. Um, and a lot of that has to do with the basic, like on the ground work of politicking, much more than the sort of philosophical questions.

John Darcie: (31:42)
Yeah. I mean, just to insert my own anecdote in here, I'm a North Carolina native and the North Carolina Senate race, I think was a perfect example of that dichotomy that you mentioned in that Chuck Schumer and the DNC told Cal Cunningham. You'll be our guy. If you agree to just sit in your basement and run attack ads on Donald Trump, and don't try to go out there with a aggressive, progressive type of campaign, there was other better candidates in the state of North Carolina that would have run more Elizabeth Warren type left-wing populous campaigns. And I think there's a lot of hand ringing in local politics about what the best approach was. And obviously the results, uh, have borne out the fact that they think are more energetic candidacy, uh, would have performed better. But Amy, I want to go to you about staffing within the Biden administration. So obviously there's not as much friction as there was within the Trump administration, but you talk in the book about sort of the friction that existed between Obama legacy staffers and more of Biden's own people. How did that play out during the campaign and how has it playing out now that, uh, the administration has governing?

Amie Parnes: (32:46)
It was interesting during the primary. I think they wanted to portray that everything was going well and they were all one team, but you had the primary staffers. They weren't, uh, uh, I think a lot of people outside the campaign about that they weren't quite up to speed. Uh, they weren't running a great campaign. So what happens, obviously there's a silent coup that is, that starts forming to ALS uh, their campaign manager grabbed shul, um, who is really beloved in the campaign. But, um, but even people internally think that he's not doing such a great job. So th Biden, senior advisors are quietly trying to get him out there trying to bring Jenna Mallee, Dylan in who, uh, was Obama's deputy campaign manager. Greg Schultz thinks that she's being brought in as we reported in the book just to like help out a little bit.

Amie Parnes: (33:38)
Um, and he's sort of taken off, he's completely taken. Um, I think he went by surprise when she's brought in and replaces him. Um, and so that's sort of a really interesting dynamic in the book, but then after you have her come in, Jenna valley, Dylan, you have this sort of friction between the primary staffers and the general staffers, and they're essentially the general ones essentially layer over the primary staffers. They're not quite, uh, they're not all talking to each other at the same time. There is a lot of friction going on. A lot of the primary staffers, secretly hate, um, general Mellie Dylan. Um, they may or may not have come to us to complain about it as we were writing the book. Um, and so we were

John Darcie: (34:23)
Salary profiles. Yeah. She had these flowery profiles done of her, right.

Amie Parnes: (34:27)
I mean, they were, they were totally opposed to her kind of saying, oh, I'm a mom and I I'm really good at Peloton. And so you had all this sort of a, um, animosity building towards Jenna valley, Dylan, um, throughout the campaign. And I think it finally comes to a head and sort of at the tail end of the general election, but it was definitely there, um, throughout, and they had political differences as well. John, I don't know if you want to talk about that.

Jonathan Allen: (34:56)
I think what I get out of all that staff in fighting is that a lot of the people that were on the Biden campaign in the first place, uh, were looking to blame Jenna, Molly, Dylan in the event that, uh, Bob lost. Um, and many of them had not, you know, some of them were really good at what they do and some of them are less good at what they do. And, uh, gentlemen, we don't, it's like the best political operative on the democratic side. Um, and you see this infighting going on and it's just sort of, it's sort of a distraction from the campaign. Um, uh, and I think it was, was difficult, but I, uh, John, if you want to pose the, the original question again, I'm happy to pop that.

John Darcie: (35:37)
Yeah. In terms of the friction that exists both during the campaign and now in the administration between there's a ton of former Obama officials that are in the administration, we've talked about that a sort of chasm that exists between Biden and Obama, that people don't like to talk about a lot, but there is, there are a lot of Obama staffers, but then there's also some Biden people. How is that playing out as they're governing as well as,

Jonathan Allen: (36:01)
I mean, right now, you're starting to see from Biden and who knows where like, you know, six weeks in Denver, but you're, I mean, what you've seen is an effort for them to, uh, to move things in a progressive direction for the white house to go in a progressive direction. But also what do, what Biden did, you know, uh, on the campaign trail, which is to use the F the left as a, um, you know, as a foil and to be able to, you know, sort of push himself away from it, even when he's embracing what they're saying, I'll give you a perfect example. Uh, the minimum wage increase that so many, uh, so many Democrats wanted to see how happen happened. Um, you know, Biden says you score that $15 minimum wage, but he knew that when they stuck it in the reconciliation bill, in the Senate, that it wasn't going to go through. Um, and then he can go to, you know, go out to the electorate and say, we need more Democrats. So we can get a $15 minimum wage. And at the same time, there was no business that's angry at him because they're now having to pay a $15 minimum wage and, and, you know, cut back on hours for people or lay people off. Or, and there were no people who got laid off because the $15 minimum wage, when both ways I would call that good politics. So they

John Darcie: (37:13)
Use the parliamentarian as the, in the judge about whether or not they could put the $15 minimum wage in the reconciliation bill. Do you think the Republican party, this is part of a bigger question. Do you think the Republican party would allow the parliamentarian to tell them, uh, you know, you know what you can't build that wall on the Southern border, we're Donald Trump, except that response. And do you think Democrats have enough of a killer instinct? So the John Lewis voting rights act is one example where you have Joe Manchin, Kiersten cinema, basically saying, you know what we think the filibuster is actually a good thing. We're not gonna, you know, in a very partisan way, change the system. But at the same time, you have these structural forces that could cause Republicans in the midterms and beyond to wrest control back and impose, you know, more voter suppression and things like that to prevent Democrats from ever gaining control again. Do you think Democrats have that killer instinct? They need to entrench themselves,

Jonathan Allen: (38:08)
Um, collectively now, I mean, I think one of the things that is appealing, uh, and frustrating the Democrats, isn't there a party doesn't, uh, isn't willing to nuke everything in order to get what it wants. Um, and you know, you see what the reaction to Trump was, his willingness to break institutions, um, you know, to threaten the sanctity of the Republic, you saw what the reaction to that was by the public. So like there, there is an argument to be made to the Democrats by not, you know, uh, always like pulling the trigger for the, you know, the toughest, uh, toughest thing out there have actually found a way back to the power. Um, all of that said, you look at a mansion or a cinema on the, um, on the filibuster or on minimum wage. They are, um, the heat shield for other Democrats in the Senate who don't want to vote for a minimum wage to increase who don't want to break the filibuster.

Jonathan Allen: (39:02)
Um, and those are the ones that are out there publicly. And the reason there are two of them is because if it's one of them, the pressure's too much, if there are two of them, they can handle it. We saw a testimony on minimum wage the other day, eight Democrats in the Senate on that proxy vote, uh, voted, essentially voted against raising the minimum wage to $15. But before that, we had heard there were two against it. And you're gonna assume the same thing about the filibuster that if there are two out there for three out there that it's a deeper reservoir, president Biden himself has given passionate defenses of the filibuster on the Senate floor. Uh, I just don't think it's going anywhere.

John Darcie: (39:37)
Right? Yeah. And you get the sense of in a lot of ways that president Biden didn't necessarily want to raise the minimum wage, especially in that way. Um, and, and mansion and cinema, as you mentioned, are sort of his, his heat shield in that regard. But Amy, I want to go to you about Hillary Clinton. So one of your previous books was called shattered. It was again, sort of a post-mortem on the 2016 election and Hillary Clinton's failed campaign. What was different about the way that Hillary's campaign was run versus the way Biden's campaign was run? Neither one of them was perfect, but what about Biden's situation was unique that was able to get him over the line. Whereas Hillary fell short by a similar margin.

Amie Parnes: (40:16)
The one big thing that John and I found was that Joe Biden had a message. Um, he, and he had the same consistent message throughout the campaign. Um, in the primary, it was, I'm the only one who can beat Donald Trump. Um, and that obviously was true in the end. And then it was sort of like a break, the fever, let's break the fever kind of unity message going into the general. Um, and that sort of carried him through the general. But, you know, when you look at his message, when he started, when you looked at the message on his final day, it's the same. Hillary was kind of all over the place. Um, as we reported the book, she kind of didn't know her starting from her kickoff speech. It was sort of like your standard democratic stump speech, but it wasn't personal to her.

Amie Parnes: (41:04)
Um, and you know, she had her whole, um, I'm with her campaign campaign slogan, and it turned into like five other things. Um, and people never really knew if you asked any general, you know, your neighbor, what she stood for, it would be like a bunch of different things. No one really knew what her core premise was. Whereas if you asked Donald Trump, you know, about Donald Trump, people knew. Um, and so that, that was sort of, um, how we, we saw it and, and I think it really, um, he was true to himself in the end. And I think that that's how he was able to kind of win in the end. The Parker jump was

John Darcie: (41:43)
Anthony wrote about, yeah, go ahead, John,

Jonathan Allen: (41:46)
If I could just jump on that Shakespearian line there for a moment to thine own self, be true, just real quick. I think the other big difference in the messaging was a Hillary Clinton message was about her. Uh I'm with her Joe Biden's message was about something that he could deliver to the public that the public wanted. And it was basically, uh, a more compassionate, uh, and the better character person at the helm of the presidency. I mean, that's boils down to that. The other thing you could get from shattered, if you read it was, uh, we didn't say it straight out, but we said it implicitly, and this is not something that the Biden folks got from us. I think it's because our sources in democratic party were good for the last book too. Um, it was also clear from that book that we thought that, uh, Hillary Clinton should've hired Jenna Mallee, Dillon to be her campaign manager. She was the runner-up, uh, Clinton went another direction. Uh, Jen Dylan, for whatever faults shouldn't have happened. And certainly there were some, uh, is just better at operating a campaign than anybody else in the democratic party.

John Darcie: (42:46)
All right. Well, Jonathan and Amy, thank you so much for joining us here on Saul talks again, the book Anthony, if you want to hold it up, it's lucky how Joe Biden barely won the presidency. Um, and I, I'm not going to editorialize too much, but as you end your book, it was a, it was an important moment for the country, I think as evidenced by the aftermath of the election. But Anthony let's give one more plug. Anthony is a great promoter, as he mentioned.

Anthony Scaramucci: (43:10)
No, I mean, listen, the book is great. I love shattered by the way, I thought that it's interesting content because your take is always based on the reality of the situation, not the form narratives of the Republican or the democratic party. And so I want to recommend this book to everybody. Doesn't matter what political Stripe you are. This is literally a satellite view of what happened. And then as most of these great satellites are, you guys can get right down to the license plates of what happened in this campaign. And so for those reasons, I love reading your work because whether you're a Democrat or Republican, there's something in here for everybody, but you are basically explaining where the country is right now and where it's potentially going. So I'm recommending the book, lucky to everybody out there, how Joe Biden barely won the presidency. Um, and I will say this I'm on page 2 93 case you guys did no, but number one in our hearts, I got my story right though, that was very accurate. Trump was very into the base. He did not care about anything else, which was evidenced by the way, he ran that campaign over the 18 months since he said that to me.

Jonathan Allen: (44:28)
Well, glad to hear that we got it right? Yeah.

Anthony Scaramucci: (44:34)
Guys, I really enjoyed the book. I'm looking forward to your next one and I want people to go out and buy it. Thank you, Anthony. Thank you, John. Thank you, Anthony.

John Darcie: (44:44)
Thank you everybody for tuning into today's salt. Talk with Jonathan Allen and Amy Parnas, who wrote lucky sort of one of the quickest and definitely most thorough postmortems on the 2020 election reminder. If you missed any part of this talk or any of our previous talks, you can access our entire archive on our website@sault.org backslash talks and also on our YouTube channel, which is called salt tube. We're also on social media. Twitter is where we're most active at salt conference. We're also on LinkedIn, Instagram, and Facebook. And please spread the word about these salt talks. Um, and on behalf of Anthony and the entire salt team, uh, this is John Darcie signing off for today from salt talks. We hope to see you back here soon.

Miami Mayor Francis Suarez: How Can I Help? | SALT Talks #175

“Miami has an incredible opportunity to be the knowledge capital and monetary capital of the world and that’s something that’s happening because of a confluence of factors that’s turning this from Miami moment to a Miami movement.”

Francis Suarez serves as the mayor of Miami and also vice chair of the Miami-Dade Transportation Planning Organization. His father, Xavier Suarez, was also mayor of Miami, making them the city’s first father and son to hold the office.

The meteoric rise of Miami is based on a three-pronged approach: low taxes, safety and quality of life. This approach has seen a massive migration of people and capital into the south Florida metropolis. The increase in remote-work has meant more people can work from anywhere, and many of them are choosing Miami. Leading on the integration and development of Bitcoin-friendly business ecosystems has Miami poised to be a leader in innovation. “I’ve been following Bitcoin and the blockchain for a while… If we want to be an innovative city, we have to be on the cutting edge of technology.”

The COVID pandemic presented many challenges to leaders, especially because the issues around handling the deadly disease became hyper-partisan. Mayors have seen their profiles rise because they are required to deliver practical real-world solutions. “Mayors see the world differently… We don’t care much about where [a problem] originated or how it originated or who’s to blame. I don’t have the luxury of making things partisan.”

LISTEN AND SUBSCRIBE

SPEAKER

Francis X. Suarez.jpeg

Francis Suarez

43rd Mayor of Miami

MODERATOR

Anthony Scaramucci

Founder & Managing Partner

SkyBridge

EPISODE TRANSCRIPT

John Darcie: (00:07)
Hello everyone. And welcome back to salt talks. My name is John Darcie. I'm the managing director of salt, which is a global thought leadership forum and networking platform at the intersection of finance technology and public policy. Saul talks are a digital interview series with leading investors, creators, and thinkers. And our goal on these salts talks the same as our goal at our salt conference series, which is to provide a window into the mind of subject matter experts, as well as provide a platform for what we think are big ideas that are shaping the future. And we're very excited today to welcome a guest that covers all those three pillars of salt finance technology, and public policy, maybe more so than anybody in the country right now. And that's the mayor of the city of Miami Francis X Suarez, uh, mayor Suarez serves as the mayor of the city of Miami.

John Darcie: (00:55)
He also currently serves as the vice chair of the Miami Dade transportation planning organization tasked with approving federally required plans and transportation policies. And as president of the Miami Dade county league of cities, he's the oldest of four siblings. Mayor Suarez was born into a family where, as he describes it, being socially conscious was sort of a requirement. Uh, mayor Suarez is focusing on transportation and connectivity issues within the city and beyond nurturing the growth of tech based economies in the area and by extension job creation and international opportunities within Latin America. And if you've been on Twitter or follow the news recently, you can, uh, you know, about all the migration that's taking place from places like Silicon valley in New York and elsewhere, uh, into Miami right now, Miami is absolutely on fire, but his priorities also still include affordable housing, tackling the poverty pandemic and reducing crime locally.

John Darcie: (01:46)
Uh he's he graduated from Florida international university where he majored in finance and graduated in the top 10% of his class. He graduated loudly from the university of Florida, Frederick G 11 college of law. And prior to running for public office, mayor Suarez founded a successful real estate firm. He's also a practicing attorney with the law firm of Carlton fields, specializing in real estate and corporate transactions and hosting today's talk is Anthony Scaramucci, the founder and managing partner of SkyBridge capital, a global alternative investment firm. Anthony is also the chairman of salt. We don't have an office in Miami yet mayor, but I don't know that that's very far away. We have an office up in Palm beach gardens. We love spending our time down in Florida, but with, without any further

Anthony Scaramucci: (02:27)
Miami, yet that's not properly. We're going to have an office in Miami and we're looking and

Francis Suarez: (02:31)
I kind of break it to you. But Palm beach gardens is Miami because when you go to Europe, you don't say I live in Palm beach gardens. You say, I live in Miami. So everything is my aunt. There

Anthony Scaramucci: (02:40)
You go. That's like my kids. I tell them, even though the mother was a Irish, they're 100% Italian mayor Suarez. So just saying, that's how it works. So well, first of all, God bless you on everything. And I definitely wanted John to read that introduction because it is incredibly impressive and you building an amazing career in public service, but also you're a great American, but what ignited this public service passion in you?

Francis Suarez: (03:08)
Well, I mean, in my case, uh, my dad who, uh, was the first Cuban born mayor of Miami, who was, uh, elected mayor in 1985, but he's, uh, an immigrant to this country as is my mom both exiles from a communist Cuba in the 1960s. My dad was a ninth of 14 kids. He came to this country with nothing. Um, God was blessed to get scholarships, went to the best schools in the country and then ran for office multiple times before he was elected. He had to build up his name recognition for zero. Um, and I was fortunate enough to see him, uh, be mayor from 1985 to 1993 for three years. Um, and he was a very dynamic mayor. Uh, ironically, he was actually 36 when he became mayor. I was 40 when I became mayor. So we're the first father and son mayor. He was the second youngest mayor in the history of Miami. I was a third youngest, but often tell him that, uh, when you were 36, you look like you're 40 and I'm 40. And it looked like I was 36. So, um, you know, that's, that's the difference there, but, uh,

Anthony Scaramucci: (04:09)
Mayor I'm 75. So I guess if you need my dermatologist, I can tell you, but you don't right now, you look great. So I wouldn't do a thing, but someday you're going to need my dermatologist. I'm going to refer it out. So let let's talk a little bit about what is happening to your amazing city. You have the introduction of further introduction of venture capitalists, hedge fund managers, financial professionals are migrating out of places like San Francisco and New York. It's not just pandemic related. It was happening before the pandemic. Sure. Talk to us about your, the vision that you have for the city, because it's an interesting one. You want it to be a home for entrepreneurs, but you also want it to be a place where there's affordable housing and there's aspirational living standards for a middle and lower income people. Tell us about that vision.

Francis Suarez: (04:57)
No doubt. And for me, I think that's really the American dream. I mean, that's what we all grew up with, right? Everybody having the dream of owning a house with a picket white, you know, white picket fence. And obviously that that narrative has changed in terms of urban America. But the truth is that our formula for success is very simple. The first thing is we've kept taxes low. We don't have an income tax. We don't have a state income tax. We've reduced property taxes. The only tax that we charge to the second lowest level in the last six years. Um, so one of the things is we want our residents to keep the maximum amount of their money so that they can invest in the things that are going to create high paying jobs in our community. Secondly, we want to create the safest city in America.

Francis Suarez: (05:36)
Um, at least the safest big city in America and for us, while other cities have defunded police, we've actually increased funding and police. We have the most police officers who've ever had in our history. We reduce crime by 25% last year, we had the lowest homicide rate since 1954, the year before. So we're excited about delivering on that promise because we're seeing that other cities are not getting a right and, and other countries frankly, are not getting it right. We get a lot of people from Brazil and other parts of the world, uh, that are fleeing, uh, places where they don't feel safe. And so for us, that's important. The third thing is we're focusing on quality of life. We realize the fundamental truth that you don't get to live yesterday again. Um, once yesterday happens, it's over. So, you know, everybody now in today's modern day economy wants to live in the best place possible.

Francis Suarez: (06:22)
This is not a virtual background. That is not a virtual crane. That is a legitimate crane. Those are legitimate Palm trees is a beautiful place. Uh, but we also focus on having the buffet of, of, of offerings, right? Whether it be sports or culture, we're not negotiating with an MLS team to bring MLS to Miami. We're also going to be one of two cities in America was formula one racing. We have obviously all the major sports teams. Um, we have a performing arts center. We have a science museum. Uh, we have, uh, uh, an art museum. Uh, we have, uh, one of the large largest art festivals in the world, in our Basel and some of the best private collections in the world as well in terms of private galleries. So, you know, Miami has really matured over the last 10 years. And now I think we have an incredible opportunity that we've really been working on for 10 years, uh, to be the knowledge capital and the monetary capital of the world. And that's something that is happening because of a confluence of factors that are making this a Miami moment into a Miami movement.

Anthony Scaramucci: (07:21)
Suarez. I want to ask you a philosophical question that is weighing on my mind, uh, places like New York and San Francisco, the executive management teams of those governments, those administrations have been combative with business have been obstructionist to business, but have also decided that it's okay to have a proliferation of homeless people and human excrement, frankly, right there on the street. What are, why are they like that? I mean, you, you must be studying this as a public servant. Why are they like that? Why do they think that that's good? And what would the message be? What they're getting wrong and what's your philosophy. So start out with what they're getting wrong and then what you're getting. Right. So,

Francis Suarez: (08:03)
So part of my narrative, right, is that my parents were Cuban exiles, right? And so my parents came from a place, a country where a charismatic leader, um, sold them, probably the biggest prod in the history of humanity, which is that we, as a government can just take over everybody's property, right? And we can deny everybody that, you know, fundamental human rights and we'll just divide the property equally and everybody will be equal, right? And that doesn't work. It's never worked in the history of humanity. All it does is create equal misery. And I think unfortunately there is this false notion that, um, wealth or what creation, uh, is, will cause us societal problems. And I think in so many cities, there is an antagonism towards people being successful towards working hard, instead of embracing the fact that you want to, or lift people out of poverty, you want to give people right.

Francis Suarez: (08:55)
And that happens through creating high paying jobs in the creating the educational pipeline that allows people, whether they're in high school, college, or, or out of college, uh, to be able to occupy those jobs, that's our philosophy. Um, and, and, and what we're seeing in terms of results is, you know, while so many cities have, you know, 30,000, 40,000 homeless, how many homeless, the city of Miami have, according to the last sentence, 555, okay. 555. And we're actually coming out with a plan hopefully soon, which we call functional zero, which is we want to end up being the first city in America, the first major urban city in America that has zero homeless. Um, and that's something that we're focusing on. Um, like I said, we've reduced crime by 25%. Um, we've invested in our police department, they've gone in the opposite direction. And I think, um, they really need to understand that, um, people can, I mean, in today's day and age, they're not even tethered.

Francis Suarez: (09:46)
People are not tethered to their city with remote work, with all the stuff that we're doing right now. I mean, right now we're on zoom and doing this interview. Um, there are more offerings and options than people have ever had in the history of humanity. And all they have to do is meet and that's it. And now places like Miami that'd before were kind of seen as a fun and fun place and place where you can retire are now seen as a, as a real player in the knowledge based economy and the innovation economy. And, and my role is not just to attract those people and to juxtapose the F Elon Musk. And let's push Amazon out of, out of New York with a, how can I help? Which is, which was my viral tweet in response to, uh, DeLeon from founders fund saying, Hey, what if we move a Silicon valley to Miami? Right. I just said, you know, uh, how can I help? That's it, it was that simple, uh, government as a facilitator, uh, versus like you said, government as an obstructor.

Anthony Scaramucci: (10:39)
Well, I think the tagline, how can I help is going to be a, it's going to be with us a long time mayor Suarez, because of you want to talk about the decisions being made around, COVID-19 get your reaction to those decisions. Uh, uh, governor DeSantis has had a different philosophy say than, uh, uh, the governors of California and New York. How do you feel about the COVID-19 situation? I know that you went through COVID and your family did as well. Thank God that you're well, you look, you look well, thank God. Um, what, what, what do you, what do you say about the philosophy and about the intersection of an open economy and the restoration of the economy, but also being worried about the health and safety of your citizens?

Francis Suarez: (11:24)
Look, it's there. There's no doubt that, um, you know, COVID presented it and tremendous challenge for leaders across the country. I think the problem was that it became hyper-partisan number one, I think number two, there was a false narrative and the false narrative was that you either cared about people's lives, or you cared about the economy and that's not true. I mean, all public officials should care about both things, right? You should care about doing the maximum amount that you can to protect people while at the same time, preserving people's ability to, to, uh, to provide for their families. Because let me tell you something, getting sick and passing away is a tragedy, but not being able to feed your family, not being able to pay your rent, not being able to pay your mortgage is a tremendous tragedy as well. You know, these are, these are, you know, the degrees of suffering that we should never, as leaders have to confront in terms of a juxtaposition.

Francis Suarez: (12:16)
And, you know, the governor took a lot of heat, uh, for some of the decisions that he made. But at the end of the day, there's two things that I think are true. Number one, it's inevitable that it helped Miami that's for sure, in terms of, you know, the fact that we were open with a lot of these cities were closed. We became an option, right. Where people came and they realized, Hey, wait a second. Things are not that bad here. Right. Um, you know, we had, I think, less per capita deaths than some of the states that you site. Um, and, and then, and then the second part is that, uh, you know, now with remote work, uh, you realize that you could come to a different place and you wouldn't even lose your job. You could be physically anywhere you want it to be without even losing your job. And when they, when people came to Miami, they realized that the density of talent, the density of capital was significantly greater than what they thought. And they also realized that Miami had changed. I mean, Miami has, is a radically different city than it was 10 years ago. It's a radically different city than it was 10 years before that. Um, and we're one of those cities that's just on like the, like the crane behind us. We're on one of those, uh, exponential growth curves.

Anthony Scaramucci: (13:17)
Yeah. W we want the crane to be going the other way for purposes of our zoom call. We've got to go on up in this direction. And I, but I hear what you're saying. If I looked at your Wikipedia page, it says you're a Republican. Um, my Republican party seems like it's, uh, re identifying itself. And so are you a Republican, uh, in terms of the way the Republican party is now reidentifying itself. Um, and then the secondary question is you seem to be a leader that's more focused on right. Or wrong as opposed to left, or, right. So what is your recommendations? Assuming you're still a Republican, what's the recommendations to the GOP,

Francis Suarez: (13:56)
So I'm still registered Republican. Um, and I, I do think that, and I'm going to give you a quote from a friend who's a mayor, uh, was actually a Democrat, um, uh, the mayor of, of, uh, Pittsburgh, Pennsylvania, bill Peduto. And he wants to, you know, in America, Mr. Mayor, there's three parties, there's Republicans, there's Democrats, and there's mayors, you know, and, and, you know, I think, I think there's some truth to that, you know, may or see the world differently. We're kind of like engineers, you know, we see the world as problem solution, problem solution. We don't really care that much about where it originated or how it originated or who's to blame for it, or, or what party has, you know, the, the, the, the solution, all we care about is solving the problem. So when there's flooding, I have to solve that when, you know, when there's a civil disturbances, I have to be in the forefront of that.

Francis Suarez: (14:47)
We don't, I don't have the luxury of being able to, you know, make things partisan. And so I think, you know, one of the reasons why in this presidential election and the previous one, you saw mayors, uh, starting to ascend in, in sort of the, uh, in the, in the political spectrum of potential presidential candidates is in part, because we do think we do things differently. We see things differently, we talk differently. And I think that, uh, it really appeals to people because it's not about, um, you know, it's not life lived through a, a binary prism, right? It's life lived through, through a problem solution prism. And I think that, like you said, it's more of a true false narrative. And I think that, that, that cuts through, and that's why I'm able to go on a variety of different shows and people know me as a straight talker. And sometimes I wrote people the wrong way, by the way. And, and I don't do it intentionally, just probably not

Anthony Scaramucci: (15:39)
Beyond me. I don't know. I don't, I've never rubbed anybody the wrong way. I mean, you'll find that about my person. I'm a very easy going guy, not polarizing at all. Uh, so I, I've never, I, I wouldn't understand how you could rub anybody the wrong way. Uh, let's talk about Bitcoin for a second. Mayor Suarez. Uh, you are a revolutionary when it comes to Bitcoin or an evolutionist, I should say. And obviously you probably know this, but it's worth noting SkyBridge capital. Our firm, the firm that I founded has over a half a billion dollars in Bitcoin, I have attended the Miami Bitcoin conferences in the past. I will be one of the keynote speakers in June at the upcoming Bitcoin Miami conference. Tell us about your and the city's fascination with Bitcoin. And why are you so gung ho

Francis Suarez: (16:24)
You know, I've been following Bitcoin and the blockchain for awhile. I, um, uh, was part of a team that tried to do the first tokenized transaction of real estate in Miami. Um, I'm on the block, Florida blockchain foundation, and I was on, uh, and I am on the Ford of blockchain task force appointed by the CFO of Florida. So all that work predates, uh, my latest positions on Bitcoin when I, when I, um, began talking about tech at this bogging level, right, and, and was getting national attention about it, I very quickly realized that there was a subpopulation of people in the crypto community space that were extremely positive, that were paying attention, um, that were very bullish on the technology. And it, it made me realize that if we want to be an innovative city, we have to be on the cutting edge with new technologies.

Francis Suarez: (17:13)
And so what I did was I presented to the city commission, a resolution, which did three things. One, it allow for employees to get PR to get paid a percentage of their salary in Bitcoin, if they so choose it, it allowed for our residents to get paid, uh, to I'm sorry to pay, uh, fees and taxes potentially in Bitcoin, if they so choose. And it allowed us to study the possibility of investing a portion of our treasury as a hedge in Bitcoin. Um, so, you know, for me, I think that creates a narrative about the city of Miami, that we are innovative, and we want to push the envelope that we believe that, um, you know what I mean, that we don't always have to be playing by the, the normal set of rules. And I think that's, that's getting us out of Godness. A lot of attention.

Anthony Scaramucci: (18:00)
I've got one last question for him here. Then I have to turn it over to our resident millennial with the good blonde hair, and we're trying to get the ratings up here. So, you know, my last question is about public school education in Miami, in your jurisdiction, you, you have, uh, no state income tax property taxes in Miami are, I would qualify them as reasonable. You tell me if I'm wrong, but they look reasonable on a per capita per resident basis. Sure. So tell me about what you're doing in the public school area. That's yielding such high quality public schools, uh, given that dynamic. Sure.

Francis Suarez: (18:40)
Well, first of all, we have a great superintendent, our superintendent, one superintendent of the year, uh, he was actually tried to be hired by, uh, the city of New York. Um, and that didn't quite work out for New York.

Anthony Scaramucci: (18:51)
There's no, there's no Palm trees up here in New York, kind

Francis Suarez: (18:54)
Of, he kind of left them at the alter, but, uh, but, but it's all good. And, uh, and so, and we also won the Brode prize for the best school system in the nation as well. Um, we have the fourth largest public school system in America. And, you know, we were just, uh, a community of entrepreneurial people of, of, of, of people who put a premium on education of parents who put a premium on our children being educated, because that's how we were all successful. So we're still working by the way, with the public school system on making sure that our K through 12 curriculum is the best curriculum from modern day economy for an innovation economy, a knowledge based economy. And so we want to make sure that coding robotics, uh, you know, all the things, uh, data analysis and science are all being taught at our, at our schools. And it's something we're very intentional about because as I said, as we create this ecosystem, we want to make sure that, uh, the children of our, every single child in our community has an opportunity to be successful. And to occupy one of those jobs,

Anthony Scaramucci: (19:50)
John Dorsey, mayor Suarez,

John Darcie: (19:52)
All right, I've been chomping at the bit, get right into it. Uh, mayor you're also, as I read in the bio, the vice chair of the Miami Dade transportation planning organization, uh, you've led several initiatives to improve mobility in Miami. It's a city that's grown very quickly, but also, uh, you know, maintain the ability to get around without being stuck in traffic for, uh, five hours the way it is in some cities and Austin being another destination that I think people are leaving Silicon valley and moving there that that's suffering from rapid growth. How have you been able to do that, uh, from a transportation mobility perspective, you recently toured Elon Musk's tunnels, uh, for the boarding company. What innovative ways are you thinking about in Miami, uh, to, to improve quality of life by maintaining that level of mobility?

Francis Suarez: (20:37)
Every single one, uh, you know, we start with, uh, we're building in our transit nodes. So instead of trying to figure out how to make transit, go to the people we bring to the transit that already exists. And it's shockingly simple idea, right? As you actually build buildings where there's transit station, which is called transit oriented development, we've been doing that very successfully in the city for the last five years. Um, we're creating, uh, neighborhoods that are self-contained. So we're doing it sort of around the concept of a 15 minute walkable city where every neighborhood has every, all the amenities that you would want to have that you could walk to. Also, you don't need to use a car. Obviously there are macro innovations like micro mobility, which is we have a scooter, a scooter program. We have a free trolley system, um, in the city.

Francis Suarez: (21:21)
And we also have a variety of different, uh, you know, we have a bus system, we have a Metro rail system. I mean, those are the things that all major cities, uh, presumably have, but I think the last thing is we are getting a foothold because we want to be a technological enforcement city in transportation technology. So like you talked about it, we're touring, uh, um, you know, the boring company, actually, their representatives are coming tomorrow, uh, to Miami, uh, to, to, to look at some of the engineering specs on some of our potential projects, uh, where I'm actually going. Uh, it was actually the poor Lauderdale mayor that I sent up, uh, to, uh, to, to Las Vegas I'm actually going on the 18th. So I'm going up to see their, their tunnels up there. Um, we're also looking at, um, you know, urban air mobility, which is another big, uh, uh, potential technological way of getting people across the city.

John Darcie: (22:09)
What about climate change for a second? Obviously, a lot of people are moving down to Miami, first of all, they haven't experienced maybe a Miami summer. So we'll see how they deal with that. Although I think it's perfectly manageable. Um, but also climate change is something that's top of mind for people we've seen increasing, uh, prevalence of hurricanes that have devastated different areas of the country. And in Puerto Rico, we haven't seen any, you know, real direct hits on Miami that have, that have incurred massive damage. But how are you thinking about adapting the city to a world where we're going to have a rising sea level, uh, and increasing preponderance of hurricane,

Francis Suarez: (22:43)
Uh, in a few different ways, first of all, um, you know, most people don't know some of the facts, which is that New York has actually suffered more damage from hurricanes in Miami, has in the last 10 years. That's just something that people don't often know. Um, but the second thing is Miami is the most wind resilience. Again, the planet, this building that I'm in right now is a Pan-Am seaplane hangar from the 1950s. And this building has hurricane windows that ain't coming down. No, sir, that's, that's retrofitted. So we're, we're the most, we're already the most wind resilient city on the planet. There is no doubt that we are hardened for, uh, 200 mile per hour or teens plus, which by the way, are far less dangerous than of course wildfires and earthquakes that you can't predict. Right? But in the case of, uh, of us, we have invested in resiliency.

Francis Suarez: (23:30)
We have a program called Miami forever, and it is what it, what it says, right? Which is we have a 200 million residential package, uh, rising seawalls, urban reservoirs, uh, pump systems, uh, you know, backflow preventers, a variety of, uh, engineering techniques that we have implemented to adapt to climate change. We're also getting in the mitigation game, we have a, a carbon neutrality plan that we're going to unveil on earth day. This year, I'm on a global council and adaptation, the only mayor in the United States, only one of two mayors in the world. That's on that council. I'm the vice chair of our council. And, uh, and I was the chair of the environment committee for the us conference of mayors. And I'm going to be now in January, the president of us conference of mayors. So I'm gonna be the president of all the mayors in United States. So that's a huge honor for me. It gives me a tremendous platform to talk about these important issues.

John Darcie: (24:20)
So SoftBank, I saw a tweet recently from Marcello Claure. He said they, they invested a hundred million dollars or pledged to invest a hundred million dollars into the Miami tech ecosystem. There's a lot more, uh, ammunition coming behind that what's the impact of large asset allocators like a SoftBank coming in. I know a group out of Dubai also pledged a several hundred thousand Bitcoins or tens of thousands of Bitcoins also to cultivate Miami as a, as a digital assets hub as Anthony referred to. But what is that doing to the local tech ecosystem? What type of founders and people are you seeing gravitate to Miami as a result of, you know, greater capital,

Francis Suarez: (24:59)
Every everybody, I mean, there's something anybody isn't coming. I mean, you know, like you said, Marcello, uh, uh, SoftBank already had a presence here, but they, they initiated this a hundred million dollar Miami initiative, uh, to, uh, sponsor companies that are coming here and, or already, uh, that are founded here already. We're coming here. Um, you have Blackstone, you have Starwood Connie capital. Um, you know, you have, uh, Microsoft, uh, the list really goes on and on, uh, Keith we're, blah, Peter teal. Um, I mean, it's just, it's just a non-stop flow of people that are coming here. Uh, Orlando Bravo from Thoma Bravo, it's a $70 billion fund. Um, the amount of capital that is coming to Miami from both different places, um, is unprecedented. And what's interesting about it is that nowhere in the world, in the history of the world, right, has the confluence of investment banks, banking, hedge funds, private equity, come to combine with VCs, you know, and founders that's never happened. So their business models are completely different and they don't interact because they're in different parts of the U S they're both coming here, which is going to create a pool of capital that has never been deployed in the way that it's going to be deployed in Miami in the future.

John Darcie: (26:13)
Last question. So back into politics for a minute, but it's really not a question about politics. So again, I wouldn't have known whether you were a Republican or a Democrat, and unless I read your bio, right, I don't, I don't think you come across as being parsed in, in any way. How do we take that mentality, taking the quote that you offer from the Pittsburgh mayor about the fact that we have Republicans, Democrats and mayors, why don't we, how do we get to the point where we have Republicans, Democrats, and presidents or leaders at the federal level that think in terms of sense and pragmatism, as opposed to partisanship,

Francis Suarez: (26:46)
We've got to start electing people like me. I mean, I think, I think, I think at the end of the day, really we have to, as voters, our criteria has to change, right. Rather than having somebody who, um, speaks only to a certain audience, right? I think when you think about trends, you know, a transformational years or meters or leaders that transcend time, they're the kind of leaders that can speak to anyone. I mean, when I think of Ronald Reagan, when I was young, when Ronald Reagan spoke, everybody listened to it didn't matter whether you were public and whether you were independent, whether you were Democrat, when he spoke his command, his presence, the way he articulated things, the words he chose, obviously you had an amazing speech writer and Peggy Noonan, but, you know, I mean, you had somebody that can talk to me, anybody. It didn't matter what you wore.

Francis Suarez: (27:34)
There wasn't even a competition because it wasn't about party. It was about America. It was about American exceptionalism. It was about, you know, this being the most important, uh, freedom, loving, uh, country in the world and understanding what our values are. I think we get back to our values and we get back to debates about how to solve problems, as opposed to, you know, the Republicans feel this way about one thing, and the Democrats feel this way about another thing, or this is a Republican issue or a democratic issue, which is kind of silly. You know what I mean? Especially when you think of the important things like climate change and, and some of the things that we've talked about in this show, um, they're not partisan issue. They're really about a problem that we have to solve.

John Darcie: (28:14)
Amen brother. Well, thanks so much for joining us, Anthony. Uh, we're going to let the mayor go here, but just want to give you a chance to just want to, I just

Anthony Scaramucci: (28:20)
Want to say thank you, mayor. We're, we're, uh, we're doing these live events at some point again, we'd love to have you at one of them so that you can expose, uh, I'm afraid to invite you to New York city though, because I still live here. I'm afraid you're gonna suck the whole city out of here. You know, I don't know. You're totally capable of doing it, but anyway, congratulations on everything that you're doing, sir. Uh, we're so grateful as citizens of the United States and friends of Miami to have you in public service. And we appreciate your time here today on smalltalk. Thank you so much, likewise. Okay. Be well Francis. Thank you. Bye-bye terrific. Thank you ma'am

John Darcie: (28:59)
And thank you everybody for tuning into today's salt. Talk with mayor Francis X Suarez of the city of Miami, uh, which is going through a moment. But as, as the mayor said, they're trying to turn that into a long-term movement. And I wouldn't bet against them being successful in that endeavor. Just a reminder, if you missed any part of this salt talk or any of our previous salt talks, you can access our entire archive on salt.org, our website backslash talks, uh, and you can also sign up for all of our future talks there as well. Please subscribe to our YouTube channel. All of our episodes are there for free for you to view it's called salt too. We have a growing subscribership there, and we appreciate everybody engaging on our videos on our YouTube channel. We're also on social media. We're most on Twitter at salt conference, but we're also on LinkedIn, Instagram, and Facebook, and are doing more and more each one of those outlets. So please follow us there and please spread the word about these salt talks, but on behalf of Anthony and the entire salt team, this is John Darcie signing off from salt talks for today. We hope to see you back here soon.

Secretaries of State Brad Raffensperger & Jocelyn Benson on Election Operations | SALT Talks #163

Brad Raffensperger is the CEO and owner of Tendon Systems, LLC. Tendon is a specialty contracting and engineering design firm with nearly 150 employees. The firm has operated in 35 different states. Raffensperger also owns and operates a specialty steel manufacturing plant based in Forsyth County. Additionally, he served two terms in the Georgia General Assembly from 2015-2019.

Jocelyn Benson is Michigan's 43rd Secretary of State. In this role, she is focused on ensuring elections are secure and accessible, and dramatically improving customer experiences for all who interact with our offices. Benson is the author of State Secretaries of State: Guardians of the Democratic Process, the first major book on the role of the secretary of state in enforcing election and campaign finance laws. She is also the Chair of Michigan's Task Force on Women in Sports, created by Governor Whitmer in 2019 to advance opportunities for women in Michigan as athletes and sports leaders.

LISTEN AND SUBSCRIBE

SPEAKERS

Brad Raffensperger.jpeg

Brad Raffensperger

29th Secretary of State of Georgia

Jocelyn Benson.jpeg

Jocelyn Benson

43rd Secretary of State of Michigan

EPISODE TRANSCRIPT

John Darsie: (00:07)
>> Hello, everyone and welcome back to SALT Talks. My name is John Darsie. I'm the managing director of SALT, which is a global thought leadership forum and networking platform at the intersection of finance, technology, and public policy. SALT Talks are a digital interview series with leading investors, creators and thinkers. And our goal on these SALT Talks is the same as our goal our SALT Conference Series, which is to provide a window into the mind of subject matter experts, as well as provide a platform for what we think are big ideas that are shaping the future. And we're very excited today to welcome you to the latest episode of our election series. There was the brainchild of one of our hosts today, Elliot Berke.

John Darsie: (00:48)
Really our goal with this series is to just set the record straight and get the facts out into the sunlight about what happened not just in the 2020 election, but to teach people about the facts surrounding election operations, election security, and lessons that we learned from this go around that can continue to help us improve the elections process. And we're very excited today that it's a bipartisan conversation as well. So we have the Secretaries of State of both Georgia, Secretary Brad Raffensperger, who's a republican. We have the Secretary of State of the State of Michigan, Mrs. Jocelyn Benson. We're very grateful for both of them for joining us. I'm going to read a little bit more about their bios before I turn it over to Anthony and Elliot for the interview.

John Darsie: (01:27)
The Secretary of State Brad Raffensperger is the CEO and owner of Tendon Systems in addition to his role there in the State of Georgia. Tendon is a specialty contracting and engineering design firm with nearly 200 employees. And the firm is operated in 35 different states. Secretary Raffensperger also owns and operates a specialty steel manufacturing plant or multiple plants based in Forsyth County, Georgia. Additionally, he served two terms in the Georgia General Assembly from 2015 to 2019. Secretary Raffensperger earned his bachelor's degree in Civil Engineering from Western University, and was awarded his MBA from Georgia State University there in Atlanta. He's a licensed professional engineer over 30 states. He and his wife have been married for 42 years and live in Johns Creek. He's a member of the North Point Community Church.

John Darsie: (02:17)
Secretary Jocelyn Benson is the 43rd Secretary of State of Michigan. She is the author of State Secretaries of State: Guardians of the Democratic Process, the first major book on the role of Secretary of State in enforcing election and campaign finance laws. She's also the chair of Michigan's Task Force on Women in Sports, which was created by Governor Whitmer in 2019 to advance opportunities for women in Michigan, and athletes and sports leaders. She's a graduate of Harvard Law School, like Mr. Anthony Scaramucci, who is also hosting today's talk. An expert on civil rights law, education law and election law. Secretary Benson served as Dean of Wayne State University Law School in Detroit. Previously, she was an associate and professor and Associate Director of Wayne law schools Damon J. Keith Center for civil rights.

John Darsie: (03:10)
Prior to her election to the position of secretary of state, she served as a CEO of the Ross Initiative in Sports for Equality, aka RISE, which is a national nonprofit organization using the unifying power of sports to improve race relations. Benson is the co-founder and former president of Military Spouses of Michigan, a network dedicated to providing support and services to military spouses and their children. In 2015, she became one of the youngest women in history to be inducted into the Michigan Women's Hall of Fame.

John Darsie: (03:43)
Hosting today's talk, as I mentioned before is Elliot Berke, who is a managing partner, founder of Berke Farah, a law firm based in the Washington D.C. area. As well as Anthony Scaramucci, who's the founder and managing partner of SkyBridge Capital, a global alternative investment firm. Anthony is also the chairman of SALT. And once upon a time he spent just under two weeks in politics as well. So he might have a little bit to say about his experience, but obviously-

Anthony Scaramucci: (04:08)
Madam Secretary and Mr. Secretary, he never lets up on these SALT Talks. He reminds people every day about my 11-day PhD in Washington chicanery. Okay, so now listen. I have to read this as well. The SALT Talk Election Series was created as a record of what actually happened in the 2020 election. It is designed to rise above the noise and hyperbole and focus on the facts and law, and to educate our views about the election process from a holistic perspective. The SALT Talk, this particular one is the third in an Election Series. The first one was an election security talk with former Department of Homeland Security Secretary Michael Chertoff. The second was an election administration and lessons learned from 2020 with the election assistance commissioners Hovland and Palmer. I'm going to turn it over to my good friend and my longtime lawyer, who knows everything about election law, Elliot Berke.

Elliot Berke: (05:07)
Thank you, Anthony. And Madam Secretary and Mr. Secretary, thanks so much for joining us. Anthony said this is our third talk in the series. And our first you really focused on the federal perspective. But it's always important to remind our viewers that our national election system really is a federal state local partnership. That being said, beyond the constitutional requirements regarding our elections, they're largely run by the states. And that's the way our framers designed it. So notwithstanding the litigation that has followed the election, we'll get to that. This election was largely a great success story. Let's back up and go back to around this time last year when you started realizing that this pandemic was going to have a significant effect on what it is you do. I'll turn it over to Secretary Benson first for comments.

Jocelyn Benson: (06:00)
Well, thanks, Elliot and thanks, Anthony. Thank you, everyone at SALT, John for inviting us today. And really taking seriously the importance of creating a truthful record of history. And exactly how democracy survived really this extraordinary year that we all just went through. So I'm very grateful to you all for doing this work. And I think it'll be an important foundation through which people can learn about this cycle in the years to come. With that, on March 10 in 2020 is the date of our presidential primary, it was also the date of our first ... my first statewide election as Secretary of State. And it was the first election in which citizens had a right to vote by mail, as well as a right to vote absentee, a right to register to vote on election day itself and vote.

Jocelyn Benson: (06:49)
And those rights were cultivated by citizens themselves, who voted them into our state constitution in 2018. And the same year in which I was elected to serve as the state's chief election officer. And at that time on March 10, we were anticipating high turnout. We were anticipating more citizens choosing to vote absentee than ever before. And we had a very successful election day that we spent a year preparing for, that was intended to guide us as we prepared for two other statewide elections following that. One, of course, was in November. At 8:00 PM the polls closed, and we actually celebrated a great success. We saw minimal problems. We saw identifiable ways in which we can improve for the future. Did a press conference at 9:00, talking about the winners and all of that.

Jocelyn Benson: (07:34)
And then 10 o'clock, I got a call from the governor letting us know that the first two cases of Coronavirus had come to Michigan. At that moment, everything changed. At that moment, we had three elections remaining. A local election in May, an August and November statewide election. And we immediately began pivoting, adapting and adjusting. Following the data that we already had about what citizen behaviors were going to be, voting behavior. We already knew more people were going to vote absentee this year than ever before. We were already preparing an infrastructure for that. But we realized the important, and this was probably the most important pivot that we embraced right away. The need to educate every single citizen about how exactly to vote absentee in order to be able to vote from home, regardless of how long the pandemic went on.

Jocelyn Benson: (08:20)
And then secondly, making sure that [inaudible 00:08:22] knew about that, had faith in it, but that our infrastructure was ready for more people voting absentee than ever before. So our work quickly shifted to that, to planning out that and really educating citizens about how to vote in this new era. And this is the last thing I'll say, because this was very important. We did not want to set any ... we immediately knew there would be an effort potentially to postpone elections. And we had our next election in May. And so for me, it was very important to demonstrate that we could successfully manage a local election in May, an election in August and ultimately November in a pandemic, where delaying or postponing an election was off the table. And instead, it was about adapting and adjusting to ensure every citizen knew how to still participate, exercise their vote even in the midst of a pandemic.

Elliot Berke: (09:10)
Brad, how about you from your perspective? How did you first start preparing for the pandemic? And how did you prepare for what turned out to be an unprecedented volume of mail and balance?

Brad Raffensperger: (09:21)
For us, in Georgia we have 15 days plus a Saturday of early voting. So we had 16 days for the presidential primary. We were in the second week, and that's when we had to postpone the presidential primary because it just had reached the pandemic portion. The General Assembly suspended operations. And daily, we were having fewer and fewer poll workers show up just because of the pandemic. So we had to postpone that, and immediately then push out the balance of the presidential primary to the June primary, our general primary for all of the other State House and State Senate seats. So we began a very robust program, what does that look like to vote in a pandemic? And number one, we send out absentee ballot applications to the active voters so that they could decide if they wanted to vote from the convenience of their home.

Brad Raffensperger: (10:09)
At the same time, we had to find all sorts of PPE, so that we make sure that we could vote safely. It was very challenging for the counties, the county election officials. We have 159 county. The second largest number of counties after Texas, we have a lot of counties. That's a lot of moving parts. And so many of their employees were not coming into the office. So how do you vote and get ready for the June primary? We had the general primary in June and in that the ballot, if you had not voted in the presidential primary you could vote at that time for the presidential primary. Out of the 159 counties, I would say 154 did a good job. We had five counties that struggled. And one of those was Fulton County. And coming out that we got a consent decree with them so we could put a monitor in there to make sure they really worked on improving for the November election.

Brad Raffensperger: (10:58)
We had the November election, and we have several focus points. And one of those was to make sure that we could shorten the lines. We had very long lines in the June primary when people decided they wanted to come out and vote in-person. And so on election day in November, our average wait time was about two minutes or less in the afternoon. We had record turnout, believe it or not in the June primary. We also had record turnout in the November race. We had record absentee ballot applications and balloting. We had record in-person voting, and then we ended up with nearly five million voters vote. That's up from about a million what we had during the 2016 race. So with the interest that we had from both sides of the aisle. Obviously for us, that's really I guess you could say when the excitement started, because Georgia has been reliably red for about 20 years on the presidential races.

Brad Raffensperger: (11:57)
And many of us are really on both sides. I think the democrats were surprised that they ended up having more votes for President Biden than President Trump. And that's when really the big disinformation campaign started. But then in Georgia, we have run offs. And then we had two Senate races at and run off in January. So we've actually had a lot of races over the last year, five races all under a pandemic. So it was a very challenging situation. Our counties really did a excellent job faced with all the obstacles that they had.

Anthony Scaramucci: (12:34)
Elliott, if it's okay I want to jump in. And I want to ask both secretaries the same question if it's okay. And this is a, it's almost a metaphysical question in a weird way. So you're coming out of law school, you're coming out starting your career and you're going to be the secretary of state of your respective states. What did you think about the continuum of the United States and it's democracy when you were a kid? And what are you thinking about it right now in terms of its preservation? Let's start with Madam Secretary.

Jocelyn Benson: (13:11)
I think that's such an important question because for me, and this is why I got into this work, I realized that it's the people who occupy the positions in a democracy, both as administrators and as elected officials, and the voters themselves that ultimately will ensure democracy survives. And I was really struck by that because I started my career in Montgomery, Alabama investigating hate groups and hate crimes all around the country. And being in Montgomery, being so close to Selma, spending a lot of time in Selma, talking with people who'd been actively involved in the creation of the Voting Rights Act and the march that preceded it really instilled upon me a sense that democracy is a living, breathing, organic thing that we must and every generation must embrace our responsibility to keep alive.

Jocelyn Benson: (13:54)
And so for me, I became a lawyer because I wanted to do voting rights work. And I wanted to continue the work of those in Selma to protect every person's constitutional right of one person one vote on election day. It's the one day which we have a constitutional protection that we're all equal. And seeing how far particularly after the 2000 election we really had to go to make that a reality, I wanted to make my career one piece of an effort. I just wanted to be another foot soldier in the movement to protect everyone's right to vote. And for me, that meant being a lawyer originally. And then after the 2000 election, I began to see that secretaries of state, particularly after 2004 with Ken Blackwell in Ohio played a pivotal role in making decisions every day to ensure that the right to vote really is realized for everyone.

Jocelyn Benson: (14:41)
So I wanted to occupy this position to be a secretary of state in furtherance of all who've come before us to protect our democracy. And then of course, we certainly saw the cycle how election administrators at every level, and everyone with a place of authority have that really critical responsibility to protect the republic, to protect our democracy from those who would seek to damage it.

Anthony Scaramucci: (15:06)
Secretary Raffensperger.

Brad Raffensperger: (15:09)
I think our form of government is very difficult to protect if it doesn't have the most basic of things and that's integrity. And I think that we always need to be looking at what is the character of the person that I'm supporting. And then we can look at the cause, because both sides of the aisle we have our causes, but it's really the person that is carrying the banner and really at all elected offices. So it's begins at City Council, and I've been on City Council, the state rep state senator, but really need to look at basic integrity. And I think we also have to look at basic common decency. One of the advantages I have of serving in the General Assembly that it was like a big mosh pit.

Brad Raffensperger: (15:50)
We had Democrats and Republicans, we all sit amongst each other instead of being on one side of the other sway conversations. I think we need to have more of those conversations about policy that are respectful with each other. It doesn't mean that we change our viewpoints, but maybe we take a little bit of what someone says and we can have conversations to move things forward. At the end of the day, people want government to work for them. I think it has to start with personal integrity. And that's one thing I did say to everyone that had concerns about the election. We have 159 counties that run the election. If you look at your county election directors, what guides them is their personal integrity. As long as they walk that line of personal integrity, then you don't have much to worry about. The political parties need to turn out their people. But we have personal integrity of the people running elections. It's all going to work out at the end of the day.

Elliot Berke: (16:43)
I think that's exactly right, and it's somebody that's practiced in this area for 25 years. The challenges to the integrity of our system is something that I really spend a tremendous amount of focus on. And this Congress that we have about voter fraud and how widespread is it, does it exist in voter suppression. It really is a conversation that doesn't focus on the realities of our system. And what I know is that fraud occurs just as oppression occurs, and no amount of it should be tolerated, because any challenge to it is going to affect the public's confidence in our system. And the last time we were really here as a nation having this conversation was 20 years ago. And [inaudible 00:17:26] through the passage of the Help America Vote Acts and the creation of the election systems commission.

Elliot Berke: (17:31)
I'm curious as to your thoughts on how effective the EAC has been. I'm on the board of advisors of it, so full disclosure there. But it wasn't an attempt to federalize election, it was really designed to come up with best practices and assist the states. And so that conversation obviously is going on right now within the EAC, but I'd be curious as to how effective you think it's been. And I know one of the main areas we're going to look at moving forward is the timeliness of our voter rolls, and how to keep them up to date. So moving forward, I'd love to hear your thoughts on those two questions.

Jocelyn Benson: (18:11)
Brad, you-

Brad Raffensperger: (18:12)
I'll take that one. I am grateful that the EAC is a commission of two Republicans and two Democrats, because I certainly wouldn't want it to be three, two. And I know that the democrats would want it to be the other way. But what that really means is, then you have to come together and really hammer out good policy that both sides can support, because we have very close elections at the end of the day. So you really have to get by, and when you do that I think it helps make our society more stable. From the standpoint of being able to update the voter rolls, that's a conversation that is well past time to have. In Georgia, we have about eight million registered voters. Studies show that on average, the average American 11% of voters move every year. And you just run the numbers.

Brad Raffensperger: (18:57)
That means we have 800,000 people in Georgia moving every year. And if we can't update the voter rolls 90 days outside the election, that's 200,000 voters that have moved someplace. Have they moved out of state? Have they moved within the state? Are they outer precincts, different county? Things like that. And so we need to have something that is very objective based, not subjective. I'm an engineer. And when you deal with objectivity, you can't argue with the facts. You get into subjectivity that's why you need lawyers. And so I really like objective measures, and that's why we also joined ERIC, the Electronic Registration Information Center, which I know Michigan did as well. It's an objective measure of keeping up accurate voter rolls. It's very important.

Jocelyn Benson: (19:39)
I couldn't agree more, and I think it all gets back to the basic foundation of facts and truth and data. That has to guide election policy. That has to guide election administration. And when it does, voters win. And so the EAC has a great role to play. And as someone who one of the first things I did after the 2000 election was work on the Help America Vote Act, and do research to actually collect the data from the 2000 election. Where did spoiled ballots occur? What could have gone better? To inform what ultimately became the creation of the EAC, which was really designed in part as a repository of those facts and that data to help us as we're making quick decisions in election administration, to make them from a place of best practices and truth and data.

Jocelyn Benson: (20:23)
And we saw this year and as Secretary Raffensperger just pointed out how critical it is that whether it's making sure we have accurate rolls, or making sure we're delivering an election system that will ensure voters voices are heard you have to and you should follow what the data tells you. And if you do that and you make policy, not out of partisan agendas, but out of just simply following the data driven solution and best practices, you actually can have a successful election. And that's really what informed our success in Michigan, and I know in other states this year.

Anthony Scaramucci: (20:58)
I guess these are short answer questions. But I'm curious to your reaction to these. First one is, in light of what happened in 2020, are we moving towards a safer, freer and fairer electoral process, or are the two of you worried that we could be making a turn towards a destruction of our democracy?

Jocelyn Benson: (21:22)
I think that question is going to be answered by the people of our country, and our leaders moving forward. Every decision that will be made. The people voters choose to serve as secretaries of state, there's elections coming up in '22 on both sides of the aisle. It doesn't matter, as Brad and I have shown whether you're a Democrat or Republican. If you're just committed to integrity and administering elections, but really it's in the hands of all of us. We've seen how close we can come, and I'm sure those challenges will continue. I'm confident that they will, those challenges to the safety of our democracy, those challenges to people's votes, they will continue. The question is what will the majority of America do in response? Will we dig down and protect our democracy as we did successfully in 2020? And I think what I know right now is if we don't, then indeed we could move away from the republic that I know we all cherish.

Brad Raffensperger: (22:20)
Our General Assembly is meeting right now, and there are several bills under consideration. I think at the end of the day, you'll see bills that really have the appropriate level of accessibility balance with security. And when you do that, that is really the balancing point. We need to have accessibility, we need to have security. I think that's when you have those honest conversations. I'm also very grateful that many states like ours, we've moved to a verifiable paper ballot. And so therefore, if you need to have a recount, we actually have something that we can recount. We had electronic voting, you just press the button and get the same answer. But we'd have the verifiable paper ballot, we verified the initial count. And then we could actually count that twice, which we did in Georgia. So we have three counts on that. And each one of them verified the results. And it's tough to argue with a piece of paper when it has a name on it.

Anthony Scaramucci: (23:10)
Yeah. Well, my friend Chris Krebs says it's very hard to hack paper. I know you've heard him say that on more than one occasion. So I guess what I'm asking is about awareness. The fact that more people are aware, at least I'm hopeful that that will lead to even further integrity. I want to switch to another quick question. Jill Lepore, who wrote a book called These Truths, who's former alumnus of Tufts University and a greatest story. And she more or less says in the book that voter suppression is as old as any American tradition. And she more or less says that voter suppression is like apple pie in America, meaning it's happened for ever. And she has a lot of facts to support that. I guess I'm going to start with you, Madam Secretary. Do you think we're getting better at not having voter suppression? Do you think we're getting more open, or do you think we're heading towards even more voter suppression in the future?

Jocelyn Benson: (24:06)
Well, I think we're dealing with a democracy that ultimately is about the distribution of power in our country at the state and federal level. You're always going to have efforts by bad actors to use the political system for other partisan agendas in a way that enables them to have power. And manipulating that sometimes comes through the act of making it more difficult for certain communities to vote, particularly historically disenfranchised communities. And indeed, the whole history of our democracy has been a story of that. And it would be naive of us to think that the efforts that led to the disenfranchisement of historically underrepresented communities in particular and voter suppression over time.

Jocelyn Benson: (24:47)
There's no evidence to suggest that that has gone away, or that anything has diminished. Perhaps the ways in which that evolves. And the way in which suppression manifests itself in our democracy has evolved. But every generation, as Congressman Lewis says, has the responsibility on you to fight those efforts. Knowing that they are almost endemic to the political system that we are in. And only when good people on both sides of the aisle demand, ensure every voice is heard and every vote is counted that we can truly ensure we overcome that endemic effort to suppress people's voices. But make no mistake, it's always been a part of our system. And it would be naive of us, I think, just to think it's gone away.

Jocelyn Benson: (25:33)
And again, that's why voters need to choose elected officials and election administrators who are going to stand with them, and making sure their votes are counted and voices are heard regardless of who wins, who loses and any political affiliation.

Anthony Scaramucci: (25:47)
And how do we stop it Secretary Raffensperger? How do we make it more available to people, the right to vote?

Brad Raffensperger: (25:54)
When I was running for office for secretary of state, at some point it hit me that this is the birthplace of Martin Luther King, Jr. And this is a tremendous responsibility really based on the history that we have had in Georgia. And therefore, we have done everything. I know that when Stacey Abrams lost, she talked about voter suppression. But if you really look at the facts, I know it made great narrative what she said, but if you looked at her facts, we have 16 days of early voting. We have record registrations, we have record turnout. We also have opt out when you will be registered to vote when you get your driver's licenses. It's real ID compliance, we have security with accessibility. And I really believe that Georgia has made tremendous strides.

Brad Raffensperger: (26:36)
In fact, we've made such great strides that's why today we have businesses flocking to Georgia. That's why we have six million people that live in the metropolitan area. That's why George has expanded. And some of the others southern states never got that message. And so we've already really led, and we have come together as an organization. And I feel that we've done a great job in Georgia, and I believe that our general assembly will continue to lead. Basically, we have a motto in Georgia, it's our official motto. It's wisdom, moderation, and justice. And those are three great chords of a strand. And we continue to build on that, Georgia will continue to move forward.

Elliot Berke: (27:22)
Secretary Benson, another major issue that came up this election was with ballot harvesting, another chain of custody issues. Moving forward, what do you see in terms of steps that can be taken to bolster integrity of the process by taking this the eyeing that process and eliminating ballot harvesting?

Jocelyn Benson: (27:44)
I think it's a couple of things. One, in Michigan and in many other states, we don't have that ballot harvesting. It's not permitted. You actually have a clear chain of custody under our law for what ballots can be voted, and then delivered and counted. And it's all validated by the voter's signature. No voter can get a ballot. It's mailed to them or given to them without signing an application, that signature must then match the signature file. And then that only gets them a ballot. The ballot actually isn't counted unless the voter actually signs the outside of the envelope, and then returns it on time. And then that signature is then match.

Jocelyn Benson: (28:19)
So there are several protocols in place that many states have developed like that to ensure that you have provisions in place that protect the integrity of the process, without making it more difficult for someone to cast their vote. And I think that's the heart of, to get back to the previous question as well, is how do we basically protect the integrity of the process while also ensuring that every voter's voice is heard. And it comes down to and this is what the EAC and data can really inform, how you ensure you're making data driven decisions that ensure that you meet voters where they are, give them options to cast their ballot.

Jocelyn Benson: (28:54)
And then make sure every option, whether it's a paper ballot in-person, whether it's voting through the mail, with the signature protocols in place is covered with various integrity mechanisms to protect the integrity of the vote. And actually, the thing I found this year both with ballot harvesting and just all the other things is that it's two sides of the same coin. Number one, we build the infrastructure that's secure, that's accessible, that's fair. And that can stand up to amend scrutiny, as we did, as Brad did in Georgia. But then the other side of it is that you have to educate people about how to use that system, how to play by the rules and ensure their votes are counted.

Jocelyn Benson: (29:29)
How to be accessible, but also again, educate them on the role they must play. And then in doing so, you can also empower voters to push back against misinformation that isn't based on data. But is furthering a partisan agenda, but is instead lies fed to voters about false words on the election integrity. And then through educating voters about the truth, they can be empowered to recognize a lie before it hits the airwaves when they get it, and resist it. And we saw a lot of that happen in Michigan, a lot of that work in Michigan. So it's multifaceted, but voter education is a key component.

Elliot Berke: (30:08)
Secretary Raffensperger.

Brad Raffensperger: (30:10)
One of the first bills that I worked on when I got in Secretary State's Office was House Bill 316. And what that did was outlaw ballot harvesting. So we understood that, and we've been working on that. But it's interesting because of the disinformation campaign that we've just been under. We have many voters that are writing to us, pass a lot of outlawed ballot harvesting, because it had been told to them it was going on in Georgia. It's been outlawed, and we do investigate it. And when it comes before the state election board, we will prosecute.

Elliot Berke: (30:40)
Yeah, I think that's also something we've learned in this process too, is that the disinformation campaign is so vast that even amongst lawyers arguing these cases at least publicly, not so much in court at times, which we saw was vacuous. But they would talk about things that there were concepts, but they weren't necessarily occurring in the jurisdiction or in some cases, the over voting or under voting issue as if it was a smoking gun on something. And it was just a demonstrable ignorance of the process. And I think that's a big takeaway is that we just have to do more, and continue to educate the public as to how our election system actually operates and what is normal.

Elliot Berke: (31:25)
Mistakes happen all the time, but they don't necessarily mean that they're systemic. And in some cases, a concept, it's like watching on CNN or Fox about a high speed car chase. It doesn't mean it's happening in your neighborhood just because they show it. So moving forward, I think that's something that we're all going to be responsible for helping out with.

Jocelyn Benson: (31:48)
Yeah, and I hope that can be an outcome of this past year, where we've seen exactly what happens when you see a diminishment of civics education and historical education over time. And then you have an electorate or parts of an electorate that can be susceptible to lies about the integrity of the process. And it's heartbreaking, because you know people are lying to them to further their own political agendas. And as a result, you have citizens who have every right to believe that the process is secure, and that their votes were counted even if they're unhappy with the outcome. There's every reason to believe that all the data shows they should, yet they'll believe lies that are furthering a political agenda. And we need to better equip our citizens, and empower our citizens to push back and recognize lies when they're told to them so that we can protect them and the furtherance of our democracy.

Anthony Scaramucci: (32:42)
So let's let's dispel some of those lies, which is reason why we're calling it election integrity and truth series. Walk us through the chain of custody for mailing votes in your respective states. Why don't we start with you Secretary Raffensperger?

Brad Raffensperger: (33:04)
During the pandemic, we stood up an online portal for people that wanted to request an absentee ballot. First of all, it took the human element out of it because the counties were short staffed. But they would put in their driver's license number and then their birthdate day, month and year. So that way, we could make sure it truly was the person wanting that ballot, requested that ballot. So for the first time, we in effect had voter photo ID because it connects you to Department of Drivers Services. Once that was done, then it was processed and then an absentee ballot was sent out to the voter. When it showed up on your doorstep, then you'd open it up, make all your selections, close it up and sign the envelope.

Brad Raffensperger: (33:45)
Then when it came in, the signatures were matched. We actually did a signature match audit study for Cobb County since we had actual complaint at that county. And we found out of 15,000 sample size, we had two ballots that did not match up. And it was actually the spouses that voted for their husbands. The husbands knew that they were voting for them. But the point is that that signature match was being used. But then so we have chain of custody throughout the entire process through there. But it's the one area because it's not under the control of an election official with all eyes on it, that does raise the greatest amount of concern of voters. And we understand that, and that's why we want to make sure that there is a strong chain of custody, and strong voter identification. So that you know that it's truly the voter that requested the ballot.

Jocelyn Benson: (34:37)
Yeah, and here in Michigan it's very similar. And again, these are best practices that are in place in states all across the country, where you have in Michigan two signature checks as I mentioned earlier. One on the application when a ballot is requested. And then when the ballot is returned, the voter signature is again verified. And we actually implemented also in Michigan standards for signature evaluation working with clerks. And we're going to continue to make improvements where we can in ensuring our 1,600 clerks have all the tools and resources they need to have that double signature check process continue to be one that is following the best practices in matching signatures, and ensuring a verification of the voters identity.

Jocelyn Benson: (35:22)
And then after that, we also have a requirement that ballots be received by election day, either in the clerk's office or at a local drop box. And we put in more than 1,000 drop boxes all across the state of Michigan to ensure citizens could meet that requirement. And then after that, after the clerk verifies the signature and records the receipt of the ballot, they also then bring it to the counting board. And there's a bipartisan counting board that actually counts the ballots with plenty of observers as well. We had hundreds of people all across the state including in Detroit and Southeast Michigan observing the actual tabulation of the ballots once brought to the counting board.

Jocelyn Benson: (36:03)
So it's a multi-factored multi-step process with security checks in every step of the way to ensure that only valid ballots are being counted. And it's one that we're really proud of. And I think in Georgia as well, you saw that the actual process worked very well this year. And I was so grateful that you all started by mentioning the success of this year's elections, because that's really the true story here. Is extraordinary successful election. And it was so successful that it was able to stand up to a historic effort to undermine that truth among our citizens. And so moving forward, we have much more to learn than anything else from this election cycle, including how to ensure the integrity and security of the process. And that's great scrutiny.

Anthony Scaramucci: (36:45)
But I want you to state that definitively Madam Secretary, because people get all of this disinformation. From your observation at your state and in overall the election was ... I don't want to put words in your mouth. But tell us what the election was in terms of its freedom and fairness.

Jocelyn Benson: (37:08)
I think this was the most successful election Michigan has had in recent history. We had more people vote than ever before. We had secured elements of the process from top to bottom. And in the midst of extraordinary amount of scrutiny, which had there been any significant wrongdoing or problems, it certainly would have been found and revealed. And instead, we were able to meet every element of misinformation every rumor with the truth and the facts and the data. And the hard work that our election administrators put into ensuring the election worked, and was extraordinarily successful. And that to me, is ultimately the story of the 2020 election.

Anthony Scaramucci: (37:45)
No, look, it's an amazing story. You're a great patriot. Secretary Raffensperger, who won the 2020 presidential election in the state of Georgia?

Brad Raffensperger: (37:56)
President Biden did, about 12,000 votes.

Anthony Scaramucci: (38:02)
Elliot. You see any issue with that Elliot, or?

Elliot Berke: (38:05)
I don't. I mean I actually obviously follow these things closely. I'm very familiar with [inaudible 00:38:13] office. I've represented them before the Congress with respect to allegations made on the last election. And so we know what to look for, and I know who to speak with including members of Election Assistance Commission. There was no daylight between anybody in this space that actually works on this stuff in terms of what happened. One of the things that was interesting to me was I've run war rooms at the national and state level. And you run war rooms, typically what you start to see is things happen. So you say in this county, this is going on. In this county, this is going on. That doesn't mean that there's an attempt to steal the election. It means that something is going on.

Elliot Berke: (38:56)
A lot of times you work with your election day officials, and you fix it. And I just didn't hear that much going on with respect to at least the [inaudible 00:39:07] in terms of concerns they were raising election day. Everything came out of post election. And a lot of what we heard, a lot of it was allegations. Some was made in court, some was made outside the courtroom were things that could have been addressed. And when more appropriate if they had been addressed election day, and there could have been confidence on their side that they were being handled in a way that made them feel comfortable. But then it took its own direction, it became something else.

Elliot Berke: (39:44)
And one of the things I think also is a big story of this election that we haven't touched on, but it was something that Mike Chertoff brought up. He when we did our talk earlier this month, he said he [inaudible 00:39:56] concerns going into the election. One was cyber attacks taking out polling stations. The other two were violent actors attempting to intimidate voters. We talked about that to some extent. And then of course, question every election and it's something we've all talked about many times. We'll get to that in a few moments too. But with respect to the cyber attacks, it is also a great success story. We don't know yet about attempts that weren't successful.

Elliot Berke: (40:25)
But we do know, I think with a high degree of confidence, and I think this is what Chris Krebs was really speaking to. And by the way, when he was speaking in that statement that ultimately got him fired by the President. It was a joint statement by again, every federal state and local official that has a stake in this process in terms of Secretary Benson and Secretary Raffenperger said the confidence that they had in the election outcome. But what you think that it is that we have been relatively successful in wording cyber attacks by foreign entities where elements of our critical infrastructure have not?

Jocelyn Benson: (41:04)
Well, it's interesting. I can't speak to elements of infrastructure, but I can say back to what you were saying earlier about how everything went very smoothly. There were a lot of eyes on the process leading into the election. One of the first meetings I had in February, I was sworn in in January 2019. A month in, I was in D.C. with my colleagues and Secretary Raffensperger was there too. Meeting with the federal authorities about how to force cyber attacks in our elections. It was something we had identified early on as the probably biggest security threat, real security threat to our elections. And so every step of the way, we methodically did everything we were supposed to do. Shared information, coordinated with local and federal officials. Identified funding needs and filled them when they existed. Put in great experts at the state level to help with the federal.

Jocelyn Benson: (41:54)
There is information sharing. Everything you're supposed to do, we did. And I think that's in part why we did see the system prove to be impervious to any potential attempted cyber attack. And again, that's a great success story. And then again, to underscore your point earlier, election day we were planning it for years, for two years for a bunch of all these things. Violence at the polling stations, all these things we had planned for. And coming out of the voter protection world, that's what you do. You anticipate and you plan for it. And it was amazing that things went as smoothly as they did. And then it wasn't for us and for about 4:30 on Wednesday, 24 hours or so after the polls closed when word started to trickle out that Biden ... I think CNN shortly ran that time poll by Michigan for Biden that the fire hit our state and the attacks began.

Jocelyn Benson: (42:46)
The perception of the misinformation, all of that really escalated at that point, which was really telling. Gave me a lot of pride, because we did it. We successfully managed an election. Now we just had to fight the misinformation and the narrative battle. We actually did the work well. And again, that was because we've been working on it for as long as possible since I took office.

Brad Raffensperger: (43:09)
Well, we're concerned to Secretary Benson's point, whenever we meet with the National Association Secretary of State, I would think that we talked about cybersecurity probably 30 to 40% of the time. So we understand it's all of our radar. And so we had some potential threats that nothing ever penetrated our wallet defenses, but it doesn't mean we can never let up. And that's the thing is coming in the next cycle in 2022, we have to remain vigilant. There's hackers out there. There's actors from all over the world, and also national actors that would love to disrupt elections. We understand how critical it is. If you can create distrust in elections and somehow enter the database, do something on election day it is highly damaging to our society.

Elliot Berke: (43:56)
Yeah, I couldn't agree more on that. So getting into the questioning the integrity of the election. Our time is short, and I'm not going to go through every allegation, every court filing. I'm sure you don't want to either. But-

Anthony Scaramucci: (44:13)
I want to Elliot. I want to. It's important to me.

Elliot Berke: (44:16)
We'll schedule another time for that. But can you talk a little bit just in terms of the underlying litigation strategy when you get ... this was the volume again was nothing that we'd seen before. So how do you prepare for that? Brad, we'll start with you.

Brad Raffensperger: (44:35)
I guess we had good preparation. Stacey Abrams led that back in 2018. When I got here in 2019 we I think had 11 lawsuits on my first day, and we ramped it up to 14. And so we continue to beat those down. And then we had, obviously the Congress asking questions too. So we were ready and prepared. And then the Trump campaign started making a lot of allegations, and then we bit by bit knocked out every one of them. And none of them prevailed in a court of law.

Jocelyn Benson: (45:05)
Yeah. I think to Brad's point, it wasn't a legal strategy. It was a PR strategy designed to erode the public's confidence in our democracy. And so calling it what it was early on was critical. Allowing cases to be filed at first that I mean, look, if people have actual evidence of wrongdoing, then let's have that process work out. And then it turned out there was no evidence of wrongdoing, and yet the legal cases continued. And that's when it became even more apparent I think to more people that it truly was just a PR strategy. And my work as well as the work of others involve became twofold. One, telling the truth, affirming people's faith in the process, allowing the data and the facts to carry the day.

Jocelyn Benson: (45:48)
And then calling out the bad actors for what it was, which was a partisan agenda to again erode the public's confidence in the process. And to consistently do that was critical. And I had great gratitude that the judges, the members of our state board of canvassers, the members of our local board. Every person in the process who had a critical role to play in upholding the truth, followed the oath of office that they took and did just that. And that's really why we're able to stop a political agenda partisan PR campaign designed to undermine the democracy from ultimately being successful.

Anthony Scaramucci: (46:28)
Brad, can you walk us through the calls that you had with President Trump, and how you and your team prepared for them?

Brad Raffensperger: (46:36)
Well, the call ahead was in the Sunday or Saturday before the runoff election. Didn't have a lot of time to prepare, but we had been well versed in all of the facts on our side. Had a conversation and really became obvious very early on that was really he was repeating all of the disinformation that we've been facing for two months. It was very unfortunate, but Rudy Giuliani came down to speak before a state Senate committee meeting. And he made all sorts of allegations about what happened at State Farm, and they sliced and diced the video. The video is a 24/7 video and they took out portions of it, that it appeared to show that there was ballot stuffing. Unfortunately, we were not asked to come to that committee hearing.

Brad Raffensperger: (47:27)
We were not allowed to put rigidity on it and cross, and really slice and dice until I show them what they actually were doing. But we did get a hold of WSP the next day, showed them the whole run of the video and said this is exactly what happened. And we got brought in other news media sources. And so that was totally debunked. But President Trump, virtually a month and a half later, was still holding on to that debunked theory. And so it really is the entire list. He talked about that there was 5,000 or 10,000 dead people that voted. To this day, we found two dead people. Obviously, they didn't vote, but somewhat falsified it and we're looking for those people. And we're having an ongoing investigation, and we'll prosecute those folks.

Brad Raffensperger: (48:11)
But those are the types of misrepresentations that were given to him. At the end of day, I don't know if he believed it and we just wanted to believe it. And what did come through is that he had large rallies of people. And that can really give a candidate a false sense of security when everyone is showing up to hear you. And a lot of times you have people that came to multiple events, and really were traveling around the regions to come to these events because they are entertaining if you like conservative rhetoric. I happen to like conservative rhetoric. And so I can see why people went to those.

Brad Raffensperger: (48:47)
They were entertaining, but I think it gave the president a false sense of support that he had. And he didn't understand that in the metro regions, that there was a huge erosion of votes there. And that showed up, and that's why Senator Perdue got about 20,000 more votes than he did in the metro regions.

Anthony Scaramucci: (49:08)
Listen they had to be tough calls for you, and we obviously appreciate what you went through work. We're going to close out in a second, but I think it's important for our listeners and viewers and for the record, I'd like to start with you Secretary Benson. What do you want the American people to know about their electoral process, and the guardians of their democracy and where things are going?

Jocelyn Benson: (49:36)
It's up to them if we're going to have a healthy democracy. It's up to all of us to protect it with every election every day, every month. That there are forces at play as there has been since the founding of our country that would seek to minimize people's voices and their power in a democracy. And by electing secretaries of state on both sides of the aisle with a commitment to integrity and protecting their voices in vote, we can ensure that the infrastructure is secure, because the work that we've done demonstrates that. But that they also have a role, that we all have a role to play in voting and staying engaged and holding accountable those who would seek to lie or manipulate to further their own political agenda and harm our democracy as a result.

Jocelyn Benson: (50:18)
And by doing so, by truly all of us being engaged, regardless of how we feel about a particular issue or what our party affiliation is, but committed to democracy. Our democracy can flourish and thrive and grow, and continue to be that beacon on the hill that the founding fathers wanted it to be, and that we all hope it can be. But it's going to be up to all of us to make sure that it is.

Anthony Scaramucci: (50:39)
What did we leave out, Brad? That was very well said, by the way, Secretary Benson. What did we leave out Secretary Raffensperger?

Brad Raffensperger: (50:46)
Well, a year ago I said that 50% of the people would be happy with results, 50% would be hurt. I understand that they've been polarized times. I wanted voters to have 100% confidence in the results. And they can have confidence in the results, because 159 of our election directors have personal integrity. This office runs on integrity, we're going to make sure that we have fair and honest elections in State of Georgia, with the appropriate accessibility and also security of our systems.

Anthony Scaramucci: (51:16)
Well, I got to tell you as an American I so respect the two of you. And as somebody that loves the country, I would always put our democracy and its constitution and the integrity election over policy, which the two of you guys have done. So just my heart goes out to you. Great, thanks. My colleague, Elliot Berke, thank you for helping me get out of Washington unscathed. It was a brutal experience for me, and I appreciate you doing that. Now let me turn it over to the millennial, who's the only reason why he's on this is because he helps us with our ratings with his shockingly good blonde hair. Did we miss anything, John Darsie?

John Darsie: (51:57)
I would just like to point out that technically it was General John Kelly, who got you out of Washington, Anthony.

Anthony Scaramucci: (52:04)
Yes, it was. He did. He pressed the eject button like we were in a James Bond car. Okay, but I landed nicely because of Elliot. I'm setting the record straight on election integrity and my firing. How's that, John? Is there anything else you want to bring out?

John Darsie: (52:20)
No, I just want to thank like Anthony said, Secretary Benson and Secretary Raffensperger. Also, the personal toll that it's taken on you guys. We didn't get to that topic, but I know you guys your lives have changed and you became household names. And maybe in a way that affected your life in ways you never expected before the 2020 election. But you guys have not shrunk from that challenge. And you've embraced the fact that you're going to have to be out front fighting the misinformation and everything that comes along with it. So thank you for that on a personal level as well. And just thank you, again, so much for joining us here. We hope to do this again in the future.

John Darsie: (52:55)
I think continuing to reinforce the integrity of our elections, and the confidence in our elections is not going to be solved through one webinar series with SALT or anybody else. It's going to be an ongoing process of maintaining and reinforcing that confidence. So hopefully, when we can do live events in the future as we were talking before we went live. We hope maybe we can reprise this conversation in the near future in person. So thank you.

Brad Raffensperger: (53:20)
Thank you.

Jocelyn Benson: (53:23)
Look forward to it. Thanks, guys. Honored to be part of the conversation.

Elliot Berke: (53:25)
Thank you again.

Anthony Scaramucci: (53:26)
Appreciate it.

John Darsie: (53:28)
And thank you everyone who tuned into today's SALT talk, the third and final episode for now of our election series focused on elections operations and elections integrity. Again, our goal with this series is just to expose people to the truth. To put the truth into the sunlight about what happened in the 2020 election so they can have confidence in the process as Secretary Benson and Secretary Raffensperger said in the face of a historic global pandemic, and intense pressure coming from the federal government these states were able to execute what was one of the fairest and freest elections that we have on record. So very grateful for all the work they've done. And all the pressure they've withstood, that could potentially have led to an erosion of our democracy.

John Darsie: (54:11)
So thank you to them. And thank you for tuning in and learning about the process. That's important as well that people come into these things with an open mind. Just a reminder, if you missed any part of this talk, any of our other election series talks, one was with former Department of Homeland Security Secretary, Michael Chertoff. The other was with two members of the Election Assistance Commission that Elliot Berke was speaking about, that was Don Palmer and Benjamin Hovland of the Election Assistance Commission. So if you missed either of those episodes, please go to our YouTube channel. It's SALT tube.

John Darsie: (54:48)
You can watch them there, and you can watch all the episodes of SALT Talks that we started doing in May as the pandemic clearly became a long term issue that was going to force us to have to postpone or cancel our conferences. So please spread the word about those talks and about these elections SALT Talks in particular, because we think it's extremely important that people learn the facts of the situation. Please follow us on social media as well. We're most active on Twitter @SALTConference where we live tweet these episodes and air a lot of the episodes that we broadcast live on our Twitter feed. We're also on LinkedIn, we're on Instagram and we're on Facebook. And on behalf of the entire SALT team, that wraps it up for today. Thank you for joining us again. We hope to see you back here again soon on SALT Talks.

Michael Dyson: “Long Time Coming: Reckoning with Race in America” | SALT Talks #161

Michael Dyson is an academic, author, ordained minister, and radio host. Dyson has authored or edited more than twenty books dealing with subjects such as Malcolm X, Martin Luther King Jr., Marvin Gaye, Barack Obama, Illmatic (Nas's debut album), Bill Cosby, Tupac Shakur and Hurricane Katrina.

Long Time Coming grapples with the cultural and social forces that have shaped our nation in the brutal crucible of race. In five beautifully argued chapters―each addressed to a black martyr from Breonna Taylor to Rev. Clementa Pinckney―Dyson traces the genealogy of anti-blackness from the slave ship to the street corner where Floyd lost his life―and where America gained its will to confront the ugly truth of systemic racism. Ending with a poignant plea for hope, Dyson's exciting new book points the way to social redemption.

LISTEN AND SUBSCRIBE

SPEAKER

Michael Eric Dyson.jpeg

Michael Eric Dyson

Author

Long Time Coming: Reckoning with Race in America

MODERATOR

Anthony Scaramucci

Founder & Managing Partner

SkyBridge

EPISODE TRANSCRIPT

John Darsie: (00:07)
Hello everyone, and welcome back to SALT Talks. My name is John Darsie. I'm a managing director at SALT, which is a global thought leadership forum and networking platform at the intersection of finance, technology, and public policy. SALT Talks are a digital interview series with leading investors, creators, and thinkers. And our goal on these SALT Talks is the same as our goal in our SALT conferences, which is to provide a window into the mind of subject matter experts as well as provide a platform for what we think are big ideas that are shaping the future.

John Darsie: (00:39)
We're very excited today to welcome Michael Eric Dyson to SALT Talks. He's a well known author as well as a contributor to a lot of major publications and media outlets. But I'll read you his full bio now, and hopefully he doesn't blush, because he's accomplished a lot in his career already.

John Darsie: (00:57)
Michael Eric Dyson is a professor of sociology at Georgetown University. His 2019 New York Times bestselling nonfiction book, Jay-Z, Made In America, is the recipient of two starred reviews from Publisher's Weekly and the Library Journal. He speaks on Jay-Z's career and his role on making this nation what it is today. He's an author, a contributing opinion writer at the New York Times, an MSNBC political analyst, a contributing editor at New Republic, the host of the Michael Eric Dyson Podcast, featuring Dr. Dan Ratner, an ordained Baptist minister for over 30 years, and received his PhD from Princeton University in 1993.

John Darsie: (01:37)
Dr. Dyson has authored nearly 20 books on subjects such as the legacy of Martin Luther King, Jr., in April 4th, 1968, Malcolm X, Nas's debut album, Illmatic, Tupac, Marvin Gaye, and Hurricane Katrina's devastating and long lasting effects. He won two NAACP Image Awards for Outstanding Literary Work in Nonfiction, and the American Book Award in 2007 for Come Hell or High Water, Hurricane Katrina and the Color Of Disaster.

John Darsie: (02:08)
Essence named Michael Eric Dyson one of the 40 most inspiring African Americans, and Ebony listed him among the 100 most influential black Americans. He often speaks at universities and political conventions, and he's also known for speaking engagements at union halls, prisons, classrooms, and churches, and now on SALT Talks. Throughout his career, Dr. Dyson has had a profound impact on American culture and thinking. His book, What Truth Sounds Like, continues the conversation started in his 2017 bestseller, Tears We Cannot Stop, and was the winner of the 2018 Southern Books Prize for Nonfiction.

John Darsie: (02:44)
If you don't already, he's a fantastic follow on Twitter and Facebook as well, where he weighs in on current events in a very informed and insightful way. His most recent book I would recommend everybody pick up, especially given the times that we're living in today, is called A Long Time Coming. So we look forward to telling you a little bit more about that book today, and again we highly recommend you go out and read it. Very hard to read because of the raw nature of how he describes some of these really horrific incidents in American history as it relates to race relations and police brutality, but also very important book that you read if you're not exposed to these issues.

John Darsie: (03:24)
Hosting today's talk is Anthony Scaramucci, the founder and managing partner of SkyBridge Capital, a global alternative investment firm. Anthony's also the chairman of SALT. And with that, I'll turn it over to Anthony for the interview.

Anthony Scaramucci: (03:37)
Michael, he's still letting me host this thing, so I just want to thank John Darsie for allowing me to still be the host on this thing.

John Darsie: (03:47)
My slowly nudging you boomers out of the picture. [crosstalk 00:03:50]

Anthony Scaramucci: (03:50)
Slowly? It's not even slowly, Michael, it's like a shoving. It's not [crosstalk 00:03:53] But I want to hold up the book for a second for the audience. It is a brilliant book, and I will say this to you, that I was introduced to you in 2008, I purchased your book at a Barnes and Noble April 4th, 1968, 40th anniversary of course of Dr. King's assassination. I thought that was also a brilliant book. It's in my, on my bookshelf in my office, actually, at SkyBridge. But I want to get right into it related to this book. You're writing in the book brilliantly about a reckoning with race in America, 300, some can say 400 years of racism, racial tension. We're having a reckoning. Why is this time different, Professor Dyson?

Michael Eric Dyson: (04:47)
Well thank you, first of all, it's been a great Scaramucci for me over the last week or so. So I've had-

John Darsie: (04:55)
Now we're talking, now we're talking.

Anthony Scaramucci: (04:57)
Hold on, professor, it's 11 days a Scaramucci, okay?

Michael Eric Dyson: (04:59)
That's what I said, almost two weeks, almost two weeks.

Anthony Scaramucci: (05:03)
All right, so it's not just a week.

Michael Eric Dyson: (05:03)
Almost a fortnight, almost a fortnight.

Anthony Scaramucci: (05:04)
I told you, it's not a week. It's my only regret about my White House experience, I needed three more days. But that's all right.

Michael Eric Dyson: (05:12)
But you wouldn't have been able ... Then I would have said a fortnight. Now it's a Scaramucci because [crosstalk 00:05:17]

Anthony Scaramucci: (05:19)
Slightly less than a carton of milk lasting in your refrigerator, Mike. [crosstalk 00:05:24]

Michael Eric Dyson: (05:23)
It ain't buttermilk, son. It ain't buttermilk. So, I'm at Vanderbilt now. I just want to announce that to y'all. I'm a distinguished professor there hanging out at Vanderbilt. So look, thank you so much for even engaging me and having me on this incredible platform, needless to say I'm a huge fan, and appreciate your interventions in a conscientious fashion that have really provided an opportunity to see how people who are conservative can be self critical, people who have values and traditions nonetheless are willing to subject them to a serious scrutiny, and that I celebrate you for, my man. Look. I think that it's extremely important to talk about the suffering of these martyrs, why it is that these particular black people that died have occupied such an important place in the society and have catalyzed a reckoning.

Michael Eric Dyson: (06:19)
I think a reckoning is going on. People say, "Well what's different about this?" Well I'll tell you what I think is different about this, implicit in your question, is the fact that a lot of us were at home on our screens, like we are now. The pandemic forced us to have a remote intimacy. We were kvetching about it two weeks before the pandemic. "Oh my god, put those darn screens down," you tell your kids, "Put those phones down." Have more intimate connection with each other. Oh, now this is what we depend on for intimacy. Unfortunately, and even tragically, some people have to depend upon these surfaces and screens to say goodbye to their loved ones.

Michael Eric Dyson: (07:03)
The technology we were dissing a week before the pandemic, we have now come to rely on and depend on in a serious fashion. So a lot of people were at home, in their places of abode when they saw come across their screens, whether it's a computer, or an iPad, or a phone, or an Android, they saw George Floyd's death. And it was astonishing. Like, what? And we were watching far more acutely and attentively because we were forced to these screens. I think that made a huge difference.

Michael Eric Dyson: (07:40)
Secondly, I think all of the asterisks were removed. Usually some white brothers and sisters and others could say, "Well you must have been talking nasty to the cops. Oh, he's going, 'Hey, officer.'" On the ground while he's dying, he's being nice. He must have been running from the cops. No, he's lying prostrated on the ground. He must have been a dangerous black man. Kind of not, because you got three cops on him.

Michael Eric Dyson: (08:05)
In other words, every excuse that people go, "Well you must have, or you must have," removed. White people saw that. I'm generalizing, and went, "Oh hell no. No. That's nuts. We see with our own eyes what's going on here." And I think thousands upon thousands of white brothers and sisters said, "Enough is enough, we're in the streets with black people and brown people and other people who are protesting, this is not right." And I think it offers an opportunity to not only open up the portals of possible protest, but also to grapple with the systemic issues, and let's admit it, on television, where your second home there, Brother Scaramucci, the point is is that a lot of people were talking about systemic racism who hadn't spoken about it before, the language changed, the awareness developed, the meter of consciousness spiked. And people began to really talk about it.

Michael Eric Dyson: (09:05)
Now, it's died down seven months later, eight months later. But that's the natural give and flow. The ebb and take of social change. It's not going to last forever. People's awarenesses spiked. People's awarenesses fueled. But then it dies down. But I liken it to this. When you fall in love in the first time, you're what, you're in love, you got candies and chocolates and violin music and all that stuff. Then when you get married, what are you doing? Oy vey, what's going on? "Did you leave the toilet seat up again? I almost fell in and drowned. Did you squeeze the toothpaste from the top and not the bottom?"

Michael Eric Dyson: (09:45)
But, you get down to the unsexy everyday part, "Who's taking the kids? Who's going to deal with the food preparation? Are you going to share in the household chores?" That's where love is translated into stuff I do that's not big time, that's not sexy, but that makes a difference. And that's where we are racially speaking right now. How do we deal with the systemic issues that are the unsexy part of making a real change in America today.

Anthony Scaramucci: (10:13)
It's so well said, I got so many followup questions. I'm going to hit you with a few rapid fire.

Michael Eric Dyson: (10:19)
All right, [crosstalk 00:10:20]

Anthony Scaramucci: (10:19)
Yes or no questions, because I just want to get where you see things in terms of your pulse on America.

Michael Eric Dyson: (10:26)
Right.

Anthony Scaramucci: (10:26)
Most Americans are good people, yes or no.

Michael Eric Dyson: (10:30)
Yeah.

Anthony Scaramucci: (10:32)
The black community, this is a very big over-generalization, but we are generalizing for this.

Michael Eric Dyson: (10:37)
Mm-hmm (affirmative).

Anthony Scaramucci: (10:38)
The black community loves America.

Michael Eric Dyson: (10:40)
Absolutely.

Anthony Scaramucci: (10:42)
I got to ask this followup question, because I've read this book, I've read the very painful book about the assassination of Dr. King.

Michael Eric Dyson: (10:48)
Right.

Anthony Scaramucci: (10:49)
I took a course at Tufts University in 1984 called Race Awareness. It was taught by a guy named James Vance who was in the American military, and he was a race awareness instructor in the United States Army, to break down the barriers and to explain literal institutional racism. I'm going to talk to you very honestly, professor. I grew up in a parochial family, patriarchal, Italian American family. We bordered on a black community and an Irish community. We were beating the living crap out of each others. Italians, blacks, and Irish. But for whatever reason we all got along because I guess we were comfortable with each other. It wasn't until I got to college and James Vance explained to me institutional racism. I'm 21 years old, I said he's right, we have institutional racism in the society. And yet, do we have a lot of people in denial about that in our country? Yes or no.

Michael Eric Dyson: (11:52)
Absolutely.

Anthony Scaramucci: (11:53)
Okay. So sir, tell me why we have denial, because you're a plain spoken person, you're an amazing writer. Why do we have so much denial? I can look you straight in the face and say there is institutional racism, and there are levels of white privilege. Now having said that, okay, that's not to say that whites have necessarily had the greatest deal ever either too. There's a lot of underprivileged white people in our society. So I'm not really trying to do that over-generalization. But why can't we acknowledge, and we can get black and white politicians on the right as an example, to acknowledge what you and I both know about our society?

Michael Eric Dyson: (12:34)
Yeah. No, it's well stated, and it's well put. And thank you for the compliments as well. Look. Gore Vidal, the late great writer, said we lived in the United States of Amnesia. And I would add very quickly that the theme song is sung by Barbra Streisand. Now we know Brother Darsie has no idea who Streisand is, so we're going to have to help him to who Barbra Streisand is. [crosstalk 00:12:58] It ain't Taylor Swift. It ain't Taylor Swift. But she was a great, great singer, and still is.

Michael Eric Dyson: (13:03)
Barbra Streisand sang a song by Marilyn and Alan Bergman, Memories. What's too painful to remember, we simply choose to forget. We're in denial. As the late Joseph Lowery said, we live in the 51st state, the state of denial. We keep denying. What we don't like, we just pretend it doesn't exist.

Michael Eric Dyson: (13:23)
So it's hard to deal with the issue of race, because it implicates us in a way that other issues don't. Because now it's more like, "Oh, are you calling me a racist? You calling my family a racist? Is it the tradition that nurtured me a racist?" And then it gets personal, and then it gets heated, and then it gets venomous, and then you figure what the hell are we doing?

Anthony Scaramucci: (13:41)
Yeah, professor, I get called a white supremacist on Twitter. I'm a white supremacist. I mean, look, we're throwing labels around at each other in a way that I think is absolutely ridiculous. I mean it's fine, people can call me whatever they want. I learned long ago from my grandmother, whatever you think of me is none of my business. But the institutional idea, am I wrong about this? If you have a problem, the first thing you have to do is recognize the problem. Let's say we were drug addicts. [crosstalk 00:14:08] Okay, we're drug addicts. We have to recover from drugs. The first step is admitting the problem.

Michael Eric Dyson: (14:15)
No doubt.

Anthony Scaramucci: (14:16)
And you're saying it's just too painful to admit the problem. So then how do we get people to feel less pain, or how do we get people to ignore the pain, or override the pain to admit the problem, and have it be more of a universal understanding?

Michael Eric Dyson: (14:35)
Yeah, it's a great point. You usually do that through analogy. How do we learn? We learn through ... You know, it's like this. One thing is like the other thing. So the stuff that you experience on this side, check it out on the other. For instance, and I know we're going to talk about this, but think about January 6th. When people go, "Look, if that had been a bunch of black people, it would have been a different outcome." And I have no doubt that that's true that's not just individual beliefs, that's what you're talking about in terms of institutional racism. That means ... And systemic racism.

Michael Eric Dyson: (15:05)
What does that mean? Everything that has institution or a system connected to it has the potential to perpetuate inequality. Health education, health system, education system, prison industrial complex, prison system. So on and so forth. And the institutions of American society bear the imprint of our beliefs.

Michael Eric Dyson: (15:24)
Now, let's take on what you're talking about in terms of white privilege, what it is and what it ain't. White privilege doesn't mean every white person is going to do well. White privilege doesn't mean that ever white person is going to be rich. Because think about it. Before black people could get into Harvard, Yale, and Princeton, or any major American institution of higher education, when it was only white, we know that there were gradations. Irish need not apply. Italians not seen as part of the Anglo-Saxon Protestant umbrella. The paddy wagon was called that because the Irish were being thought of as getting drunk on the weekends, so we're going to rename the wagon that takes you to the police station after an epithet for Irish people. So we know, Irish, Italian.

Michael Eric Dyson: (16:06)
But then we read the book, how the Irish became white. How Italian American identity got transformed in the crucible of race into whiteness. Even though we know that there are tremendous differences.

Michael Eric Dyson: (16:18)
My point is-

Anthony Scaramucci: (16:19)
And by the way, if you're southern Italian, if you want to talk about denial, most of us have African American-

Michael Eric Dyson: (16:24)
Come on, bruh. Come on, bruh.

Anthony Scaramucci: (16:25)
Descendants. [crosstalk 00:16:25]

Michael Eric Dyson: (16:25)
That's why there's bees, because there's such similarity. There's such-

Anthony Scaramucci: (16:32)
Now Darsie's smiling, because he's whiter than Wonder Bread. We'll talk about that in a second, okay. This guy has got ... He's so white that he's got like 12 essential vitamins. You know what I'm saying?

Michael Eric Dyson: (16:43)
Hey, hey, but white folk, but black folk eating barbecue love Wonder Bread, brother, so hang in there.

John Darsie: (16:49)
I'm with Dr. Dyson.

Anthony Scaramucci: (16:52)
He's actually way more aware, grew up in North Carolina.

John Darsie: (16:56)
I actually grew up in Durham, North Carolina, Dr. Dyson, with a proud history.

Michael Eric Dyson: (16:59)
I've lived there. And I've lived there. And I've lived there. But let me finish this point about white privilege. Here's the point though. The point of white privilege doesn't mean all white people will X, Y, and Z. It meant not all white people will be rich, but the people who will be rich tend to be white. It doesn't mean that all white people will go to Harvard, it meant that all the people going to Harvard were white.

Michael Eric Dyson: (17:19)
That kind of privilege means, or if you meet a cop, and you live to tell about it, you have a likelihood, regardless of your class status, that you have the possibility of engaging in conversation and interaction with the police forces of the nation and law enforcement in a way that might not hurt you, though we know that law enforcement has had horrible consequences on all peoples including white folks. So when we talk about white privilege, we don't mean some pie in the sky idealism that white people enjoy nirvana. It means that when we look at the distribution of resources here in America that race plays a significant part.

Anthony Scaramucci: (17:55)
Okay, so obviously, you can have an objective standard of this or you can be biased and sheltered in your own tribe, and you can pretend that it doesn't exist. But I have a question, and it's really based on reading your book. I want you to explain it to other people. I think you do a great job in the book. How has racism shaped our society in a way that may be invisible to white Americans?

Michael Eric Dyson: (18:20)
Right. No, that's a great point. Look. Great philosopher Beyonce Giselle Knowles said that, look, it has been said that racism is so American that if you challenge racism, it looks like you're challenging America. She's on to something there. Because a lot of white brothers and sisters have not been taught the language of race, not introduced to the notion, hey, even though you're white, that that whiteness is one among many racial identifiers. And that when many white people go, "Why don't you stop talking about race? Why don't you just talk about being an American." That's because you got the privilege of having your whiteness as the default position of America. That when you say the America, you're really talking about your own particular take on it.

Michael Eric Dyson: (19:06)
As a result of that, it's rendered invisible in the beautiful phrase you used. It's rendered like unintelligible to many white people. Because then they say, "Let's just be American, can't we?" What they mean, of course, is that they want to have an overcoming of difference, and an overcoming of barrier, institutional or personal, to become one, E Pluribus Unum, out of many, one. But what they don't often understand is their particular perception of what America is has been interestingly colored by a kind of whiteness that has been rendered invisible. It doesn't seem to be anything that comes into play.

Michael Eric Dyson: (19:45)
That's why, often, when we have conversations about race, it's like what about men? Men go, "Well let's have a conversation about gender." Dude, do you know as a man you have a gender too? It's not just women, it ain't just feminism, it's what you do as a man as well.

Michael Eric Dyson: (19:59)
When we talk to white people, brothers and sisters, we say, "Look. When we talk about race, we ain't just talking about black and brown and red. We're talking about white as well." And if we have that kind of advance in the conversation, I think we'd have a more fruitful discussion about the consequences of race in America, and how we talk about it in a way that is not defensive, but is helpful.

Anthony Scaramucci: (20:19)
And that's the reason why I wanted to invite you on. I wanted to make this as least offensive as possible, and just an open intellectual discussion.

Michael Eric Dyson: (20:27)
Right.

Anthony Scaramucci: (20:28)
I'm probably not going to pronounce his name right, so forgive me because I'm a Long Island Italian, and I could barely speak English as a result of that. But I believe his name is Ta-Nehisi Coates.

Michael Eric Dyson: (20:38)
Ta-Nehisi Coates, Ta-Nehisi Coates, Ta-Nehisi Coates, right.

Anthony Scaramucci: (20:41)
I've read several of his books. There was one quote, and I'm paraphrasing the quote, but it was a remarkable quote in terms of how honest it was in the denial category. What he said in one of his books is that in 1860, the largest market capitalization of property in the United States was black people. And it was three billion US dollars. So if you thought of all the capital equipment, the trains, the railroads, the buildings in the United States, it was eclipsed by the property value, again, forgive me for saying it that way, but I'm making his point.

Michael Eric Dyson: (21:24)
No, that's what it was, that's what it was, you're saying what it was.

Anthony Scaramucci: (21:26)
The property value of black people in the United States. So how on god's earth, professor, do we reconcile that? Now Italians will say to you, "Well, I wasn't there at the time, so you can't blame me." Okay, but yet we're all in the mosaic of the puzzle. We're all sitting in pieces of the puzzle, and we're living in the remnants and the aftermath of that. And you and I both know that the aftermath of that was mishandled very poorly. It took 100 years to get the vote. We spent the last 55 years basically taking the vote away. Just recently in 2020, people like Stacey Abrams are bringing the vote back. Tell me how we reconcile that, sir, that notion that, say his name Ta ...

Michael Eric Dyson: (22:21)
Ta-Nehisi Coates.

Anthony Scaramucci: (22:21)
Ta-Nehisi Coates brought up in his books.

Michael Eric Dyson: (22:25)
Yeah, and by the way, a lot of black people, because they see the H-I-S, they think, isn't that hee-see, not ha-see. So anyway, you ain't by yourself, sir. No, poetically phrased as you always do. Look. That reality that black people were property, and Coates talks about it as the plundering of the property, the plundering of black life. In his book on reparations, speaking about how the market capitalization of $3 billion and what black people counted, because they were three fifths human, counting in terms of the Constitution and the like. That when you have people as property, to see them as human beings is a hell of a leap for a lot of people.

Michael Eric Dyson: (23:05)
For a long time in this country, black people were seen as things. Look. Look at, what is it, 1857, Roger B. Taney, the chief justice of the Supreme Court, said that black people had no rights that white people were bound to respect. That's written into the law. That's not like some idea.

Anthony Scaramucci: (23:25)
It's interesting you're bringing that up, because I read your book, and I highlighted several theses of it, and I'm on page 103, where the chief justice who wrote the decision in the Dred Scott case, 1857, and this is a quote right out of your book. "It is too clear for dispute that the enslaved African race were not intended to be included and formed no part of the people who framed and adopted this declaration." That declaration he's citing is of course the Declaration of Independence. He then goes on to say that the Constitution, there were no rights in the Constitution for black folk.

Michael Eric Dyson: (24:05)
Right, exactly. That's a fundamental look. That principle, just think about it, that's not just somebody's opinion, that's not some random dude's opinion. That's the chief justice of the Supreme Court laying out the law, laying down the law of the land, that set legal precedence in this country until 1954, with Brown v. Board of Education, where separate but equal was done away with.

Michael Eric Dyson: (24:31)
Here's my point though. That when you look at the legal infrastructure-

Anthony Scaramucci: (24:36)
But you're running over that, sir, and I got to stop you for a second because I want it to sink in to people. 1857, you're three fifths human being, you have no rights. 1863, we're going to emancipate the slaves. We're doing that for political purposes more than we're really doing that for constitutional purposes. We both know that. As much as we both admire Abraham Lincoln, we understand a lot of the decisions that he made were fraught with political expediency.

Michael Eric Dyson: (25:05)
No doubt about it.

Anthony Scaramucci: (25:05)
And now you fast forward, it's 97 years from the case to, the Dred Scott case to Brown v. Board of Education. The president of the United States does not want that decision to come down the way it is, Dwight Eisenhower. We both know that.

Michael Eric Dyson: (25:29)
Absolutely.

Anthony Scaramucci: (25:30)
Okay, so we're here, and while this cauldron of activity is happening, every time that there's black advancement, the two of us can prove empirically, that there is, to quote Van Jones, a "whitelash" to black advancement.

Michael Eric Dyson: (25:45)
Absolutely.

Anthony Scaramucci: (25:45)
I'm interrupting you, but I really want to frame it for people.

Michael Eric Dyson: (25:47)
No, you laid it out, I'm glad you did, right.

Anthony Scaramucci: (25:49)
You got to frame it for people, because we are in denial about this stuff, and we've got to get out of denial so that we can do anything that we can to heal it. I guess that's my question sir. Is it healable?

Michael Eric Dyson: (26:02)
Yes it is. But thank you so much for interrupting me to make that point clearly. And let me say this before I answer your healable part. When people say, "Hey, I wasn't here." I get it. You weren't even here when you were born. You just, oh, somebody created me. We weren't here when the Constitution was written. But we take advantage of it. We weren't here-

Anthony Scaramucci: (26:20)
By the way, Darsie does a lot of creating, by the way. He's breeding like rabbits in his ... Let you know that, okay? Keep going, professor.

Michael Eric Dyson: (26:27)
He's upholding the Biblical injunction to populate the earth.

Anthony Scaramucci: (26:30)
It's literally unbelievable. [crosstalk 00:26:32] Go ahead.

Michael Eric Dyson: (26:33)
Good man. The thing is a lot of us weren't here when stuff was initially put forth, but when you come here as a potentially white person, if you weren't white when you got here you were white when you came here. James Baldwin, 1963, talks about race as a political fiction. It ain't in your genes. It's in how we as a society assign worth and value.

Michael Eric Dyson: (26:56)
The point simply is, that along with what you said, and the fact is that even if you weren't here when the stuff went down initially, you got in on the gravy train, or you took advantage of opportunities that you didn't even decide were yours but that were given to you. Is it healable? Yes. But not without conscious intent and the design to make sure that things are different.

Michael Eric Dyson: (27:20)
If we could have folk like you, Brother Darsie, out here trying to say, "Look, we might have differences of ideological and political position, but we're trying to come to grips with a wretched history of racial oppression, that if we could be honest about, and we could talk about invading our institutions, we have a better chance of overcoming many of the barriers that prevent us from recognizing our common humanity."

Michael Eric Dyson: (27:48)
Let me give you one that a lot of people overlook. Now, I happen to be a progressive, and in terms of black culture, I'm on the margins in terms of my politics. The majority of black people are pretty much in the center. The majority of black people are far more conservative than what I would be. And that if Republicans could find a way not to insult black people, and not to hold fast to institutional matrices of white supremacy, there would be a bunch more black people who would be Republican in this culture, in this society, than are presently on the roles. That's just a fact.

Anthony Scaramucci: (28:28)
But that's 100%, because if you're not ... It's the same reason why I have to now disavow the Republican Party, because the higher order principle for me is the preservation of our democracy and the Constitution. So if the Republicans would shut up, what they're doing is they're clinging to white power, they're going to become a group of aging white people that buy catheters and My Pillows from Fox News commercial interruptions. But if they would just shut up and open up the tent and make the party look like the more beautiful mosaic of the American people and acknowledge the history in America that's happened, as opposed to clinging to this nonsense and this abject ignorance, we would have a more competitive system. That party's in the process of splintering.

Anthony Scaramucci: (29:19)
John Darsie is, I can tell by his facial expressions and his facial tics, he's dying to ask some questions. I've got one question for you, and it's more of a reaction. And again this is on page 179 of your book, and I want to hold it up again. It's a fantastic read, Long Time Coming. Great read, very powerful writing. You're quoting Tracee Ellis Ross on this page. And the quote is, "Our freedom keeps being dismantled and limited because of white comfort."

Michael Eric Dyson: (29:55)
Mm-hmm (affirmative).

Anthony Scaramucci: (29:56)
I want you to react to that and tell us why you put that in the book, and what it means.

Michael Eric Dyson: (30:02)
Yeah. Yeah, that, and Tracee Ellis Ross, of course an incredible actress, also the daughter of Diana Ross. We remember Diana Ross, a major American figure, and then of course with the Supremes, and we say rest in peace to Mary Wilson, a friend of mine, and an incredible artist. Tracee Ellis Ross is saying that the preservation of white comfort, the comfort of not having to know about black culture, the comfort of not having to engage in a serious, introspective look at what America does, the rituals, the habits, the folk ways, all the stuff that makes us who we are. Without being uncomfortable, without being rendered uncomfortable, without being challenged in our ignorance or in our refusal to say, "Hey, let me learn something about some stuff that doesn't simply complement the nation, but begins to challenge my perspective," from people who are, say people of color, who've had a different experience.

Michael Eric Dyson: (31:05)
So the comfort of ignorance, the comfort of being disassociated from those traditions that I'm unfamiliar with and won't be challenged by, what she's saying, the maintenance and preservation of that comfort has led to a lot of hurt and pain, not only for black people in this country, but really for the country getting off of its basic pathway toward better democracy and more humane interactions between people. That's what she has in mind there, and that's why I put that there to try to talk about what we can do to overcome the obstacles, the impediments, and the barriers that prevent that kind of interaction from occurring.

Anthony Scaramucci: (31:47)
Okay, absolutely fantastic book, Michael, Professor Dyson. I'm going to turn it over to John for some questions that have built up in our email traffic, and from our audience.

Michael Eric Dyson: (31:59)
All right, beautiful.

John Darsie: (32:00)
Yeah, yeah. It's actually in my contract, Dr. Dyson, that I get at least one third of the air time, or else I can sue for an HR violation. So thank you Anthony for giving me my-

Anthony Scaramucci: (32:11)
But by the way, professor, you'll appreciate this. The head of HR at SkyBridge, that would be me. I just want to let everybody know that, okay, so there are some unanswered anonymous complaints in that complaint box.

John Darsie: (32:24)
That's why it's so dysfunctional, Dr. Dyson.

Anthony Scaramucci: (32:26)
All right, it's dysfunction, but it's my denial, okay? It's my denial about the dysfunction. Go ahead Darsie, go ahead.

John Darsie: (32:33)
Yeah. I want to talk a little bit about symbolism. I grew up in Durham, North Carolina, as I mentioned earlier. We actually just removed the ability for someone at the DMV to get the Confederate flag put on their license plate, which was shocking to me that that was still even a thing. In Mississippi they just replaced their state flag that had a Confederate flag taking up part of the flag, which was again not spending a lot of time in Mississippi shocking to me that their state flag still had the Confederate flag in it. In 2015, it took a domestic terrorist massacre at the Mother Emanuel AME Church in Charleston, Clem Pinckney, who you write about in the book, for the Confederate flag to come off of the statehouse in South Carolina.

John Darsie: (33:18)
We've also had this battle being waged about statues that were basically placed across the country at various points throughout history to intimidate black people from thinking that they can become equal parts of society in certain parts of the country.

John Darsie: (33:32)
Other people on the other side of the ledger come out and say, "We shouldn't try to erase history or sanitize history by taking down these monuments or removing these flags, we should embrace our history and move forward." But why, just to communicate to people, in your view is it important that we start to remove some of these symbols and some of these artifacts of intimidation that existed as part of our stained history?

Michael Eric Dyson: (33:57)
Well, I can see why the eloquent Brother Scaramucci has the equally eloquent Brother Darsie, because you just laid it out there, even in your question. There is an intimidating factor. Look, I rarely pass by these statues where I see people standing around, "Let me tell you about history, young people, and let me tell you about the conflagration and consternation of American division that led ..." They ain't doing that. Those statues that dot the landscape of American society are the translated into concrete principles upon which this society rests. So who you honor is who you tell yourself you are.

Michael Eric Dyson: (34:43)
By having these statues out there, they're not ... Look, take them to a museum. Take them to someplace where people can actually talk about what Johnny Rebel was about, to talk about what Robert E. Lee was about. I think we should do that. I don't think we should erase it. I don't think we should evaporate it. I don't think we should destroy it. But we should put it in its proper context. And when you have it on public land, that means all of America is supporting this idea.

Michael Eric Dyson: (35:10)
The South may have lost the war, but they darn sure won the battle of interpretation. The ingenuity of the South was that they understood it was an interpretive warfare, and boy, they put their stakes into interpreting what they lost.

Michael Eric Dyson: (35:26)
For me, why it's important, and look, speaking of Durham, I spoke at Duke University in the chapel a couple of years ago, and when walking in, they were just about to remove the Robert E. Lee bust into the Duke chapel. I'm going like I didn't realize he wrote the Bible. Oh my god, I didn't realize this dude was involved in the papyrus upon which was inscribed Paulinian letters. Come on. Why do we have Robert E. Lee going up into the chapel? Why? Because they were being honest about the fact that this variety of whiteness was more important than, or at least as equally powerful as, their Christian identity.

Michael Eric Dyson: (36:11)
Often when you had white evangelical, white was more powerful than evangelical. So the reason to remove these statues is not to deny history, because we just spent a lot of time talking about the importance of engaging it, but to put it in its proper perspective, and let's be honest. A lot of these statues weren't erected back in the day. They were erected after the Civil Rights movement began to challenge white supremacy in the South, and this stuff is built in the '50s and '60s, and in some cases the early '70s. So when we do the real history about when this stuff came about, it was a conscious attempt to intimidate those people who were black in this culture, who were challenging the dominant perspective.

Michael Eric Dyson: (36:56)
Let me end by saying this. Look, I can deal with the fact, a lot of white people who are Confederate supporters say, "Look, this is about heritage, not hate." What about if your heritage is hate? What about if some of your heritage is some stuff you don't like, that you don't want to deal with? And it's not that we're trying to demonize human beings. I understand people who say, "My grandfathers and grandmothers, my great great grand people were involved in this war, they felt that it was about states' rights and not about enslavement." And then you go, "States' rights to do what? Oh. To own slaves, oh, okay." So we're getting back to the same point there, but let's study the history.

Michael Eric Dyson: (37:36)
So I'm down for studying history, I'm down for having history lessons. But let's not pretend that the things that grow out of the sacred space of American civic culture are not embodiments of the noble ideals that we nurture, and as a result of that, we have to take them seriously. Those flags, like you said, darn. Mississippi, what's going on in Durham, and I lived in Durham for like three years. The reality is, you got to not allow that to be perpetuated in the state symbols of a particular area where some people who are citizens are going to be intimidated by that stuff. Let's just be honest.

John Darsie: (38:11)
Right. Yeah, and sticking in North Carolina, we have our military bases are named after Confederate generals, which I wasn't fully aware of until this explosion of increased awareness about racial issues. I mean, take the racial side out of it, these are people that supported the perpetuation of slavery. But in the end they're losers. They lost a war, and somehow we've named our military bases after these men. It's shocking to me. And I'm happy that at least something's being done about it now.

Michael Eric Dyson: (38:39)
And let me add something very briefly. Not only losers, but here's the point. They were secessionists. They weren't even part of your nation.

John Darsie: (38:47)
They were completely un-American.

Michael Eric Dyson: (38:48)
I mean, dude. When you're taking-

John Darsie: (38:50)
When you put on that uniform, you're fighting for the country, and these people fought against the country.

Michael Eric Dyson: (38:53)
Come on, man. And when you take the Confederate flag through the Capitol, do you literally realize what you're doing there? You're celebrating the people who separated from the nation who said, "Nope, I'm going to fight against it," and now you're celebrating them as prototypical expressions of Americana. Come on. It's just ...

John Darsie: (39:11)
Yeah, the type of hypocrisy that you get during the insurrection in Washington where you had people holding up a Blue Lives Matter, Back The Blue poster, while at the same time stomping out members of the DC Capitol Police.

Michael Eric Dyson: (39:24)
Absolutely.

John Darsie: (39:25)
Because they didn't agree with the type of laws that they were breaking. They thought they should be entitled to break the law.

Michael Eric Dyson: (39:31)
Great point.

John Darsie: (39:33)
It's amazing the hypocrisy that exists.

Michael Eric Dyson: (39:34)
No no, that's absolutely right. Blue Lives Matter until my interpretation [crosstalk 00:39:39]

John Darsie: (39:39)
The blue lives come for you.

Michael Eric Dyson: (39:40)
Right, exactly.

John Darsie: (39:41)
Yeah, I want to talk about the cycle of poverty and this cycle of systemic racism that exists, and I want to start with police brutality. That's a big focus of your book, but it's only one element I think of systemic racism. And again, going back to my North Carolina roots, Vince Carter, who played basketball at the University of North Carolina, had a legendary NBA career. He said when his kids were young, he sat them down, and like a white parent, or any parent would have a conversation with their kids about the birds and the bees, he had a conversation with them about what it's like to be black and dealing with law enforcement. When you go out to your driveway to get your mail, don't look or act a certain way. When you get pulled over, don't look or act a certain way, keep your hands down.

John Darsie: (40:24)
What do we have to do within our policing system to just change the way things are done? Defunding the police is obviously a misunderstood buzzword that President Obama weighed in and thought we should characterize it in a different way. But how do we root that racism out of our police force to prevent black people from having to fear the people that are supposed to be protecting them?

Michael Eric Dyson: (40:49)
Yeah, it's a great point. And so true, that it's a small part of what we mean by systemic racism, but here's the problem. If you're not alive and not well, you don't have to worry about a system because you're dead. And so many of us fear death at the hands of the police. So that's the entry level form of brutal, institutional oppression we got to deal with because if you ain't here, you ain't got to worry about much else. And so many people of color, especially black people, again, the irony is, nobody calls the police more than black people. Stop. You go on some of these ride-alongs I've been on, like bruh, every other call. "Mama, you didn't cook them ... I'm calling the police on you." I'm being facetious, but you know what I'm saying.

Michael Eric Dyson: (41:38)
The black people just want the police when they show up to distinguish me as the citizen who called the police and the crime that I want to report, or the issue I want to highlight. And so often, America and its institutional expression of law enforcement have done a poor job of trying to respect the integrity and identity of black people and their humanity. And look, a large part of this is to look how you talk to people. Like wait a minute, do you work for the American public? Do you work for taxpayers? Then you're coming to me as if I'm a scourge to American society, and I'm telling you from my personal experience, I ain't talking about what somebody told me. This is not an anthropological investigation. I'm telling you what I've had personal encounters with the police. The condescension, the nastiness, the refusal to look me in the eye as a human being. Having had several guns pulled on my by the cops for, quote, "Stealing" my own car. And when I went into my wallet to show them my license and registration, called me the N word and said, "I will put a bullet in your head."

Michael Eric Dyson: (42:48)
I'm telling you, this is what I've experienced personally. So it is sad that we still have unconscious racism, unconscious bias, and a conscious disavowal of the humanity of the people we're dealing with. So I think part of what we got to do, and you're right, what people meant by defunding the police, they ain't trying to get rid of the police, they're trying to say police are not the only people who are concerned with public safety. There are other departments that are concerned with public safety. Can we fund some of those so that when people are having a psychotic break, we don't need Officer McGillicuddy over here coming in on the scene, beating somebody down. We need somebody with some mental health awareness to say, "This person is overreacting, but we got it under control."

Michael Eric Dyson: (43:37)
On the other hand, I was at a, maybe about five years ago, I was doing some anthropological research at 4:30 in the morning in clubs to determine the bacchanalia and the impulse toward partying of young people. Let me clean it up that way. So I'm out at 4:30 at Ben's Chili Bowl, and a white kid is giving the cops the what for. "You mother ... You son of a ..." I mean, cussing them out like you wouldn't believe. And I said to myself, oh my god. They're going to shoot this kid. And then I went, but no they're not, he's a young white kid.

Michael Eric Dyson: (44:09)
You know what I literally saw happen? And it should happen to everybody. The cop says, "Son, you're clearly inebriated." He called ... This is before all of the big time Ubers and stuff. He called a cab for the kid, put him in the cab, and sent him home. Thank god. I'm not mad at that.

John Darsie: (44:29)
Yeah, I mean it goes back to the insurrection. People say it, and there's a lot of whataboutism, but it's like what if those people that were invading the Capitol on the 6th were Muslim, what if they were black? That would have been a very different picture.

Michael Eric Dyson: (44:43)
Brother Darsie, that's exactly what I'm .... I looked at that and I said man, can we get some of that? So we don't hate law enforcement. In fact my friend is the chief of police in Durham right now. A black woman who is the chief of police there, who is now head of NOBLE, National Organization of Blacks In Law Enforcement. And Chief Davis, an extraordinary woman. So it is not that we are against law enforcement, we are against the mistreatment that brutally happens to us.

Michael Eric Dyson: (45:16)
I'll tell you, I'll end by saying this. We are afraid. What did Lebron James say? Lebron James is almost going to be a billionaire, almost as rich as Scaramucci. He is about to become a billionaire, and this guy says [crosstalk 00:45:28]

Anthony Scaramucci: (45:28)
I'm a billionaire in Zimbabwe, professor, okay. That's the only place that I'm a billionaire. But keep going.

Michael Eric Dyson: (45:35)
You're the man. You the man. So look.

Anthony Scaramucci: (45:35)
Keep going.

Michael Eric Dyson: (45:36)
Lebron is saying we are terrified. We are afraid for our lives when we come into contact with police because we don't know what's going to happen that day. We don't know if it's going to be Officer Friendly, or we don't know if, because of a left turn signal, like Walter Scott down in South Carolina, and then I think that, oh my god, I owe some money on my child support, and I run away, and you fill my back with seven pieces of lead.

Michael Eric Dyson: (45:59)
The point is that what we've got to do is not only have training and not only have racial awareness, we need all that stuff, but we got to have a change of law. The stand your ground laws that end up benefiting many white brothers and sisters, and the reason I say that, when black people do stand your ground laws, oh, they're not given the benefit of the doubt. They are thrown into jail. There have been some black people who have shot white people on their property or coming up to them. Mostly all of them have been arrested. Whereas white brothers and sisters, it might take two or three months, and a lot of outrage from the community in order for that to occur.

Michael Eric Dyson: (46:35)
Again, as you said, it's an index of the larger institutional inequality that prevails, but it's an important one, and until we grapple with that ... What did Obama, at least under Obama, the Justice Department had these consent decrees that tried to hold police departments to account. We know that Donald Trump got rid of all of them, and Bill Barr and all the other attorneys general before him, Jeff Sessions, did away with them immediately. If we had some of those interventions, we could at least begin to rethink what policing means in America today.

John Darsie: (47:10)
Right. Dr. Dyson, thanks so much for joining us. Anthony, I want to leave you the final word before we let Dr. Dyson go.

Anthony Scaramucci: (47:16)
well I want to hold up the book again. I think the book was phenomenal. Long Time Coming. And you've written many phenomenal books, but this really captured what is going on in this society right now. And let's do our best, doctor. I would love to have you at our SALT conferences live, and let's do our best to do everything we can to advance this discussion and open it up, end the denialism, and see if we can promote some more healing and a interactive, more peaceful society. So with all that, I thank you for your contributions, sir.

Michael Eric Dyson: (47:51)
Thank you my friends, thank y'all for having me. Lovely and wonderful conversation.

John Darsie: (47:54)
And people often ask us, "Where do we start in terms of educating ourselves?" If you picked up every book that Dr. Dyson has written, including A Long Time Coming, pick up every book that Ta-Nehisi Coates has written, and the two books by Isabel Wilkerson, most recently of which is Caste, which I think Anthony might have on his bookshelf back there, that's a great place to start to understand the systemic racism.

John Darsie: (48:18)
And thank you everybody for joining today's SALT Talk with Dr. Michael Eric Dyson. Just a reminder, if you missed any part of this talk or any of our previous SALT Talks, you can access our entire archive of SALT Talk episodes, as well as sign up for all future SALT Talks, at salt.org/talks. Please also follow us on social media. We're on Twitter, which is where we're most active. But we're also on Instagram, LinkedIn, and Facebook as well. And please subscribe to our YouTube channel. We post all of our content for free on YouTube, @salttube is the name of our YouTube channel. So please subscribe to us there as well. And please spread the word about SALT Talks. This pandemic obviously has been a disheartening time for our country, but it's also given us an opportunity at SALT to pivot and to grow our audience by tapping into the digital media side of our operation that we have here in addition to our conferences. So please spread the word.

John Darsie: (49:10)
This is John Darsie, on behalf of the entire SALT team, signing off for today with Dr. Michael Eric Dyson. We hope to see you back here soon on SALT Talks.

Dr. Akilah Cadet: How to Promote Racial Equity in the Workplace | SALT Talks #154

Dr. Akilah Cadet is the Founder and CEO of Change Cadet. Change Cadet provides people and companies with services that support anti-racism, diversity, inclusion, equity, and belonging (DEIB).

As a young Black woman, Dr. Akilah Cadet experienced judgment, "isms", and numerous barriers in the workplace. One day she thought, “what if I could change that?” and Change Cadet was started. Cadet, her last name, is a French term that means soldier. Change Cadet prepares individuals and companies to be soldiers of change in the workforce so there can be more women and people of color at the top. She wants everyone to feel empowered in their career. She advises tech startups from concept to staffing, facilitates strategic workshops, coaches leaders, and speaks at various engagements.

LISTEN AND SUBSCRIBE

SPEAKER

Dr. Akilah Cadet.jpeg

Dr. Akilah Cadet

Founder & Chief Executive Officer

Change Cadet

MODERATOR

Anthony Scaramucci

Founder & Managing Partner

SkyBridge

EPISODE TRANSCRIPT

John Darsie: (00:07)
Hello everyone, and welcome back to SALT Talks. My name is John Darsie. I'm the managing director of SALT, which is a global thought leadership forum and networking platform at the intersection of finance, technology and public policy. SALT Talks are a digital interview series with leading investors, creators, and thinkers, and our goal on these SALT Talks is the same as our goals at our SALT conferences, which is to provide a window into the mind of subject matter experts, as well as provide a platform for what we think are big ideas that are shaping the future. And we're very excited today to welcome Dr. Akilah Cadet today to SALT Talks. Dr. Cadet is the founder and CEO of Change Cadet, a consulting firm which offers a broad array of anti-racism and diversity services, including strategic planning, crisis rebuilding, advising, executive coaching and facilitation, all services that we're very much in need of. We've always been in need of them, but I think at least a light is being shined on some of these issues even more so over the last couple of years.

John Darsie: (01:11)
Cadet, which obviously is Dr. Cadet's last name, is a French term that means soldier. As it's often an uphill battle for women and underrepresented communities to achieve success and equity in the workplace, Change Cadet prepares of soldiers of change to overcome these continuous battles so that individuals and companies can thrive, because as we have dug into the research on this, having diverse teams drives better outcomes for companies. Dr. Cadet has 15+ years of experience working in various organizations with both private and public sector companies. She literally has every degree in the book. She lives in Oakland, California. She has a rare heart condition, which she is open about. And she's a proud Beyonce advocate, but Dr. Cadet, let's be honest, aren't we all proud Beyonce advocates?

Dr. Akilah Cadet: (02:00)
Very true.

John Darsie: (02:01)
Hosting today's talk is Sarah Kunst, managing director of Cleo Capital, a venture capital firm that she founded. She's going to host today's interview, and I'm going to pipe in when I have questions, so looking forward to an open conversation between the three of us. And with no further ado, I'm going to turn it over to Sarah to begin the interview.

Sarah Kunst: (02:20)
Hi. Thanks guys, super excited to be back on SALT Talks. So Dr. Cadet and I actually met in a similar format to this. We got to share a stage at a panel pre-COVID, and in the years since, we've become friends and co-conspirators, and so super, super excited to have her here today. So Dr. Cadet, why don't you start by telling us your story?

Dr. Akilah Cadet: (02:47)
Of course. Thank you, John, thank you, Sarah, for having me. My story is unfortunately common for most black women, and that is this fun, fun time that I have with discrimination in the workplace, being bullied, being harassed, being too smart, not smart enough, somehow not black enough. All these different isms and barriers were coming up. And the final straw for me was being in a position where I really did feel like the Olivia Pope of diversity in the workplace where my boss, white male in his 60s, looked at me in a one-on-one meeting and said, "I didn't think you were that smart when I interviewed you, but you are smart." And I was like, wait, this is a doctoral level preferred position. My doctoral title is in leadership and organizational behavior. I was in that department. The person, my predecessor had one as well, and so it was just an very interesting thing to say.

Dr. Akilah Cadet: (03:43)
And so I asked him why he said that. And he said, "Oh, I guess that's offensive. I'm sorry." I validated that it was, and then I would have to rebuild my relationship and rebuild trust with him. He decided to fire me the next week. And so in that moment, because I had experienced those isms, wanting to fit into someone else's box previously, and throughout my career, and upon reflection, I was like, "What can I do to fix that?" So, Change Cadet was actually a side hustle, and it was an outlet, a way to pour back into myself for not feeling valued in the workplace, and I decided to take a chance on myself and start this business. And six years later, this is what I do.

Sarah Kunst: (04:22)
Awesome. That is great. So, give us an understanding of some stats, or facts, or not-so-fun figures of what does this problem look like, what does... We hear diversity, we need more diversity or companies aren't inclusive, there's only... Even I was shocked when I found that the newly appointed CEO at Walgreens was the first black female CEO ever of a fortune 500 company. I assumed that somewhere around 480 on that there'd probably be some industrial company I'd never heard of that had a black female CEO once. So, give us some kind of structure around where are we at?

Dr. Akilah Cadet: (05:13)
So, that's a big question, I'll just tell you that. To be as succinct as possible, we're in a position where people are dealing with the ramifications of the murder of George Floyd, right? Because we saw a huge shift. He was murdered on May 25th, and then in June, it's like, Ooh, performative allyship, the black square. We need to hire a diversity consulting firm. We need to do something. Wait, are we racist? So all of these questions were coming about. We don't want to be part of that. We want to celebrate our diversity. We want to add and have more diversity. And so with that shift, people are now in a position where they realize that there's opportunities for growth, continuous learning and unlearning. The black community spends $1.3 trillion in consumption, just buying something, loading something up, whatever it is, they are getting something, and they realized that not only there's a lot of power in the black dollar, but there's also a lot of power in the allyship dollar.

Dr. Akilah Cadet: (06:12)
So, it's a non-black person or a white person who's like, "Hey, business that I partner with, what are you doing for diversity?" "Hey, company that I've been buying stuff for a really long time, what's your diversity strategy?" #PullUpOrShutup was a big campaign that's still going on where we're looking at companies who are saying, "You know what? We actually have to do better. So, we're going to be transparent about our executive leadership." What you're saying, Sarah, with the new first black woman CEO for a fortune 500 company, and wanting to be transparent. So, we're seeing a shift where companies want to hold themselves accountable to show up in the best ways. Now, as a result of that, we're seeing a lot of growing pains from companies who are figuring out what does that mean for them. In addition, there is this pressure that happens externally and internally that makes it really hard for leaders to decide where to go, and that's where there can be pause or conflict.

Sarah Kunst: (07:11)
That's super helpful. Thank you. So, I would love... I had this as a question, you've sort of answered it, but we'd love to dive a little bit deeper. How has your work... You've been doing this for six years. It's now been nine months since the murder of George Floyd and the following protests, how have things changed since then? How much did people care in 2019, which was only two years ago, January or February, 2019, versus January, February, 2021?

Dr. Akilah Cadet: (07:42)
Yeah, that's a great question. It's changed because I can say white supremacy. Before, that wasn't something I could say. People want to learn more about what white supremacy means, realizing it doesn't mean, again, that it doesn't mean KKK or white supremacist, Proud Boys, it means that, wait, I'm benefiting from something that's ingrained in my society, my daily life, the country, the workplace. I'm realizing I may be adding to systemic oppression of other people who may not have the same privilege as me, and so I can be much more transparent about that. So pre-murder of George Floyd, or the Floyd effect as my father likes to call it, it was like, "Let's talk about diversity, let's talk about equity, let's talk about inclusion," but now we're having more conversations around belonging and anti-racism, how can companies be anti-racist, and that's the big shift.

Dr. Akilah Cadet: (08:34)
You also get to see how some of your favorite brands and companies feel much more comfortable being transparent too. I love, love, love ice cream, but I really love Ben & Jerry's. So Ben & Jerry's is role modeling behavior, two white guys talking about white supremacy, holding people accountable, using their platform to educate, still selling ice cream, partnering with Know Your Rights Camp and Colin Kaepernick, and showing how it can be done. So, I can have much more transparent conversations. I can meet people where they are at, and help them get to a destination that would have been much more complicated before the murder of George Floyd.

Sarah Kunst: (09:11)
Yeah. Yeah. I definitely agree with that. So, where does change start?

Dr. Akilah Cadet: (09:17)
It starts within. As cheesy as it sounds, it's very true, right? Because if you think about it, the people who have the most power in any company, for-profit, non-profit, whatever it is, are leaders, and leaders have the most influential change. So if leaders are not holding themselves accountable, then nothing will happen. And it's not just for diversity all the way through to anti-racism, it's the same for any type of organizational change that's out there. And so what we encourage our leaders to do for the clients that we work with, is for them to act accordingly, to show up and act, meaning accountability, communication, and transparency. So, a common thing that happens with leaders, and the change that has to start within, is that leaders want to be the best at things. We have ego that's around, we are experts at things, we don't want to necessarily admit when we're wrong.

Dr. Akilah Cadet: (10:15)
But if you think about accountability, communication, and transparency, being vulnerable and saying, "You know what? I'm not an expert in diversity, so let me partner with my people and culture person," or maybe a head of diversity, if they have that individual. "Let me bring in a consulting firm to work on that. Let me role model that I'm also figuring stuff out too." And that is the true power. And so if individuals don't address their own experiences, their lived experiences, their internalized, externalized experiences that develop their bias, their stereotypes, and that's where discrimination lives, then none of the change will happen with diversity.

Sarah Kunst: (10:54)
Yeah. No, I couldn't agree more. So, tell us a little bit about how do you work with a company? What does it mean to work with Change Cadet or another similar organization? What does that mean?

Dr. Akilah Cadet: (11:10)
It means you're going to have a lot of fun, you're going to be pushed, and you're going to be held accountable for what you want to do. So, a lot of our engagements fall in four buckets. So one is strategic planning. And so in strategic planning, we may be helping them from zero to figure out their diversity strategy, or a pivot, because we're still pivoting in 2021, that has not stopped. So, we'll do that. That will sometimes include a needs assessment. What data do you have? And data looks like exit interviews, surveys, any stats that we can garnish. Looking at policies, practices, procedures, to develop a roadmap for them, or help them develop a roadmap. We also provide executive coaching. So again, going inward. We work exclusively with people who have influence, because they have the most change, right? Me, broken record.

Dr. Akilah Cadet: (11:59)
So we work with them either individually or in groups. Group coaching is incredibly effective, because going back to ego and transparency and role modeling, leaders can learn from each other. We also provide workshops. So workshops around power, and privilege, how to be an accomplice in the workplace, and the list goes on and on. Also act, we have a workshop on act, allyship journeys, so that people can learn what to do. We only do workshops because workshops focus on individual behavior. We do not do trainings.

Dr. Akilah Cadet: (12:30)
In fact, training sets people up for success because it's like, "Okay, you're going to do this training for two hours, four hours, two days," whatever it is, and then you go back into your virtual or actual workspace, and then the culture isn't set up for what you learned in training. So, that's why we focus on individual behavior. And then the fourth thing we do that John shared, is we do crisis management and crisis recovery. So something goes down, and we come in, and we help them move past that, holds themselves accountable, problem-solve and correct behavior, that's really when I get to be the Olivia Pope, and it's very fun. And even though I can't go outside and have fashionable jackets and bags, I do from the top up.

Sarah Kunst: (13:10)
Yeah. And you can have popcorn and wine, and sometimes that's enough.

Dr. Akilah Cadet: (13:15)
Oh yeah, definitely that's how I decompress. But honestly, we're different from a lot of diversity consulting firms, because one, I do use a lot of humor, and I do meet people where they are. We are not prescriptive. We aren't saying, "Hey, you have to do A, B, C to get to your outcome." That doesn't make any sense, because of so many different variables in the workplace. So, we have a reciprocal relationship that allows us to be experts and tell them things, but they're the experts of their culture, and we've learned from each other.

Sarah Kunst: (13:49)
I love it. So, when should companies bring in a DEI expert?

Dr. Akilah Cadet: (13:57)
Well, I mean, there's multiple points of entry for us unfortunately. A lot of it is in crisis management, and we had a lot of that after the murder of George Floyd, because the attempt was, "I'm going to make a statement," internally, externally or both, and it didn't work out for them. So crisis management, helping them get on the right path. But the best time to bring in a diversity consultant is when you're thinking and ready for... You don't have to be 100% there, but ready for organizational change. It's all it is, is organizational change, are people open to that, so that you can start to think about your company future state. We aren't in the business of firing all the white leaders in executive roles, because people still have a business to run. I run a business, I totally understand that money is important, but we're in the business of that long-term game.

Dr. Akilah Cadet: (14:45)
So, if they're ready for change, ready to be patient with themselves, and ready to hold people accountable, that's the best time to bring in a consultant. Otherwise they're putting people in a stop-start situation that either results in initiative fatigue, change fatigue, and for BIPOC, black indigenous people of color, it puts them in a position where they're like, 'Oh..." "Oh no, it's not going to happen." "Oh..." "Oh no, it's not going to happen." And that's hard to take, especially if some of those individuals, particularly black people from last year continuing to this year, are already carrying additional work, maybe tokenized doing the work, it's a real let-down.

Sarah Kunst: (15:23)
Yeah. Yeah. I agree. So does wanting to improve DEI in your organization mean that your organization is just a terrible bad racist place, and that if you show up, it means that they're horrible and basically beyond repair, or can you start before that?

Dr. Akilah Cadet: (15:41)
You definitely start before that. People who feel like bringing in a consultant means that the company or the org is racist, that's not true, that means leadership was not ready to bring someone in. Again, the best time to bring someone in is like, we want to make sure that we are creating a place of belonging where everyone feels valued and appreciated for who they are, from the period of application, all the way through past their 30-60-90, and being... That is the exact goal. If people are saying, "We don't want our clients or customers or consumers or employees or team members to think that we're racist," they're actually centering themselves.

Dr. Akilah Cadet: (16:22)
And because we know the majority of leaders are white leaders, we call that white centering. So it's like, oh, I'm uncomfortable. I don't want people to think that I don't know something, so I'm going to make it about myself, so I can go back to what I know. And that's not the goal. The goal is for that white person to feel valued and appreciated, and that Latinx or Hispanic person, or black person, or disabled person, someone from the LGBTQ+ community, to also feel this same way. It's not taking from other people, it's having that equality across the board.

Sarah Kunst: (16:58)
I love it. So, people should be working with orgs like yours early and often, and making this a real big commitment, financial and otherwise, but if somebody is watching this and they're like, "That's awesome, but I'm not the person in charge, I can't..." Or, "Budgets at my company are such that we can't bring anybody in. We can barely pay ourselves." What are some of the things that people can do immediately or freely, and where, hey, I have to wait to next year's board meeting or budgets, aren't a problem.

Dr. Akilah Cadet: (17:32)
So, there's lots of things that people can do. And I just want to point out that the goal is to get to the point of institutionalizing diversity, equity, inclusion, and belonging, anti-racism in day-to-day. And that can be done with big things, and it also can be done with little things. So some of those little things, or the free 99 things I like to say, are one, setting of a resource library. Someone, anyone can open up a file... Hear me out, a file, box, drive, whatever it is, and people can share podcasts, articles, books, links, whatever, in this resource guide, so people can discuss it. Also for free 99, virtual lunch and learns, or in-person lunch and learns, people can talk about those very resources. Like, "Hey, this month, if everyone listens to this podcast at this lunch and learn, let's have a discussion about it. I don't know what's coming up for me. You don't know what's coming up for you, but let's set some ground rules so it's a safe space, and let's talk about it."

Dr. Akilah Cadet: (18:31)
Because it's having that opportunity to ingrain in daily practice in life, to celebrate that feeling and experience of learning and unlearning. Another thing that can be done that is pretty cost-effective, is that I have the Ally Nudge. And the Ally Nudge is text messages two to three times a week. Each day, you get a morning prompt that's educational, something, it's either a video of me doing this or a link to a podcast, or whatever it is, and then the evening you get an action prompt text directly correlated to what you're learning about in the morning. So we have police brutality, stuff around kids, definitions of anti-racism. And it's $5 per person, so people can sign up for that, it's very cost-effective to bring people in.

Dr. Akilah Cadet: (19:20)
People also will do lunch and learn activities around that, book club activities around that. And then one thing that's also free and great is icebreaker. So icebreaker, there's modules that are already there, and people can go through training content and have conversations with each other, with video, without video, and discuss what's coming up from prompts that I set up. So if anyone's done a game and house party, or any type of card question game, it's done in a virtual capacity that can be done for a team or a whole department. There is an insane amount of free content that's out there that people can use to create, you just have to identify the point person or persons to do that. And last, people can create a culture committee or diversity committee, whatever they want to call it, and share that responsibility of educating the team.

Sarah Kunst: (20:10)
I love it. So talk a little bit about, we were talking about this the other day, there's definitely a feeling, I think, that for a lot of underrepresented minorities that were over-mentored and under-sponsored, so talk a little bit about the difference between those two things, and how people can be better sponsors, not just mentors?

Dr. Akilah Cadet: (20:33)
Yeah. I mean, what we're talking about is a difference of action, and having actions and words match. If you're in some form of leadership, or you're established in one way or another, you've come to a point where you're mentoring other people. And mentoring is great. I love mentoring, it's fantastic. But when we think about sponsorship, it's taking it to the next level of action, meaning who can I actually connect this person to, what resources can I put into them, whether it's money or the network, so that they can build whatever they're building, or amplify in a way they need to be amplified. It's adding accountability to the mentorship part. It's so easy for us to be like, "Oh my God, let's [inaudible 00:21:12] a couple of times a year. It'd be great," to really being an accountability partner sponsorship of that person who needs to get somewhere.

Dr. Akilah Cadet: (21:20)
This is incredibly important for people who don't have access to the network, are low-income, didn't go to a certain college. I went to all state schools, and look at me, it worked out. I don't come from clubs, I be anything. And supporting those individuals and doing what those types of colleges do to set individuals up for success. And I think the last thing that a lot of leaders will struggle with, is when you're in a position of sponsorship, it allows you to not only change someone's trajectory, particularly for BIPOC people, low-income people, people who don't have that certain amount of status, but it reminds you the importance of the privilege that you have, and the power that comes along with it. We all have privilege regardless of how we identify, but if you're using that privilege for good and ways to literally transform someone else's life, that's a wonderful way of free diversity, equity, inclusion, and belonging in a one-on-one basis.

Sarah Kunst: (22:25)
Yeah. I love that. So tell us about your shirt. Tell us about Do The Work?

Dr. Akilah Cadet: (22:33)
So Do The Work, you are all getting a sneak peek, these aren't even released yet, but they'll be coming out soon. I have Do The Work shirts, and now crew necks that will come out. And so I used to be a preschool teacher. That's probably why I am the way I am now. But there's lots of ways in which people learn. And so when you have a message on a shirt, it either creates conversation, it's a reminder, or it's a point of celebration. And so when you have that on, you're like, "You know what? I'm doing the work. I remind people to do the work. People are telling other people to do the work." And it's just a way to get that message out there. Do The Work isn't my thing, but it's a thing that needs to happen for all of us, not just for white people, not just for black people, everyone have to continuously do the work, to learn and unlearn, grow, and hold each other accountable.

Dr. Akilah Cadet: (23:23)
I also have Keep Being Amazing, which is my mantra, which I need, because this work is incredibly heavy and hard to do. I'm a black woman. I'm traumatized on the regular, just talking to clients, and so I remind myself to keep being amazing. It's also on my phone case, just to keep being amazing. And it's the same thing if people see that message, because it is hard, particularly for people who are new to this. If it's hard, they can remind themselves to keep being amazing. If black people can find ways to celebrate themselves, and through all the adversity that we have in America, keep being amazing, it's a powerful thing.

Sarah Kunst: (23:59)
I love it. Awesome. John, what questions do you have?

John Darsie: (24:03)
I have a lot of questions, but one of the things that's been great for me, I grew up in a city, Durham, North Carolina, that is very diverse. And it's actually ironic that in a state that I would say is a little more of a red state, you could say, North Carolina, I actually grew up in an environment where there was more mixing of races, and I was exposed, I had friends of all races, colors, and creeds. But then you go to places, I live in New York now in Long Island, where there's this homogeneity that exists. And it's not necessarily a conscious decision that people make like, "I don't want to be around Hispanic people, or I don't want to be around black people," but people just settle into a comfort zone, and they don't necessarily have any motivation to get out of it, and they're not conscious of the subtle racism that exists in everyday life when they walk into a store and somebody looks at them, or when they're walking across the street and somebody moves out of the way because they don't want to be near them.

John Darsie: (25:00)
And I think the conversation that was started by some of these tragic events that have happened over the last couple of years, in a way, people in the black community in particular, stepped up to the plate and said, "We're no longer going to accept the status quo." I think it's been amazing to see. But in terms of the hiring processes that companies go through, I've always found it interesting. And there's been a lot written and spoken about in terms of colorblind hiring practices, and truly eliminating unconscious biases that exist. You talked about your former boss, Dr. Cadet, who made a statement, an older guy, I'm going to be nice to him and say he's old-fashioned, but people have just these unconscious biases that exist. Some people say them out loud, and some people don't.

John Darsie: (25:42)
But when you're going through a hiring process, let's say you don't take the step to have an affirmative action style of hiring process where you're going out and saying, okay, we're an organization that's 80% white, let's hire 10 black people to balance that out so that our board doesn't get mad at us. How do you truly take it to a colorblind hiring process and ask questions and interact with people in a way that you're eliminating these preconceived notions that you might have in your head?

Dr. Akilah Cadet: (26:10)
Yeah, absolutely. Well, first I want to say, I miss New York. This is the longest I've gone without being there. I'm Haitian, so half my family is there. I heard it's doing well. And the homogenous-

John Darsie: (26:26)
[inaudible 00:26:26] We've had a tough time in COVID, but hopefully it bounces back. And I love this city, despite being a little bit of a country boy, but I want to see the city bounce back obviously.

Dr. Akilah Cadet: (26:35)
You made the big switch. I left Sacramento, California to be in the bay, and let me tell you, I was like, "Wow, this is a real downtown." It was a shift that was there. So it's not about affirmative action, it's not about being colorblind, because when people are doing colorblind hiring practices, that's the same as saying, "I don't see color." And when people say, "I don't see color," I always ask them, "What do you do at a stoplight? Is it just all red lights for you?"

John Darsie: (27:05)
It sounds like something Michael Scott would say on The Office.

Dr. Akilah Cadet: (27:08)
Yeah. It's episode two when they do the diversity day, two or three or something like that, which is a great episode, teaching moment, free tool, Sarah. We can have a discussion around that. So, when people are saying, "Colorblind, I don't see color," what they're saying is, "I'm so privileged, that I don't want to consider that at all. I'm ignoring what the experience is like for myself or for Sarah." Not saying this of you, John, but that's what comes up from companies. And so when you do have companies that are 80, 90% white, what happens is the dominant culture of that workplace is white. So as soon as they hire someone like us to come in, we are already othered. We're going to receive those microaggressions that you're talking about, those little statements and actions, crossing the street like, "How do you... Is that all your hair? And how long does it take to curl it like that?"

Dr. Akilah Cadet: (27:59)
Not realizing that this is what my hair looks like after I wash it. Those types of statements, those small percentages of BIPOC people will have to deal with that all the time. So the way that companies should think about their hiring practices, their recruitment practices, is one, determining a metric that's realistic. Again, like I said earlier, don't just fire all your white leaders, that doesn't make any sense. But as you think about succession planning, who do you have lined up that can go into that role? How are you thinking differently? Take some time to look at middle management. Middle management is a great way to not only coach someone, but to get to know how they work to move them into senior and executive roles. So think about having recruitment around in that area, but the most important thing what you said, John, is to look at ways to minimize bias.

Dr. Akilah Cadet: (28:49)
You can not completely get rid of bias. It's just hard to do. I'm a twin, I'm biased towards twins. If someone said they're a twin in a interview, we are going on a tangent. Are you older or younger? How many minutes apart? Brother or sister? Do you like each other? That's a whole thing. So there's value in that, and it's a positive thing, but it's done in a negative way to keep hiring people that look like you, and look like you ties back to the majority of the workplace, then that's an issue. So, what are some questions that people are asking in the interview process? What of the application? What do they have in there about their diversity statement, or how they're on a diversity journey? Are they making their application already biased in a way that says you have to have four years of education, or can you have lived experience? Do you need to have a technical degree or not? Do you a suggestion for timeframe or someone open to learning? And all of those are ways in which people can work to diversify their workplace.

John Darsie: (29:50)
That's great. And you can strip out the company names here obviously, I don't want to break anyone's privacy, but are there examples where you've either gone into a crisis situation, or it could be somebody who it wasn't a crisis, and you came in and you helped re-engineer their culture in an effective way, the way that I think you would hope and dream to change organizations, are there any specific case studies that you could talk about where it worked really well so people could visualize what that looks like if they're sitting here watching, and they want to undergo this change, but they don't know what the path is to getting there?

Dr. Akilah Cadet: (30:26)
Yeah. I mean, so the wonderful case studies we have like the Disneyland example, if you will, is that the highest level leader is on board. They're like, "Look, I may be part of the problem. I'm white. I don't know. How can we get better aligned to be more diverse?" So, when we work with leaders like that, automatically we're changing the recruitment process, automatically in addition to the recruitment process, the interview process, we'll have always two people interviewing minimum, because when you have two people interview minimum, then it minimizes bias. Because if someone's like, "Ooh, that Akilah reminds me of this person I dated, so thus therefore I'm not going to listen to them." The other person's going to be like, "Well, actually they were really likable." And so it's a way for accountability in that process. And then we will automatically have external and public statements, diversity definition, so diversity terms of definitions, updated values, and improved policies and procedures.

Dr. Akilah Cadet: (31:27)
So when we get to do that with our clients, the outcome is everything, and that stems again from the executive leader. We've had situations where I've had to be the Olivia Pope and come in and do crisis management, and that is harder, because that means that at least two leaders didn't agree on the same outcome of how to respond to something. So for example, anytime there's... I hate to say anytime, but when there's a tragic event that happens, whether it's the insurrection or a murder of a black person or [inaudible 00:32:01] or whatever it is, we always tell our clients that they have to have boiler plate templates ready to go, to email their team so they can remind them, "If you need screen-off time, if you need to take time off, you can talk to your manager."

Dr. Akilah Cadet: (32:14)
You have employee assistance programs. "We're going to have a chat with the diversity committee later this week." We'll have those messages. So, we had a client who did that perfect, beautiful message, "Sign off for the rest of the day. It's too much." And then that leader kept working, kept sending emails. So, you can only imagine, both of you, what that's like, when it's like, I have the permission to just figure out what's happening right now, just to take care of myself, and then feel like I'm behind, and now I need to do that. So as soon as we have leaders who aren't ready to role model the behavior which they've communicated, again, the actions and words aren't matching, that is incredibly challenging. So, that means our engagement may actually extend to help with that behavior change.

John Darsie: (33:00)
Well, that's fantastic. And I'm so glad... One of the reasons why we brought Sarah in as a guest host is we wanted to meet new and different types of people that wouldn't necessarily be the first people that we called. And by us meeting you and getting to know you and exposing our audience to different points of view, we hope to create virality of these types of perspectives and these types of initiatives that I feel like are accelerating in the wake of some of these tragic events, as you mentioned, but obviously there's a huge hill to climb and we need more allies and more soldiers of change, or Cadet's of change, if you will. Darsie, my last name, has French origins as well from a certain region of France, so we're brother and sister, Dr, Cadet-

Dr. Akilah Cadet: (33:42)
Love it. It's like [inaudible 00:33:42]. It was fantastic. Yeah.

John Darsie: (33:42)
We're brothers and sisters, so thank you so much for joining us.

Dr. Akilah Cadet: (33:48)
We are, for sure. Yeah, we both, again, have great hair.

John Darsie: (33:49)
Yeah. Thank you for having an open mind and... Thank you very much. I appreciate that. My mother would agree. But anyways, thank you so much again for joining us. Hopefully we can do more business with you in the future, both at SkyBridge and introducing you to other people in our community, and we can get you to one of our live events as well. I think it's also something that we've struggled with in industry, the financial industry, that, let's be honest with ourselves, whether it's venture capital or hedge funds, overwhelmingly white, and it's just hard to break. It's almost like trying to break the cycle of poverty, breaking the cycle of extreme whiteness in these industries where we try to put people of color and women on our stages, at our conferences, without it being tokenism.

John Darsie: (34:33)
And we've gotten better at that, but we can definitely do a better job. And the more people like that we put on stages, and the more people like you that come to our conferences and talk about these things, the more people of color, and the more women feel comfortable showing up, and it feeds on itself and has a sort of a snowball effect. So, that's what we're looking to create. We've done better at it, and I think we do better than a lot of people in the industry, but again, we have a huge way to go to improve everything that we're doing, so thanks again.

Dr. Akilah Cadet: (35:00)
You're very welcome. And I just have to say the allyship that's happening is fantastic. The hardest clients to work with, or they aren't ready, are typically hedge funds, and the financial space for those very reasons. So what you're doing is really important to inform them of different ways in which they can show up, either doing things for free, or bringing in the consultant. And then Sarah is always doing things. In partnership, or we work together, she's keeping me abreast of things, and any way I can step in and help her out in any way is great. But just her being in her space is an act of resistance, but it's another way to change the way people are thinking about financing, so thank you both for your wonderful allyship.

Sarah Kunst: (35:44)
Thank you.

John Darsie: (35:45)
Well, thank you again, Dr. Cadet, and thank you Sarah again for bringing all these great guests to us here on SALT Talks, and for hosting these talks. And thank you everybody for tuning in today, just by tuning in and watching this episode and watching it all the way through. I think sometimes there's people when these topics come up at a conference or on a digital interview like this, some people turn, they don't turn the channel, because they don't want to feel the discomfort that comes with confronting some of these issues. So, thank you everybody for watching and tuning in, you're contributing to the betterment of society by doing that. And just a reminder, if you missed any part of this talk or any of our previous talks, including several that we've done with Sarah, you can both access our entire archive of SALT Talks, and sign up for all of our future talks on our website at salt.org/talks.

John Darsie: (36:30)
Please follow us on social media. We're on Twitter, we're on Instagram, LinkedIn and Facebook, and on YouTube is where we host all of our videos for free. Some people in the industry gate content and try to sell subscriptions for these types of conversations. We don't believe in that at all. We want to make all these interviews that we do open to the public, and a educational resource for people, not just in the financial industry, but in our communities as a whole. But on behalf of the entire SALT Team, this is John Darsie signing off for today. We'll see you back here again soon on SALT Talks.

Election Lessons 2020 with Commissioners Benjamin Hovland & Donald Palmer | SALT Talks #153

“In my 20 years, this was the best run election I’ve ever seen.”

Benjamin Hovland and Donald Palmer both serve on the U.S. Election Assistance Commission (EAC), each nominated by President Trump and confirmed by unanimous consent of the U.S. Senate. Their work includes securing funds for states’ election security and improving all levels of voting administration.

The Let America Vote Act, which included the creation of the EAC, was passed after issues related to the 2000 presidential election. Because of the decentralized nature of voting, much of EAC’s work is non-regulatory and is focused on helping to support states’ individual needs. COVID-related health concerns created a shortage of poll workers that the EAC helped shore up with a national poll worker recruitment campaign. Despite a notably successful election from an administrative perspective, voting systems came under attack from many who sought to cast doubt on the results. “The allegations that were made against the voting systems just were not accurate. I always have an open mind… but the evidence just wasn’t there to prove that.”

Many of those hurt by unfounded accusations have been the election officials themselves who year after year are tasked with a thankless job critical to a healthy democracy. The ongoing effort to delegitimize elections will have long-lasting, damaging effects. “When we’re talking about our democracy and how our elections run, we’ve got to have a baseline of facts and truth. When we get away from that, it really hurts the fabric of our nation.”

LISTEN AND SUBSCRIBE

SPEAKERS

Commissioner Benjamin Hovland.jpeg

Benjamin Hovland

Commissioner

U.S. Election Assistance Commission (EAC)

Commissioner Donald Palmer.jpeg

Donald Palmer

Commissioner

U.S. Election Assistance Commission (EAC)

EPISODE TRANSCRIPT

John Darsie: (00:07)
Hello everyone, and welcome back to SALT Talks. My name is John Darsie. I'm the managing director of SALT, which is a global thought leadership forum and networking platform at the intersection of finance, technology and public policy. SALT Talks are a digital interview series with leading investors, creators and thinkers. Our goal on these SALT Talks is the same as our goal at our SALT conferences, which is to provide a window into the mind of subject matter experts as well as provide a platform for what we think are big ideas that are shaping the future. And we're very excited today to welcome you to the second episode in our Elections Integrity series, focusing on lessons that we learned during the 2020 election as well as just setting the record straight about the facts of how elections operate, the security around elections, and again, things that we can take away from what was a very unique election in 2020 and how we can continue to hone and improve that process going forward.

John Darsie: (01:05)
And our guests today for this session are two members of the Election Assistance Commission, Benjamin Hovland as well as Donald Palmer. And I'll start with Ben in terms of reading his bio. Benjamin Hovland's 20 year career in elections has been shaped by his commitment to improving election administration and removing barriers to voting. Most recently, he served as acting chief counsel for the US Senate committee on rules and administration, where he was a driving force behind Congress appropriating $380 million in Help America Vote Act funds to enhance election security to the states in 2018. While at the Senate, he focused on the federal government's role in election administration and campaign finance regulation. He organized several hearings on election security preparations and improving election administration. He was integral to restoring a quorum at the EAC in 2015. Donald Palmer is a former bipartisan policy center fellow where he advanced the recommendations of the presidential commission on election administration.

John Darsie: (02:11)
Mr. Palmer is a former secretary of the Virginia State Board of Elections and served as the Commonwealth chief election official from 2011 to 2014. During his tenure, he implemented an online voter registration system and joined Virginia as a founding member of the Electronic Registration Information Center, or ERIC, which is a nonprofit organization with the sole mission of assisting states to improve the accuracy of America's voter roles and increase access to voter registration for all eligible citizens. He also served as Florida's director of elections, where he successfully transitioned the state from electronic voting machines to paper-based digital voting machines prior to the 2008 presidential election and expanded the Florida voting system state certification program. Hosting today's talk is Elliot Berke, the managing partner of Berke Farah. And I'm going to turn it over now to Elliot to conduct today's interview.

Elliot Berke: (03:09)
Great. Well, thank you, John. Don, Ben, thanks so much for joining us. As John talked about, this is the second in our series on election integrity. And by design, what we're really trying to do here is bust through some of the hyperbole, tone down the noise and talk about what actually happened with the election. Our first session was on election security. And today we're going to talk about overall election administration and lessons learned from this election, what went right and where do we need to go from here?

Elliot Berke: (03:39)
So, we have two experts that are joining us today. Don and Ben not only serve on the Election Administration Commission, but they are also they've had a significant amount of experience in the states. This session is really designed to talk about and educate our viewers about the election process. Let's start out with the EAC, and what it is and what it is not. It is obviously not the FEC. It's not the Federal Election Commission, which actually has nothing to do with administration of elections. Donald, I'll turn it over you to start. Tell our viewers, what is the EAC, why do we have it, what were its origins and how has it evolved over time?

Donald Palmer: (04:24)
Well, sure. The Election Assistance Commission really came out of the 2000 election, Bush v Gore. Well, the Congress came together and it came together with a bipartisan bill, and some of the issues they looked at was creating the EAC. They wanted to have a federal entity test and certify voting systems on a voluntary basis. They wanted to provide some monies to the states to transition to new voting systems. They also wanted to start collecting data and to provide best practices. And so the EAC started all the way back then. It's only been a couple of decades, but that is really the origin of the EAC. And since then, the budgets, there'd been some smaller budgets and higher budgets. We are just coming out of a couple of years where we almost didn't exist as an agency, that we are almost basically eliminated as an agency. But I think that as the security issues arose at a 16, there was a refocus on what purpose the EAC could serve and actually assisting local and state election officials. And I think there's a change in that thinking across the board in the election community.

Elliot Berke: (05:37)
Ben, John kicked things off, he mentioned the help America Vote Act. Talk to us a little bit about what that is and how you interface with the states to bolster what the states do.

Benjamin Hovland: (05:50)
Yeah. Great to be here, Elliot. Thanks for having me. The Help America Vote Act, as Don mentioned, that was passed after the Florida 2000 election. It created the EAC. It also did a number of things. It got rid of punch cards. Everybody remembers the hanging charts from the 2000 elections. It helped get rid of those and provided a lot of funding to do that at the states. But because our elections are decentralized, one of the roles that we really play the Don hit on was serving as that federal clearing house. In other words, we're largely non-regulatory, but we're able to have that 50 state view. We conduct something called the EAV survey or the Election Administration and Voting survey, which is the only national survey of its kind that looks at how Americans are getting registered, how they're participating in the process in the sense of are they getting registered at the DMV, are they getting registered by a third-party group, are they voting by mail, are they voting early, are they voting in person?

Benjamin Hovland: (06:50)
And so it really gives election administrators, policymakers, the ability to look at the data and make data driven decisions. And so we're proud to do that as well as assist state and local election officials around the country with best practices, helping to share those. We really have the benefit of seeing the different ways that states implement elections, how they solve this puzzle of helping Americans participate. And this year in particular, you were really able to see how that decentralized nature of elections, some of those best practices were able to be shared and help more Americans participate across the country, help election officials respond to the challenges they faced this year.

Elliot Berke: (07:35)
I think coming out of this election we just had, it's harder to make these arguments. But playing devil's advocate, since its inception, the EAC has been criticized from the right as being obsolete and also concerns about [inaudible 00:07:50] attempting to federalize elections. What do you say to the critics who make these arguments?

Benjamin Hovland: (07:57)
So first and foremost, again, we're largely a non-regulatory agency. And so again, if people are worried about federal overreach, we're not designed to work that way. But I think you can really embrace the decentralized nature of elections, and that's what we're structured to do. Again, as Don mentioned, there been historic resource challenges that make that harder. But when you think about what's involved with running elections, particularly after the foreign interference of 2016, election administration is harder than it's ever been. And so to have a non-regulatory, largely non-regulatory federal agency that's able to share best practices, that's able to assist with training, that's able to provide information, and resources, whether those are grants from Congress, certainly we've seen over $800 million in security money distributed since 2018, $400 million in CARES Act funding this year. Obviously that's made a big difference.

Benjamin Hovland: (09:01)
But there are also resources that are beyond just money. There's also the ability to use the national platform. One of the things that we did this year that I'm really proud of, we heard consistently from election officials about shortages recruiting poll workers. And we were able to launched the National Poll Worker Recruitment Day effort. Again, having a national platform, a national website in helpamericavote.gov, but when you went to that website, it got you to your local election official or to your state or local election official. The place that you ultimately needed to get to but we were able to amplify that at a national level, and it really made a difference in getting a new generation of poll workers to step up and help Americans vote this year.

Elliot Berke: (09:50)
Don, in the lead up to the election in November, what else did you see in terms of potential issues that were out there? Those who are in the election business, we know that elections are messy, vote fraud exists. This is my opinion, vote fraud exists, vote suppression exists. But, a lot of what we ultimately see is just cracks in the systems, which we can fix along the way. And so the lead up to 2020, what else beyond the poll worker issue did you see that brought you the most concern?

Donald Palmer: (10:24)
Well, in the lead up to 2020, the big issue that we faced all together was the pandemic. And just like every other institution in the country, that was a big challenge. How were we actually going to administer elections? And states and localities had the same concerns, how are we going to pull off the primaries, how are we going to do a general election in perhaps a totally different environment where people may be afraid to actually go and vote? And so a lot of states and localities had to make adjustments to how they vote. There was more vote by mail than ever before. When we did do in-person voting for early or election day, it was going to have to be in a sanitized manner. There was going to have to be social distancing, so there were going to be some additional lines.

Donald Palmer: (11:08)
And so when we look back on 2020, that was a huge challenge. And really election officials stepped up to it because it was a success from a point of view that in many ways there could have been a total meltdown. And you're right. In every election, there's going to be flaws. There's going to be lines or maybe malfunctions of the voting systems. And I think that the EAC had ... I know the states, they're very proud of the work they put into let's make sure and test our voting systems, let's make sure they're secure and they're operational and they're not going to break down on election day. Sometimes these things happen and we record these things that we want to improve for the next election.

Donald Palmer: (11:47)
And so those were the two big issues I think that everybody was concerned, that look, we want to do we can to make sure that on election day and in a run up to election day, election workers are prepared to deal with the great turnout that voters will have when they show up. When you have 10%, 15% increase in turnout, it's going to stress the system. It's going to make everything a little bit more difficult than it would be let's say if turnout was half of that. But I think that one of the things we can take away from November is that we got through the election, and that we were able to overcome the pandemic in many ways and Americans were actually able to cast a vote and effectuate their intent. And the bottom line is that's the bottom line, is that we are able to do that.

Elliot Berke: (12:37)
And then compared to past elections, obviously we were dealing with things that we had never experienced before with the pandemic. And then the volume of mail in ballots that was unprecedented. We certainly have mailing ballots and we've dealt with this before, but just the volume is something we hadn't dealt with. How overall, what's your assessment at this point? I know the EAC is going to be having hearings and audit the actual results, but how comfortable are you at this point in terms of the overall result as compared to past elections?

Benjamin Hovland: (13:13)
Elliot, I think one of the stories that been lost in some of the post election day, I don't know, back and forth, or what some of the misinformation and disinformation has been the amazing job that election officials did this year. Again, as Don was saying, ramping up for the pandemic, unprecedented challenges. You had people who were running, as you said, the largest mail election that they'd ever run but also needing to keep polling places as safe as possible for in-person voters. And what you saw, I mentioned this earlier, the way that some of the election community came together, you had folks from Oregon and Washington and Colorado and Utah who'd been running full mail elections or who had done that transition, sharing the lessons learned with their colleagues across the country through vehicles like the EAC. We had a working group within the government coordinating council, which has federal state and local partners. We're able to share those best practices for jurisdictions that had maybe not experienced as much mail, who didn't have that luxury of time to ramp up.

Benjamin Hovland: (14:25)
We were also able to share information from partners with the CDC on how you make polling places as safe as possible. And then also what you saw was an amazing job getting the word out that voters were going to need to spread their vote out to help limit congestion. Again, that was in the CDC guidance. And so you did, you saw a record amount of mail and absentee voting. You saw a record amount of early in-person voting and you still had a significant election day turn-out, which is why we had nearly around 160 million Americans vote. But the mechanics, the election administration of 2020 was really done well. As Don mentioned earlier, there were hiccups. There always are. That's what happens when you have 160 million people involved in a process across over 9,000 jurisdictions across the country. There are going to be hiccups, but none of those were significant. None of those were out of the ordinary. And again, in my 20 years, this is the best run election I've ever seen.

Elliot Berke: (15:31)
Yeah. I appreciate those comments because I think that when we describe elections, sometimes the media forgets that this is a partnership. And even going back to Chris Krebs, who was at DHS and in charge of the cyber office and the comment that ultimately got the president's attention led to his firing. If I'm correct, that statement was actually part of a joint statement that, Ben, you were a part of, that talked about the overall success of the election. So on one hand, you have the underlying result. You also have criticism for the person saying it and whether or not that person's in the right position of expertise, I think [inaudible 00:16:14] lost in that entire situation was that that [inaudible 00:16:18] statement that reflected a federal state local, and to some extent, even private party partnership. And it was the assessment of all those components [inaudible 00:16:30].

Benjamin Hovland: (16:31)
That's right. And again, it was about the security of the election. And the reason that that statement was made and the people were able to say that with confidence was because we'd seen what had gone into it. The $800 million in federal grant money that had gone out for security, that had replaced paperless voting machines, that had hardened statewide voter registration databases. It had led to countless hours of training for state and local election officials around the country. You had seen over the last four years the amount of work that state and local election officials put in. Again, going through these trainings, going through tabletop exercises, replacing equipment, increasing audits.

Benjamin Hovland: (17:14)
And so all of those pieces contributed to a knowledge of how much had been done, contributed to having the visibility across the country. Again, as you know and as I mentioned earlier, there's nearly 9,000 jurisdictions around the country. But for the first time ever, you had network monitoring on all of those states. You have thousands of jurisdictions that now participate in an election information sharing and analysis center. Those things didn't exist before. And ultimately you had over 90% of Americans voting on a paper ballot or with a paper or on a system with a paper audit trail. And so all of those could be reviewed. Again, all of those factors just adding to the confidence we had in the security of the election.

Elliot Berke: (18:09)
Yeah. We'll get to the litigation, but some of these underlying issues, allegations, that have been raised, how do you feel about that given where you guys sit? You must have some reaction. I know we probably don't want to go state by state in the litigation, but you must have some reaction in terms of what's ultimately alleged in court and we'll talk about that, but the allegations that really that we saw that were unprecedented in terms of the the attack on the integrity of our system. Given this is not what just you deal with day to day, but you've built your career on it. How does that make you feel?

Donald Palmer: (18:52)
Well, I think that I had the opportunity to testify to the Senate, and we talked a little bit about the unprecedented attack on the voting systems and the accuracy of those systems. And frankly, that is something that both Ben and I and the commissioners that serve on the commission, that's our over reaching duty. And I've been involved at the state level and the testing of voting systems and now at the federal level. And so there's a whole mechanism for the testing. And it's not new. Look, going back since I started in this second career, I've heard criticism of the voting systems and the testing of it and how we could do better. And much of that is true, is that that's why I always have a sense of trying to improve what we do from an oversight perspective and testing and listening to experts.

Donald Palmer: (19:45)
But I think that at some point, as I was asked is do you have trust in our voting systems? And I think generally the evidence is there that our voting systems have been tested both at the federal and state level and at the local level for a multitude of elections. And so the allegations that were made against the voting systems just were not accurate. And I'm always having an open mind and I try not to cut people off, but the evidence just wasn't there to prove that.

Donald Palmer: (20:17)
And then the second part of that is, is again, there's other ways to try to or attempt to defraud a voting process on an election that may not involve voting systems. But again, that's outside our jurisdiction. And again, there were opportunities for candidates and campaigns and law enforcement to do investigations and prove that, and they never brought that evidence. And so the reality of it is, is that, that the evidence is simply not there to make allegations of fraud that would go to a point where, for example, 10 to 12,000 in Georgia, 20,000 in Wisconsin, the differentials in the races were to a point where the amount of fraud that may take place at a local level would not reach the level of changing results at the state level. And so we had the opportunity to talk about what we do at the EAC to protect those voting systems and how we work with locals. And that's what we did. And we just let the chips fall where they would fall.

Benjamin Hovland: (21:24)
And I'd add to that, Elliot, again, the folks who run elections across the country, the state and local election officials who do this, this isn't a job you get into because you want to get rich. These people care more about the integrity of our elections than anyone I know. They want to get it right. And that's bipartisan across the country. The parties not trusting each other isn't a new thing, and so the whole structure of the system has bi-partisan checks and balances throughout the process, whether that's bipartisan teams in polling places. Sometimes you got the back-end piece, but throughout you have all of these checks and balances built into the process to make sure it's accurate. Some of the time, frankly, that it took to get results was tied into security measures that are put in place.

Benjamin Hovland: (22:16)
I remember seeing, people were talking about getting results in Nevada. And the local official there, Joe Gloria, was giving a press conference and he was talking about how they were reconciling provisional ballots. Again, they were doing that checking with colleagues across the state, checking with the secretary of state, to make sure that no one had voted in more than one place, to make sure that people were eligible to vote in that jurisdiction. And again, those are safeguards and safety measures that are put in place to make sure that the election does have integrity. And again, what we ended up seeing was a lot of rhetoric that wasn't backed up with facts or evidence. Again, my experience has been if you present any of that to election officials, they want to get to the bottom of it. Again, they have all these procedures in place to ensure the integrity of the election. And at the end of the day, there was ample opportunities to present that in court and we never saw it.

Elliot Berke: (23:16)
Yeah. I think ultimately the Trump campaign went one in 62, something like that, in terms of the challenges. How closely were you following that along the way, were there times in certain states where you thought these allegations more serious than others, is there anything that really got your attention during that time?

Benjamin Hovland: (23:41)
[inaudible 00:23:41] following it, of course. That's the job. Obviously there was a lot. So, some days it was a little hard to keep all the different things straight, but I think what you'd kept focusing on was let's see the evidence, let's hear where there are valid claims. If there are valid claims, let's get to the bottom of it. Again, I think the point of running elections is to give the people a chance to make their voice heard and make sure that the outcome reflects the will of the voters. And so, again, I think where sometimes there were allegations made, obviously there were a lot of things around. And when you dug into that, there were answers. There were misunderstandings of the process. There were just rumors or conspiracy theories that frankly didn't make sense.

Benjamin Hovland: (24:38)
But again, it was certainly an effort to try to keep track of the volume and everything that was going around. It was important to try to educate people to the process where we could, certainly whether that intersected with things like our certification program or elections generally. One of the things that I don't think we anticipated how it would come into play but was an important effort this year that I know we were proud to participate in was the National Association of Secretaries of State drove an effort called #TrustedInfo2020, which was really about getting people to go to their state and local election officials for that to source information. And really, again, getting that from the source, how the process works. And I think once you got down to that, again, you saw so often, that there wasn't a real basis in this or it was a confusion about different processes.

Benjamin Hovland: (25:37)
And so I'd like to see us do more to help people understand the process. Obviously a lot of folks got a pretty big civics lesson this year. But I think we can continue to talk about the work that happens after election day. I think most people are used to tuning into the news on election night, seeing the result, and then forgetting about the election, not knowing that there are weeks worth of work still to go in processing those ballots and confirming whether or not people were eligible and recording voter history, all of those checks and balances that we mentioned that go into the canvas and certification process. And so I think, again, one of the things that we can do as an agency is look for more ways to help educate Americans on the process and make that more accessible.

Donald Palmer: (26:26)
Elliot, I was following a lot of it but I started to focus on those issues that involve the EAC like the voting systems and that sort of thing. And I think that one of the things I found is that oftentimes an election worker error or some other error would be confused with some sort of vulnerability in a voting system. And so a little bit of investigation into that would reveal that. What I found frustrating at the EAC is that we're a small agency and some of these facts were easily obtainable, but we weren't always asked to provide commentary. I think that from a perspective of oversight, I think the EAC could try to play more of a role as a independent third party for testing.

Donald Palmer: (27:13)
You saw some of that, for example, with one of our accredited labs in Georgia, was there were some issues regarding allegations of voting systems in Georgia. And I believe it was like eight to 10 counties basically sent the software to an accredited lab and they did a review of the software to make sure it was still the same software. There hadn't been any changes. And after review, that was what that lab found. But as I think about what the EAC could do in the future is that we could do more of that in the assistance of localities and states that perhaps there's a level of distrust that they may not believe each other of political parties, for example, but the EAC may be able to play a more beneficial role in the future looking at the forensics of some of these things after the election. That's just a thought.

Elliot Berke: (28:08)
Yeah. And I think that you touched on this a little bit, but part of this I think whole ordeal has been a good education for the American people, and to some extent, even some of the councils involved. Talk a little bit about this over voting, under voting issue, which to me was one of the most flavoring examples of people talking about a concept that happens in elections, every election. It is not unusual. It was not statistically different than we'd seen in the past, but talk a little bit about that and maybe then how the media helped drive this apparent controversy.

Donald Palmer: (28:52)
So I can talk a little bit about it. Overs and unders actually, the overs and undervotes, this first really came into play from my perspective after 2000, when there was a lot of debate of why there was a certain number of undervotes, which is members or candidates on down the ballot aren't having a ballot cast for them while there's other members on the ballot or candidates that are. And over votes were when there may be more ballots cast for two or two ballots cast for a candidate.

Donald Palmer: (29:23)
And so these are basically mistakes on the part of the voter or they intentionally decide not to vote for a certain candidate, they decide to vote for others. But it became such an issue after 2000 that the Florida legislature required the reporting of that. So these are the types of things that though can spawn conspiracies, and why didn't my candidate get this many votes when this candidate did? And I think that explaining what they are and why they're split votes or there's undervotes is really an issue that I find myself playing political scientist occasionally, explaining that Americans still do divide their votes. Sometimes they decide to undervote, and so not every candidate is going to have the same amount of votes. Ben, you want to weigh in on this one.

Benjamin Hovland: (30:13)
Yeah. I'll just add too, you saw a number of Americans voting in different ways this year. We know from the EAV survey that I mentioned earlier, that historically about 25% of Americans vote by mail or absentee ballot. That number is probably going to be closer to 50% this year depending on a state's cure process. If you're in a polling place in person and you accidentally vote for two candidates for the same race, for example, an over vote, and you put that in a scanner, it's going to kick back and tell you that you may have spoiled that ballot. If you're doing that on a mail ballot and your state doesn't have a cure opportunity, that vote's just canceled out in that race.

Benjamin Hovland: (30:59)
And so again, that's a small thing, but those are the details that's the nuance that goes into election administration. And that's the type of thing that you could see this year. And as Don mentioned, of course there's oftentimes people that are going out for a particular candidate. If anyone's lived in some of the states with longer ballots, you definitely see drop-off. And so there's an array of reasons that you do see these variables out there. And again, it's just part of election administration.

Elliot Berke: (31:38)
What about this allegation about votes being changed, that there was some sort of hack or some sort of systemic software manipulation. Talk a little bit about not just the allegation, but also the nature of how these machines work and how difficult, if not impossible, something like that could be.

Benjamin Hovland: (31:58)
Well, one thing I'd point to there, first and foremost, I mentioned earlier that you probably had about 95% of Americans vote on a paper ballot or with a paper audit trail this year, which is way more than we've seen in recent elections. And you saw that probably the best example to point to on talking about the audit process or whatever is, you look at Georgia. Georgia was one of the closest races across the country. They reviewed their ballots a number of times electronically. It was part of an audit process, but they essentially did a hand check of every single ballot in the state. And those were all largely identical. And again, that is a check that paper audit trail is a check on the computer system.

Benjamin Hovland: (32:50)
And so even if you were somehow manipulating coding, you've got to then be manipulating a paper audit trail [crosstalk 00:33:00] that voters don't detect that or see that. And so again, if you think about a presidential race, many times that's the primary reason somebody is going to go vote. And so do you really think that tens of thousands or hundreds of thousands of people aren't going to notice? There's some research papers on it that I won't go into to bore you, but the point is that you have this check, you have this ability to audit that was done electronically, that was done by hand. And time and again, it reinforced the results and showed that the systems were accurate. And that was in Georgia, but that was around the rest of the country. And again, that's part of the checks and balances that are built in the system to ensure the integrity of the election.

Elliot Berke: (33:49)
Another interesting development we've seen over the past few weeks is the litigation [inaudible 00:33:57] has been filing and the threats of litigation against media outlets. We've seen retractions from Fox, Newsmax, the [inaudible 00:34:06]. This is something we've never really seen at this level in all candor. Do you think this in and of itself will help self police things moving forward that maybe the media is realizing they have to be ... That's behavior and actually report the news based on facts? [inaudible 00:34:32] about that.

Benjamin Hovland: (34:35)
I want to say something that my dad used to say to me, but it's probably not appropriate for this forum. The more polite version is probably the Daniel Patrick Moynihan, "You're entitled to your opinion, but not your own facts." And I think when we're talking about our democracy and we're talking about how our elections run, we have got to have a baseline of facts and truth there. And I think when we get away from that, it really hurts the fabric of our nation. It hurts our democracy. The rules of the game get set. You run by that, you win and you lose. And foundationally, that's got to matter. And we've got to respect the will of the people. That's how this whole experiment got kicked off a few hundred years ago.

Elliot Berke: (35:23)
Right. That's right. So we're just past 2020. 2022 is on the horizon. What do you see as next steps in terms of improving what it is we do, the things that you think the EAC can help [inaudible 00:35:40] as we get ready for the next one?

Donald Palmer: (35:44)
Well, one of the things that I see is, on election day, one of the major issues that we kept hearing about was electronic poll books were having some issues breaking down or having issues connecting with voter registration systems. And one of the allegations out of Georgia was one of their electronic poll books was hacked remotely. This gets to a point where non-voting systems don't really have the same regulatory scheme that we've talked about, where there's testing and certification, but they are connected to the internet and they're vital to election services. And so many states will do some testing. Obviously they buy this equipment, they need it.

Donald Palmer: (36:29)
One of the things we've looked at the EAC is how can we provide assistance to the states in testing of that equipment, how can we provide some recommendations and how can we provide the information that we find to localities on that equipment? Because non-voting system is becoming more vulnerable yet it's vital to how we do elections in this country. And so it's one thing the EAC is going to be looking at because we frankly want to have our non-voting systems as secure as we believe our voting systems are. And we've got some work ahead of us and we're going to do that.

Elliot Berke: (37:07)
Yeah. From a security perspective, that seems to me, I agree, is one of the most vulnerable areas. And moving forward, I think that that's ... And some secretary [inaudible 00:37:19] spoke in our last session about. We haven't really seen, it's been remarkable how little success has been by third parties in terms of hacking our election infrastructure as opposed to other critical infrastructure of the United States. And so on one hand, I think we've been very fortunate and we've been prepared, but moving forward, we have to recognize that as a huge vulnerability.

Donald Palmer: (37:46)
Well, I think that the whole SolarWinds scenario has really awakened some eyes because it's like we can believe that we're doing a good job protecting ourselves and securing our systems but in some ways we may not know the extent of our vulnerability until after the fact. And so from my perspective, I think that this tells us a lot that we can never let our guard down, frankly. From a substantive point of view is you may already be hacked and simply don't know it.

Donald Palmer: (38:19)
And then this goes back into some aspect of what happened in 2016. There was some allegations, and the truth of the matter is it's a little bit unknown, but what we believe what happened is there was a number of counties in Florida, probably two or three, that there were some vulnerabilities there, where there were infiltrated. No voter registration data was captured. But what that tells us is that sometimes these things occur without us really knowing about it. And we may not know about it for national security reasons for years. And so as we sit here today, we may not know the full extent of SolarWinds and what foreign countries have tried to do with our critical infrastructure.

Benjamin Hovland: (39:04)
And one thing I'd add to that, Elliot, I think a couple things. So first of all, at the EAC, we're on the verge of adopting a new set of voluntary voting system standards. That's a big deal. And it will include things like software independence and offering additional support for audits. That's a big piece of what we're talking about. To Don's point, computers are hackable, that's the reality. So do you have systems in place, safeguards in place, to ensure that you're able to detect that, you're able to pick that up. That goes into the point I was making earlier about the amount of paper that we saw this year. The fact that more and more states and jurisdictions are implementing audits. And so to the degree that we can help enhance that, increase that, I think that's an important piece.

Benjamin Hovland: (39:50)
But we also know that the lowest hanging fruit in many ways is disinformation and misinformation. And so as I look at how we can play a role, as we look at the things that can be done, I think a lot of it is helping people to get that trusted source information. Some of that is a resourcing issue. Don mentioned earlier, our budget, it's increased a little bit in the last couple of years thankfully. But even this year, we just got our largest budget in over a decade at $15 million. That is well below the Federal Election Commission that does come in finances around 70, and that's nothing compared to the agencies that most people are familiar with. And so there is a need to invest in our democracy, whether that's the EAC, whether that's with state and local governments. Again, the Congress has provided through the EAC a lot of grant money, but we consistently hear from state and local election officials about the need for an ongoing funding stream.

Benjamin Hovland: (40:56)
I think about obviously our democracy is core to our identity as a nation, core of what we do and what we believe in. And when you talk about election administration, that's the infrastructure of our democracy. And so investing in that, making sure that the systems are working the way that they're supposed to, investing in that in a way that can educate people. One of the things I'd love to see us do is, again, knowing that elections are decentralized, have a one-stop shop where we can get people to the right place, to their secretary of state, to their state board of elections, to their local election official, or get them that information from that trusted source so that we can help people understand the process, better understand how they participate in the process, help people fact-check things more quickly to try to combat this misinformation that you see in this space.

Elliot Berke: (41:52)
I know we're getting close to our time here, but I did want to ask a couple more questions. One is on voter roll accuracy. That seemed to be a really big issue on this election [inaudible 00:42:05] but I think this time around it got a little bit more attention. What can you guys do to help states clean up their voter rolls? Because I think that is a strong way that we can bolster our integrity in our system.

Benjamin Hovland: (42:20)
Well, certainly National Voter Registration Act governs a lot of that. And Don [inaudible 00:42:26] mentions his role in getting Virginia involved in the Electronic Registration Information Center, ERIC, so I'll let him hit that. That's obviously an important effort and step. But again, I think their list maintenance is a challenge, but voter rolls being clean is good for everybody. It saves jurisdictions money, it prevents accusations being made about this or that. But the reality is it's a real challenge. You have Americans that turn 18 every day. You have Americans that die every day. You have Americans that move every day, and that requires a constant effort to maintain election rolls. And it is a real challenge, certainly one that I think to the degree that we can help with best practices. I think that's a great effort.

Benjamin Hovland: (43:21)
Again, I'll let Don talk about ERIC, but efforts like that I think are hugely important to ensuring that the rolls are as accurate as possible, that Americans are engaged. And to the degree, I mentioned some of the voter education piece. Helping Americans know that they need to update their address is a big piece of that. People move. They maybe go on and update their address with the post office and they think that takes care of it. But it doesn't. And so it's important for people to know they need to update their registration, whether that's moving across state lines or down the street. Because you may be in a different jurisdiction or it may save you time on election day to make sure you've got that right address. So those are important things to be able to emphasize.

Donald Palmer: (44:09)
So, Elliot, I think that the twin voting systems was one of the major parts that came out of HAVA, and the upgraded that. One of the things that get misremembered or not remembered is voter registration systems at the state level was the other factor there. And I really think that across the country, we really need a revolution in technology and upgrading those systems, both at the state and local level. And this is where Congress can really help, because again, this is a major part of the Help America Vote Act, was to allow the states to have these databases. And so the more technology and the more we upgrade those systems, the more accurate our voter registration systems are going to be.

Donald Palmer: (44:52)
So there's a substantive part of that and there's also the perception. And the perception is that why do we have people that shouldn't be on the rolls on the rolls. And I think that the Congress or the states really need to dedicate funding to that purpose. There's a lot of priorities and local election officials often just don't have the resources to do list maintenance the amount that they should be doing, in every quarter, for example. Usually they're going to need additional resources to do that. I think that if the EAC can provide best practices or helping jurisdictions find what's the best address for individuals, that's the type of thing that I think that localities would be helpful to localities. And so those are some of the things that I think the Congress or policymakers can look at, is how can we improve those voter registration systems?

Elliot Berke: (45:46)
What about on ballot harvesting and chain of custody issues? I'm an advocate for in-person voting but after this last election, I think we all have to be prepared for just increased mail voting moving forward. We may not see what we saw in 2020, but I think it's going to be there. What more can the states do to address this issue about harvesting and make sure that the chain of custody for mail and voting is as clear, and then again, from a public confidence standpoint, we're in the best position we can be in?

Donald Palmer: (46:21)
Well, I think without getting into the policy debate over it, I think that technology can really help us mitigate the problem that may have come with certain policies. I think that if we use technology to track where ballots are when it's in the possession of an election office or through the mail system, that gives everybody a warm and fuzzy that we know where the ballots are. We're keeping track of them. Sometimes these things cost money to implement existing technologies.

Donald Palmer: (46:56)
And so, once again, I encourage ... When I was at the state level, I spend most of my time trying to sell new technologies to localities and why it will help them do their job. And I think that it really sells itself. A lack of a chain of custody may actually come to burn a local election official very much so. Even the largest jurisdictions sometimes have difficulty maintaining a chain of custody. That's why it's so important. Failure to do so can get you on the six o'clock news or even on the national news. And that's where we don't want to be. And so transparency and using technology to improve chain of custody helps local [inaudible 00:47:43] officials do their job, helps us all do our job better and avoid what could become a political or partisan issue down the road.

Benjamin Hovland: (47:52)
And just to build off that technological point, I think you saw more jurisdictions during doing ballot tracking this year. That has been an innovation that has been spreading. And I think it goes a long way to solving a number of problems. Number one, I think it helps with voter confidence. People know where their ballot is in the system. They know when it's been received, if it's with the post office. It helps election officials to be able to catch problems before they really start. Maybe they get a call and they investigate and then they see, "Oh, there's a pallet still sitting in a warehouse at the post office." And they're able to solve that. It helps with staffing issues to know how many ballots are coming in a particular day, you can adjust for temps.

Benjamin Hovland: (48:39)
And I had heard that there was a ... The Federal Voting Assistance Program did a pilot. They specialized with military and overseas voters. They did a pilot with the USPS on full end-to-end tracking and checking on how that impacted voter confidence. And one of the things that I heard out of that was that they could do that for all military and overseas voters for between six and $8 million. And if you scaled up to that, it would be applicable or it would work for voters across the country. And so in the scope of things, that for probably $8 million, we could have end-to-end ballot tracking for all of the ballots across the country. That is a relatively minor investment, but one that needs to be made if you want that kind of service, if you want that kind of confidence. But I think that would be a great service for the voters both in giving individual Americans confidence in their process, but also helping election officials as well.

Elliot Berke: (49:41)
Great. Well, Ben, Don, thank you so much for your time. We greatly appreciate it and thank you for your service-

Benjamin Hovland: (49:47)
Good to be here. Thank you.

Elliot Berke: (49:49)
We're proud of you. John, back over to you.

John Darsie: (49:51)
Thank you everybody who tuned in to today's SALT Talk. I think it was a fantastic conversation. Thanks again Elliot for leading this series on election integrity and election operations. That last bit gave me a lot of hope that we can continue to build on the system that we have, which I think is fantastic. And people don't give the election workers around the country enough credit for what they've done for many years, but especially what they did this year in the midst of a raging pandemic to ensure that we had a secure and fair election. I think it's just amazing what they were able to pull off, and hopefully we can continue to build on our technological base that we have for our elections and restore integrity that has been called into question, I think, unfairly by some people in this country. We won't name names.

John Darsie: (50:37)
Anyways, thank you everybody for tuning into today's SALT Talk. By tuning in, hopefully you're able to learn some things that you didn't know before about election operations and can continue to spread the word about the facts of the matter in terms of our election processes here in the United States. But this was the second episode in our three episode series on election operations and elections integrity. We have one more coming up in a couple of weeks with the secretaries of state of Michigan and Georgia. That's Secretary of State Jocelyn Benson in Michigan, a Democrat, and Secretary of State Brad Raffensperger in Georgia, a Republican. It's been very important to us that we make this a nonpartisan, and in some cases, a bipartisan conversation around the facts of election operations and elections integrity. So we're very excited about that episode of this series.

John Darsie: (51:25)
And just a reminder, if you missed our previous episode of our Elections Integrity series with former secretary, Department of Homeland Security, Michael Chertoff, you can see that at salt.org\talks. And if you miss any part of this episode, you can watch it again on our website at salt.org\talks or at our YouTube channel. And please, I always say this after every episode, but please spread the word about SALT Talks and about this SALT Talk in particular. I think it's so important that as a society, we get the facts straight and we spread the word about the truth about the way our elections operates. So please spread the word. We're also on social media, please follow us. We're on Twitter, LinkedIn, Facebook and Instagram. And on behalf of the entire SALT team, this is John Darsie signing off for today. I will see you back here in a couple of weeks for the last episode of our Elections Integrity series with secretaries Brad Raffensperger and Jocelyn Benson. Thank you.

Wes Moore: The Fight Against Poverty | SALT Talks #149

"We have policies that are very much still in place that are putting people and keeping people in poverty; Where we have a legacy of public policy… that’s making poverty incredibly predictable."

Wes Moore is CEO of Robin Hood, a leading foundation in the fight against poverty. This follows a distinguished career in academia, military and the White House.

Venture philanthropy involves using business-oriented data to identify the best solutions to poverty around the country. The capital investments in communities are delivered in partnership with on-the-ground collaboration with the affected community members. It’s important that the investments made are not seen as charity, but as tools for change. This also requires understanding why poverty exists. Poverty does not happen in a vacuum, but is structurally predictable because of the public policy we implement. "We have policies that are very much still in place that are putting people and keeping people in poverty; Where we have a legacy of public policy… that’s making poverty incredibly predictable."

Poverty affects every aspect of a community and its members. The pandemic presented just another example of how the effects of COVID-19 were felt disproportionately in poor communities and communities of color. “Poverty has this way of showing itself in every way. It’s the water you’re drinking, the air you’re breathing, the food you have access to, the schools your children attend, transportation assets you have or don’t, the way you’re policed.”

LISTEN AND SUBSCRIBE

SPEAKER

Wes Moore.jpeg

Wes Moore

CEO

Robin Hood

MODERATOR

Anthony Scaramucci

Founder & Managing Partner

SkyBridge

EPISODE TRANSCRIPT

Jake Wood: Leading Through a Crisis | SALT Talks #148

"My unit has lost more men to suicide than we lost to the enemy overseas… I focus on things like the loss of purpose that veterans encounter when they take off that uniform for the last time."

Jake Wood is founder and CEO of Team Rubicon, a non-profit organization that utilizes the skills of military veterans to deploy disaster response teams to a variety of different humanitarian crises.

The US military provides some of the most advanced skill training in the world to its service members. Too often when these veterans leave the military, there are no smart ways to apply those skills. Team Rubicon has recruited over 750K veterans and responded to over 750 communities in crisis. Disaster zones provide a unique opportunity for veterans to use those skills for good around the world. "January 2010, the Haiti earthquake hit. It was the worst humanitarian crisis of the 21st century. Seeing all the chaos and destruction, it really looked familiar to me. I’d just gotten done with two really hard combat tours in Iraq and Afghanistan."

Suicide remains a crisis among veterans. A loss of purpose and community can play a major role in driving mental health issues and Team Rubicon goes a long way in filling that void. Working as part of a group allows many a chance to process some of their own unaddressed trauma. "One of the fastest growing demographics of volunteers at Team Rubicon are Vietnam Veterans. It's really amazing to see these men process the trauma of their wartime experience for the first time in 50 years."

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SPEAKER

Jake Wood.jpeg

Jake Wood

Co-Founder & CEO

Team Rubicon

MODERATOR

Anthony Scaramucci

Founder & Managing Partner

SkyBridge

EPISODE TRANSCRIPT

John Darsie: (00:07)
Hello everyone, and welcome back to SALT Talks. My name is John Darsie, I'm the managing director of SALT, which is a global thought leadership forum and networking platform at the intersection of finance, technology and public policy. SALT Talks are a digital interview series with leading investors, creators and thinkers. Our goal on SALT Talks is the same as our goal at our salt conference series, which our guest today has spoken at, I believe in 2015. But it's to provide a window into the mind of subject matter experts as well as provide a platform for what we think are big ideas that are shaping the future.

John Darsie: (00:44)
And we're very excited today to welcome Jake Wood to SALT Talks. Jake Wood is the co-founder and chief executive officer of Team Rubicon, a nonprofit organization that utilizes the skills of military veterans to deploy disaster response teams to a variety of different humanitarian crises. Under Wood's leadership, Team Rubicon has launched over 650 operations in response to natural disasters and humanitarian crises since the 2010 Haiti earthquake, and has grown from eight people to 120,000 members.

John Darsie: (01:18)
Team Rubicon has finished in the top three of the Nonprofit Times top non-profit to work for in America list three years in a row. Wood is a leading veteran's advocate who briefed president Obama on veterans issues, met with former presidents, Bush and Clinton, on disaster response, as well as has testified before Congress. As a Sergeant in the US Marine Corps, wood was deployed to Iraq and Afghanistan as a scout sniper and earned the Navy Marine commendation medal.

John Darsie: (01:48)
Hosting today's talk is Anthony Scaramucci, the founder and managing partner of SkyBridge Capital, a global alternative investment firm. Anthony is also the chairman of SALT. And with that, I'll turn it over to Anthony and Jake for the interview.

Jake Wood: (02:01)
Thanks, John.

Anthony Scaramucci: (02:02)
John, thank you. Jake, it was great to have you at the SALT Conference. I'm hoping and praying that we can get you back to a SALT Conference someday and we can end this virtual situation. We're going to make it happen. John's going to make an announcement here shortly about where he wants to put the SALT Conference. So I just want to comment on everybody's wardrobe. We know who the poorest person is on the podcast because I'm wearing the tie and these other two millennials, they're dressed like billionaires. So, we're going to leave it at that, Jake. You don't have to respond to it. I just needed to make that editorial statement.

Anthony Scaramucci: (02:40)
But first of, I want to thank you for your service. You're an amazing American, I've followed your career obviously since you came to SALT, and I've listened to many of your interviews. But for people that don't know Team Rubicon, Jake, or you, and John did a very good introduction of who you are, tell us about Team Rubicon. What is Team Rubicon?

Jake Wood: (03:02)
Yeah. So Team Rubicon or TR as like we refer to it is a nonprofit organization like John mentioned. And what we do is we recruit, train and deploy military veterans for disaster response and humanitarian work in humanitarian crises. And the concept is actually really simple. The US spends tens of billions, hundreds of billions of dollars a year training American citizens on the latest technology, the best equipment. They are giving them these incredible skillsets. And over the last two decades, these men and women had been deployed all around the world and some of the most austere environments and complex situations on the planet. And our concept is that we can build a better mouse trap when it comes to fighting the rising costs and impact of climate change and the increasing frequency of disasters by recruiting these men and women to repurpose their skills to respond to them.

Jake Wood: (03:55)
So we've done that at scale over the last decade. We've recruited nearly 150,000 military veterans into doing the work that we do. We've responded to over 750 communities impacted by disasters and crises ranging from tornadoes and hurricanes and floods to things like civil wars and plagues. And of course, over the last 12 months, our work has been focused on assisting with responses to COVID-19.

Anthony Scaramucci: (04:23)
Your name, the Rubicon was a river that Julius Caesar crossed, and it was an inflection point, which meant the end of the republic. And so, that was the beginning of the dictatorship and the end of the triumvirate that was holding the republic together. Why did you call Team Rubicon?

Jake Wood: (04:43)
Well, let's not invoke praises like the end of the republic given recent events. The name was no accident. When the organization was founded, it was not founded with the intent of starting a global humanitarian organization. I had just gotten out of the Marine Corps in late 2009. I'd been out for maybe 60 days. In January, 2010, the Haiti earthquake hit. I was watching that situation unfold, it was the worst humanitarian catastrophe of the 21st century. And seeing all the chaos and the destruction, it really just looked pretty familiar to me. I'd just gotten done with two really hard combat tours in Iraq and Afghanistan. I called up a couple of organizations, offered my services. They all understandably said no. And so I organized a team of veterans and some doctors to go down to Haiti. But you have to understand, we didn't know how we were going to be able to do that.

Jake Wood: (05:36)
And so, there were all these obstacles and challenges in the way of us being able to do that, but we knew that if we could get to the border, the Haitian-Dominican border and get across, that would be our Rubicon, that would be our point of no return. And so, we flew to the Dominican, we made our way to the border, we crossed the border about four days after the earthquake and made our way into Port-au-Prince. We referred to the team, and it was just a small team at the time, eight people, we referred to them as Team Rubicon.

Anthony Scaramucci: (06:05)
Well, I didn't want to invoke the end of the republic. [inaudible 00:06:09]

Jake Wood: (06:10)
Too soon. Too soon.

Anthony Scaramucci: (06:11)
And I have a tendency to be very shy and introverted related to my political points of view and my opinions of different political leaders, so, we're going to stick to Team Rubicon for this conversation, due to that shyness, Jake, due to the inhibitions that I have personally. What difficulties do veterans have transitioning back into civilian life? How do you address those issues?

Jake Wood: (06:40)
It's an important topic for me. There's an epidemic within the veteran space that is manifesting itself in the form of the highest suicide rate of nearly any demographic in the country. My unit has lost more men to suicide than we lost the enemy overseas, and understand that we served at the height of both wars and lost a lot of guys overseas. So it's tragic that we've lost more here at home to their own hand. When I think about what the root cause of that is, I don't focus on things like post-traumatic stress, I focus on things like the loss of purpose that veterans encounter when they take off the uniform for the last time. I think about that loss of community that they encounter when they leave that military base for the last time.

Jake Wood: (07:25)
And ironically, we were just talking about the threats to the republic, I think what we saw unfold on January 6th at the Capitol and in our subsequent understanding of just how many military war veterans were involved in that insurrection and are involved in right-wing extremist groups like the Oath Keepers, the Three Percenters, The Proud Boys, that military involvement I believe is also rooted in that loss of purpose and that desire for community. And so, Team Rubicon, we give those veterans a new mission, we restore that purpose and that community for them. But if you haven't discovered Team Rubicon, there's an appeal and an allure to an extremist group that gives you purpose, this purpose to fight and defend democracy as you see it, to be a part of something that is tight knit. And of course, that's a tragic application of purpose, but it's exactly what we're seeing.

Anthony Scaramucci: (08:22)
This again, this is my experience, when you're happy in your life and good things are happening to you and you feel aspirational where you can achieve some of your dreams, maybe some of it is related to your disposable income, maybe some of it is just related to the holistic parts of your life, you seem less engaged in issues like that. But when you're returning home from war and you are, as you pointed out, disengaged from your team or your battalion or your group, and the adrenaline is down, and the trauma or the memory of what happened is up, that's a recipe for a disaster. Is that fair to say, Jake?

Jake Wood: (09:01)
Yeah, I think it is fair to say. There's a challenge in processing those things. And I think one of the things that we've seen at Team Rubicon is, we send these men and women into disaster zones. And in a way, some people think, oh, that must trigger those traumatic experiences. Has that happened? Yeah. I mean, we've seen people who failed to cope with the scenes of disasters. But more often than not what it does is it provides people perspective, because what happens for many military veterans is they assume that the veteran community, the military community, has a monopoly on trauma. And of course, we know that's not the case. People experience trauma in their childhood, they experience trauma in their marriages, they experience trauma in all sorts of things.

Jake Wood: (09:45)
And when these veterans see the survivors of these crises and these disasters and they see the loss of life or they see the loss of property, they realize the trauma in human suffering is universal, and it helps provide perspective for them that aids in their ability to cope and heal.

Anthony Scaramucci: (10:05)
I think it's fascinating. One of the things I want to applaud you for is raising the awareness of all this. One of my uncles who I'm actually named after, my uncle, Anthony, was in Normandy beach on D-Day. Survived that, was subsequently wounded. When he came back, that generation was somewhat quiet about it. I think he never really recovered from the war and lived with post-traumatic stress his entire life. And so, tell us what you're doing at Team Rubicon to make those issues more aware. Obviously, you want family members to be more aware of these things. And making it acceptable. In the case of my uncle, it wasn't acceptable for him to talk about it culturally. I think you've done an amazing job of making it acceptable. Tell us steps that you've taken, tell us things that you've been doing to make that happen.

Jake Wood: (11:00)
It's a great question. We have certainly tried to provide a space for veterans to be safe, to feel safe about being open about their experiences. One of the amazing things about hard work, toiling together alongside people literally under the sun, sweating your ass off, breaking your back every day, which is what happens in these disaster zones, is it's got this unbelievable ability to bring people together and develop this inherent trust in sense of safety, psychological safety alongside these people who were just strangers two days before. We're very deliberate in providing people opportunities at the end of those days to share and open up about their experience. It might be their experience on that particular disaster response mission, it could be their experience from Iraq or Afghanistan years or decades before.

Jake Wood: (11:50)
And in some cases, one of the growing demographics that we have as a volunteer in Team Rubicon are Vietnam veterans. It's really amazing, to your point, to see these men, they're almost exclusively men, process the trauma of their war time experience for the first time in 50 years. And part of it is because they now have idle minds. They came home, they had careers, they're now leaving their careers and they're retiring. And now suddenly they don't have anything to stay busy, and they realize that, oh my God, in the quietness of this retirement, I have to for the first time really think about what happened in Da-Nang or Khe San or any of the battles that I fought. And so that's been really powerful to observe.

Anthony Scaramucci: (12:36)
I want to talk about your book, Once A Warrior: How One Veteran Found a New Mission Closer to Home. It's interesting, how business executives learned from the experience of military leaders like you to improve their companies. You incorporate elements of that in the book. You obviously told the story that you're telling right now. For SALT viewers and SALT listeners that haven't read the book yet, why should they read this book and what will they get out of it?

Jake Wood: (13:08)
I would hope that there's a couple of motivations. On the one hand, this is a great American story. It's a memoir, but it's not just my story, it's my story of going to war and coming home. But this is really indicative of the story of three million men and women who served overseas and are coming back and have the opportunity to serve their community and their country in new ways. And that's the story of Team Rubicon. It's also the story of how to process trauma. I mean, going back to your earlier question, I lost my best friend and my sniper partner to suicide in 2011. It was a tragedy in all the ways that your viewers right now could imagine. It took me years, years to process his death and to forgive myself for his death.

Jake Wood: (13:57)
on the other side of the coin, one of the people that reviewed the book was Chris Sacca, a fairly well-known angel investor. And his review was, you know how the best business books aren't business books, this is that book. Because this is really also the story of how I scaled one of the fastest growing non-profits in America in the shadow of the great recession, overcoming all of the natural challenges you can imagine building an organization that responds to disasters. There's a lot of uncertainty when it comes to building out a strategic plan when the nature of your business is responding to things you cannot predict. There are plenty of leadership lessons throughout it that people can pick up.

Anthony Scaramucci: (14:39)
Well, Chris is a leading innovator. I actually met him at Richard Branson's house in the Virgin Islands, which is a trip that I'm going to encourage you to take at some point in your career.

Jake Wood: (14:51)
Make that introduction for me.

Anthony Scaramucci: (14:53)
I will. John, remind me to do that. So, how can people support Team Rubicon? Where do they go to support your missions and to help you with the veterans that you're helping?

Jake Wood: (15:07)
We're easy to find. Our website, teamrubiconusa.org, across any of the social media platforms, we have a big voice. How can people help? There's a dozen things, more important to us than money but they all cost money. We're a nonprofit organization that runs entirely on philanthropy. We operate at a large scale. We run on a $15 million annual operating budget we have to raise every single year to assist these communities that would otherwise be forgotten in the aftermath of these storms. But beyond that, I imagine many of your viewers, they know someone in their life that could find value in the work that we do. We've got nearly 150,000 volunteers, but I can tell you, we're a couple hundred thousand short of where we need to be in order to continue to meet the need that we see across the country and around the world.

Jake Wood: (15:57)
So, whether it's that niece or that nephew or the cousin, the friend, the coworker that you know maybe served overseas in any war who might just be looking for that little extra something in their life. And even if that person's not a military veteran, we'll take anybody, we'll give them the training that they need, and we'll give them the opportunity to of service to their country.

Anthony Scaramucci: (16:19)
I think that's something I really want to emphasize to people, it's not just for military veterans. And I want to test the hypothesis on you and get your reaction to it. The world War II generation, you think about the draft and the inclusion of so many families in the military experience. And then you add this shared military experience, whether you're from New York or California, Dakota, Texas, once you were in the army or the marines, you could then have that bonding experience. Where were you, what battalion or division did you serve in, etc?

Anthony Scaramucci: (16:54)
And then we came out of that war, as a result of all of that military training, there was a level of civic virtue in the society that I think helped to transform the post-World war II society. Today Jake, you tell me, is it one and a half to 3% of our country is somehow tied to the nation's military. And so I'm wondering out loud, do we need to do more from a civic virtue perspective? Maybe the volunteer army is the right thing for the United States at this point, but do we need more compulsory service from our men and women the way the state of Israel does, or the way other people think about this to tie us together more closely and to make our union more perfect? What's your reaction to that?

Jake Wood: (17:42)
100% agree. And there are multiple reasons why this is important. One, you look at the state of our public discourse today, the inability of the factions across America to even understand or want to understand one another. Ultimately, what we lack today is empathy and compassion for our fellow Americans who have a different lot in life than we do. You can't have empathy or compassion for someone if you don't understand their perspective. You can't get their perspective if you've never left your bubble. Service helps transcend those bubbles, it brings people together in what is the most perfect melting pot that America ever created, which was I believe military service. We've seen that play out.

Jake Wood: (18:29)
So, there's that issue. But this is I believe actually a slow burning national security threat. We have an all-volunteer force today that has largely become a family affair. The vast majority of people who are joining the military today are coming from a lineage of military veterans. The challenge is that the military veterans of today poll after poll after poll are stating that they are not going to encourage their children to join the military. So we're actually going to have a pretty large recruiting crisis that's looming on the horizon.

Jake Wood: (19:07)
That is coupled with the fact that when you create almost this warrior caste where 1% of Americans serve becomes a family affair, they become disconnected from the rest of society. And it becomes much easier for the rest of our republic to send those men and women off to war because there's no cost to the rest of America. It's not their son or daughter that they're sending off. And so we find ourselves embroiled in conflicts that are poorly planned, no exit strategy. And we find ourselves there for decades upon decades. And that's not sustainable.

Anthony Scaramucci: (19:48)
I have to turn it over to the resident, millennial, Jake, otherwise, I can't get the ratings because I'm this aging white male, I'm heading deep into my middle age now.

John Darsie: (20:00)
As opposed to me.

Anthony Scaramucci: (20:02)
I don't know if I have the attraction of these young youthful looking millennials. I have to turn it over to this guy. It's a little horrifying for me. But go ahead, Darsie. I know you're dying to ask Jake all these brilliant scintillating questions. Jake, you know what's also horrifying, since you're cheaper than my therapist, this guy gets fan mail. [inaudible 00:20:23] it's unbelievable. Go ahead.

John Darsie: (20:26)
It's a big point of contention, Jake. I got I think one email that somebody said that I did a good job and it hurt Anthony's ego.

Anthony Scaramucci: (20:34)
It was bruising. It was bruising. There's no euphemism to describe the pain, but go ahead. Go ahead.

John Darsie: (20:42)
I think your point about service and bipartisanship is very well taken, Jake. I frequently give my friend, Rye Barcott, a shout out on here for his organization With Honor, who you're likely familiar with. It's a pact that they basically encourage military members to run for office. While giving them funding, they forced those candidates to sign basically non-binding contracts to commit to bipartisanship. And naturally, there's just more of a comradery among those members across the aisle in terms of solving problems as opposed to looking at things through a partisan lens. So, I think that point is extremely well-taken, and we love what you do at team Rubicon and what Rye is doing at With Honor. And hopefully every time we shout out these organizations, hopefully members of our community step up and contribute to the cause.

John Darsie: (21:28)
I want to ask you about the COVID-19 pandemic. So you guys have responded to a variety of different types of humanitarian crises. How has the COVID-19 pandemic been unique and what does your response look like at Team Rubicon?

Jake Wood: (21:41)
This has been unique in immeasurable ways. Too many to enumerate. But to put it in perspective, back in March or April when this thing was first [inaudible 00:21:55] in the US, it was the first time in American history that all 50 states plus US territories were under an emergency declaration simultaneously. It was simply the scale, the breadth and depth of this crisis that was nearly impossible to overcome. Our organization pivoted very aggressively and early into the fight. We said early that we didn't have a playbook for a global pandemic, but we had the players going back to our philosophy on, our human capital strategy is based on recruiting these men and women who do chaos for their day job. And so, we, over the last year have done a variety of things. We searched over 10,000 volunteers in the food banks across the country to help sustain their operations in the face of growing food insecurity.

Jake Wood: (22:40)
Perhaps on the more complex side, we deployed hundreds of medics in the Navajo nation, where over the last several months we've treated 5,000 COVID positive patients. We established dozens of mobile testing sites for COVID-19 throughout the western US. We managed all the collection distribution of personal protective equipment for the city of Chicago. Over 330 American communities requested our assistance in the aftermath of COVID and we responded to over 300 of them with operations.

Jake Wood: (23:12)
Right now, our entire focus is on getting our organization into the vaccine space. We've been operating a dozen pilot programs in states across the US, supporting the logistics and wraparound services that are necessary for effective vaccination programs and delivery. And we anticipate rolling that out and expanding it and scaling it to several hundred communities here in the coming months. We're actively raising a fund right now to do that. Might as well make the pitch now. We're raising an initial $5 million to get it off the ground and $30 million to take it to scale and sustain it through October, which is really the point at which we'll think that our chief medical officer believes we'll hit the point of community immunity. Of course, all of that is dictated by pace.

John Darsie: (24:07)
And people can find information to donate to that fund on your website?

Jake Wood: (24:11)
People can find out about that on our website. We're about to launch a veteran's coalition for vaccination, which will bring about six other organizations focused on veterans under a tent that we will be managing. Of course, they can reach out to you with some fan mail and you can put them directly in contact with me and I'd love to have a conversation with them about it.

John Darsie: (24:33)
All right. I would ask you how we could have improved our response to the pandemic at a federal level, but I think that would take an extra 30, 45 minutes for us to get into.

Jake Wood: (24:43)
Talk about needing a therapist. I need to talk to a therapist about that myself, but yes, we would take much time.

John Darsie: (24:52)
We will leave it there. Thank you so much, Jake, for joining us. We always love having Team Rubicon affiliated with SALT. It's a tremendous organization and you have scaled it in a way that it's extremely impressive and you're really solving two problems. You're addressing these critical issues around the world and in the United States, while also helping military veterans transition back into civilian life and cope with those mental health issues and loss of purpose that you talked about. So thank you so much for everything you do.

Jake Wood: (25:20)
Yeah, John, Anthony, thank you for having me.

Anthony Scaramucci: (25:22)
Jake, tell us one more time where we can send money. Where do people go?

Jake Wood: (25:27)
Please visit us at teamrubiconusa.org. You can find out all the information right there. Love to have you.

John Darsie: (25:32)
And buy his book too. It's a tremendous memoir. Once a Warrior is the name of it. It's a tremendous memoir talking about a lot of these issues that we spoke about today, that loss of purpose and how veterans are uniquely suited to solve these humanitarian crises that exist around the world. So we encourage you to buy that book. Thanks again, Jake.

Anthony Scaramucci: (25:50)
Jake, I hope to see you at a SALT event soon.

Jake Wood: (25:55)
I check my mailbox every day for the invite, Anthony.

Anthony Scaramucci: (25:58)
We're going to gear up the fundraising and the SALT event soon. We appreciate all your work, you're a great American patriot. Thank you for all the things you're doing for our country and the world.

Jake Wood: (26:07)
Thank you, Anthony.

John Darsie: (26:09)
And thank you everybody who tuned into today's SALT Talk, especially if you are now going to the Team Rubicon website and donating to the cause. Just a reminder, if you missed any part of this episode or any of our previous episodes, you can see the entire SALT Talks archive at salt.org/talks/archive, and you can sign up for all of our upcoming talks at salt.org/talks. A reminder, please follow us on social media and tell your friends about SALT Talks. We love growing our community and spreading the word about great causes like Team Rubicon. We're on Twitter, we're on Facebook, we're on Instagram, LinkedIn.

Anthony Scaramucci: (26:41)
Don't send any more fan mail to John Darsie.

John Darsie: (26:43)
Send all fan mail to, I'm not going to read your email out, but send all your fan mail to Anthony's email so he gets it and can treasure it. On behalf of the entire SALT Team and Anthony, this is John Darsie signing off from SALT Talks for today. We'll see you back here again tomorrow.

Michael Chertoff: How Election Security Has Become a Top Issue | SALT Talks #147

“It turned out that there was very little interference with the actual voting process... It went remarkably smoothly."

This is the first episode in a three episode SALT Talks series focused on elections security. Michael Chertoff was the Secretary of the US Department of Homeland Security from 2005 to 2009 where he led the country in blocking would-be terrorists and transformed FEMA following Hurricane Katrina.

Elections security became a greater focus as the Internet became more integrated with voting systems. One of the most effective safeguards against a mass breach of voting systems is the distributed and decentralized nature of elections. The nature of election concerns have evolved greatly to include potential domestic terrorism and foreign government disinformation. “There was actually very little interference with registration databases or the voting process itself."

The real issues turned out be after the election, culminating in the violent mob seeking to block congress’ certification of the election results. This was due to sustained misinformation propagated by then President Trump, his allies and conservative media outlets. The irresponsibility displayed should and could likely lead to successful legal action. “Frankly, I understand why these companies (like Dominion) are suing. They’re basically saying, ‘put your money where your mouth is.’ There needs to be accountability.”

LISTEN AND SUBSCRIBE

SPEAKER

Secretary Michael Chertoff.jpeg

Michael Chertoff

Secretary of the U.S. Department of Homeland Security

(2005-2009)

MODERATOR

Anthony Scaramucci

Founder & Managing Partner

SkyBridge

EPISODE TRANSCRIPT

Michael Oren: Foreign Policy & US-Israel Relationship | SALT Talks #140

“The new Abraham Accords have totally changed the paradigm. It’s normalization first, peace will come later.”

Michael Oren was a former member of the Knesset, a former deputy minister in the Israel prime minister’s office and was Israel’s ambassador to the United States (2009-2013).

The US-Israel relationship is the most special among all of the United States’ allies. This is due to three pillars: democratic values, defense, and the spiritual connection. The recent Abraham Accords represent a major breakthrough in the Middle East peace process and overturned the conventional wisdom. It was thought peace between Israel and Palestine needed to occur before any normalization with the broader Arab world took place. Now, Israel has agreements with countries like the UAE, Bahrain, Sudan and Morocco. “These Arab countries remain committed to a resolution of the Palestinian problem, but they weren’t going to wait anymore.”

Formal normalization between Israel and Saudi Arabia is one of the biggest goals in the peace process. Saudi Arabia holds significant influence in the Arab world as custodians of Mecca and Medina. Israel and Saudi Arabia share strategic interests in their desire to act as checks against Iran.

LISTEN AND SUBSCRIBE

SPEAKER

Ambassador Michael Oren.jpeg

Michael Oren

Israeli Ambassador to the United States

(2009-2013)

MODERATOR

Anthony Scaramucci

Founder & Managing Partner

SkyBridge

EPISODE TRANSCRIPT

John Darsie: (00:07)
Hello everyone. And welcome back to SALT Talks. My name is John Darsie. I'm the managing director of SALT, which is a global thought leadership forum and networking platform at the intersection of finance technology and public policy. SALT Talks are a digital interview series with leading investors, creators, and thinkers. And our goal on SALT Talks is the same as our goal at our SALT conferences, which is to provide a window into the mind of subject matter experts, as well as provide a platform for what we think are big ideas that are shaping the future.

John Darsie: (00:39)
And we're very excited today to welcome ambassador Michael Oren to SALT Talks. Ambassador Michael Oren has devoted his life to serving Israel and the Jewish people around the world. As a member of Knesset and deputy minister and the prime minister's office, he has interacted with foreign leaders and defendant Israel in the media. He spearheaded efforts to strengthen the Israel diaspora relations to develop the Golan Heights and to fight BDS. As chairman of a classified sub-committee, he dealt with some of Israel's most sensitive security issues.

John Darsie: (01:11)
Prior to that for nearly five years, ambassador Oren served as Israel's ambassador to the United States. He was instrumental in obtaining US defense aid, especially for the iron dome system and American loan guarantees for Israel's economy, which is absolutely booming. A graduate of Princeton and Columbia, Dr. Oren was a visiting professor at Harvard, Yale, and Georgetown. He holds four honorary doctorates and was awarded the statesman of the year metal by the Washington Institute for near East policy and the Dr. Martin Luther King legacy prize for international service.

John Darsie: (01:46)
His last three books, Six Days of War, Power, Faith, and Fantasy, and Ally: My Journey Across the American-Israeli Divide, where all New York times bestsellers. He received the LA Times history book of the year award and national humanities prize and the Jewish book award. Hosting today's talk is Anthony Scaramucci, the founder and managing partner of SkyBridge Capital, a global alternative investment firm. He's also the chairman of SALT. And without further ado, I'll turn it over to Anthony for the interview.

Anthony Scaramucci: (02:18)
Well ambassador thank you so much for joining us today on SALT Talks. I start these things the same way, I ask people, what is it about you that we can't find on your Wikipedia page? And I know you grew up in the United States, tell us something about your upbringing that led you to this career org.

Michael Oren: (02:39)
I started off as a writer, Anthony. First of all, it's great to be with you. Thank you, John, for that very warm introduction. I started off as a poet and a playwright and a screenwriter. When I was 17 years old, I won the National PBS Young Filmmakers festival, first prize. And with the short film, I went off to Hollywood and I became Orson Welles production assistants. Those of you who are watching the film, [inaudible 00:03:05], it hits home. [inaudible 00:03:08] is my third work of fiction. It's a collection of short stories called the Knight Archer and other stories. And I have a novel, To All Who Call In Truth, is coming out in May.

Anthony Scaramucci: (03:20)
Congratulations. How did you shift from that to the world of diplomacy and international relations and geopolitics?

Michael Oren: (03:29)
Well, it's never really shifted. It's always been there, but I must say that being a writer is a great tool for diplomacy. It enables you to understand people, to understand situations and it makes you hopefully more articulate and putting together your ideas and getting across sometimes very difficult interviews or difficult audiences. The audiences, as you know, Anthony have gotten more difficult over the years. And so the writing part of it is a great tool.

Anthony Scaramucci: (03:58)
Well, listen, the audiences have gotten more difficult for me, but John Dorsey for some reason gets fan mail as a result of these SALT Talks, ambassador. So it's a point of contention between me and my therapist. I just wanted to point that out to you. Let me jump right into it though, the US-Israel relationship, if you had to characterize the state of that relationship today, how would you make that characterization.

Michael Oren: (04:25)
Depends on which field. The US-Israel relation is a very special relationship. It is actually more special even than the US-France, US-Italian. Perhaps even the US-British relationship, because it has three pillars. One is obviously the shared Democrat value. For all the challenges of these values are going through right now with the different interpretations.

Michael Oren: (04:46)
The fact of the matter is, we've never known in Israel, [inaudible 00:04:48] second of non democratic governance, is one of the few countries in the world like that, maybe five in the whole entire planet. And we have elections, we have too many elections as you know. And an independent judiciary and an independent press and all the basic rights of assembly and free speech. And that's in the middle East, but even generally in the world, that's become a rarity. So that's a very strong pillar.

Michael Oren: (05:11)
The other pillar is the defense pillar. And here I say on equivocally that the US-Israel strategic Alliance is the deepest and most multi-facets that the United States has had with any other foreign power in the post-World War II period, because it encompasses so many different areas. It's intelligence sharing at the highest possible level, its weapons development. You mentioned iron dome jobs. I brought the funding from iron dome, but that is one of a triple tier missile defense system, which the United States uses.

Michael Oren: (05:42)
Israel is developing, America's future battle tank Israel is developing, every gun on every destroyer in the US Navy carries, every restorative gun, every American fighter pilots get this one. Whether it's a fixed win or helicopter pilot, every American fighter pilot [inaudible 00:05:58] is rarely made helmet. So it's special forces training, all of that is in the defense relationship. But there's another aspect of it, which I think is missing from say the US-Italian or the US-French relationship is the spiritual connection.

Michael Oren: (06:12)
Because America was and remains a religious country. And more people go to church in the United States still than any country is certainly in the West. People read their Bible and God promises the Jewish people, this land. And a lot of Americans say that very, very seriously. And so the spiritual tie, is very, very deep. And I encountered that all the time in Washington, both on the democratic and Republican side. And so it makes for a very strong bond. It doesn't mean we don't have differences. We've had some rather large differences in recent years.

Anthony Scaramucci: (06:47)
When you characterize iron dome, I just want to just relay it to people that have not been to Israel and just want to see what iron dome is effectively. Israel has being assaulted by projectiles from the North and from the South, from the Gaza strip. And again, correct me if I'm wrong, but it's something like, 10,000 a year. Is that wrong? What's the number of projectiles that are entering Israel?

Michael Oren: (07:12)
Well, it's gone down. There has been days. During one war, I was in military for about 35 years. And then a couple of wars when we were hit by thousands of rockets. The iron dome again, is this triple tiered system. The iron dome takes out projectiles that go up in the air and come down. It's not a standoff rockets. And, the US army buys them for the Korean border, for example. Because the North Koreans use mortars and short range rockets that can be taken out by iron dome. And it's the only anti-ballistic system of that nature that has been proven effective in combat in history. It's very difficult.

Michael Oren: (07:46)
For many years, it took the West to figure out how to take down like a V1 or V2, rocket, very difficult, getting two bullets to meet in the air. The second is David's Sling. And David's Sling is a US-Israel project that can intercept a cruise missile, not a missile that goes up and down, but a missile that can be guided by a joystick, very sophisticated. And the third level is the arrow system, which is a missile that takes out an intercontinental ballistic missile. An ICBM that exits the US, the atmosphere and comes down through the atmosphere. Our [inaudible 00:08:21] rocket takes out that missile in the outer space.

Anthony Scaramucci: (08:26)
And the reason why this is so important is that you've protected the land of Israel, by knocking out 90 plus percent of these projectiles. I was in a beautiful town in the South of Israel. Unfortunately, I can't remember the name of it, you'll remember, but they took the case and rockets, and they turned it into a menorah on top of the [crosstalk 00:08:49]. And I met with the mayor [inaudible 00:08:54] as well.

Anthony Scaramucci: (08:55)
And I was very impressed with the way they were living their lives under that threat, but also recognizing that they were going to live a very wholesome and full life despite the threat of terrorism. And it was enormously impressive to me. And the reason I'm bringing all this up is it speaks to the Israeli culture. And so country's doing very well right now. Tell us what some of the elements are of the Israeli culture that's allowing for this type of success.

Michael Oren: (09:26)
Well are a highly diverse culture. People look at Israel [inaudible 00:09:31] people who more or less look like me, maybe they have a little bit darker hair. But the fact of the matter is Israel is, Israel is majority non Western country. A majority of Jews here are from the East, from Arab countries, from North Africa, from Iran and Iraq. There are Ethiopian Jews, Africans, several hundred thousand African Jews. 21% of the population is Arab, mostly Muslim, but also Christians, [inaudible 00:10:00].

Michael Oren: (10:02)
It is racially, religiously, culturally diverse country. What all holds it together. A couple of things. The democracy is very important here. Democracy is, is not necessarily an end in itself here. It's also a means to social cohesion. It's a way in which all of these disparate ideologies and backgrounds can get together and scream at each other. And I've been in Knesset, it reaches some very loud decibels there. And blow off steam. And we can reach [inaudible 00:10:33] polarization here. So the greed that has plagued the United States.

Michael Oren: (10:39)
It is a traditional society. It's a society that manages to balance majernity, technology innovation with tradition. Over 80% of population is traditional, which is very high and going up, not going down in contrast to United States and elsewhere in the West. And it's a family country. And I think the family values here are very strong. And with the United States and the West, it's also important part of our relationship with the East. When you ever have Eastern visitors, and I did a lot of work at the prime minister's office with Korea, South Korea, with Japan and other Eastern countries. They always point to the fact that what we share is our family values. And it really holds it together. Great premium on innovation. We're regularly listed the most innovative country in the world, with per capita, more startups [inaudible 00:11:34] about 250 international high-tech companies have at least one in our R&D center here. A company like Microsoft, or Intel has four R&D centers here.

Anthony Scaramucci: (11:49)
I should shift gears abruptly to talking about the Abraham accords. And again, for our viewers, the Israelis are normalizing relationships with countries like the UAE, Bahrain, I believe Morocco. Tell me what other countries you've signed these normalization treaties. With Michael.

Michael Oren: (12:10)
Well, Abraham accords are the [inaudible 00:12:14] name for the recent peace agreement between Israel, Bahrain, United Arab Emirates. Now the Sudan is signed on and a huge breakthrough in the peace treaty between Israel and Morocco, the largest and most influential North African country. These accords have totally overturned and appended all of our assumptions about peace process. The assumption that was running in the United States and Europe was that first, you had to have peace between Israel and the Palestinians, and only then you'd have peace between Israel and the Arab world.

Michael Oren: (12:45)
And to get peace with the Palestinians you had to create a Palestinian [inaudible 00:12:47] state, you had a re divide Jerusalem. You had to uproot a lot of Israelis who live in what we call the Judea and Sumeria, the West bank. None of that proves to be true. We have these treaties. These Arab countries remain committed to a resolution of the Palestinian problem that they weren't going to wait anymore. We're going to [inaudible 00:13:07]. And, these accords also overturn the notion that first you make a peace agreement between an Israeli leader and an Arab leader, and then later on normalization seeps in.

Michael Oren: (13:21)
So that was the paradigm of the peace accord between Egypt and Israel. The peace accord between Israel and Jordan. These are now over 40 years old, these agreements. And we have peace between Egypt and Israel, and we have peace with Jordan, but we don't really have peace with the Egyptian people. I think we have peace with their leaders. The new Abraham Accords have created a completely different paradigm. It's normalization first, peace will come later. And we have peace with the Bahrain people, but with the Amarati people, with the Moroccan people. We have dozens of flights now flying to them per week. And I think that any future, a peace arrangement between Israel and Arab States will resemble the Abraham Accords and not the Camp David Accords that were signed by Jimmy Carter and Anwar Sadat [inaudible 00:14:09].

Anthony Scaramucci: (14:10)
It's an obvious question, but I'd like to get your longterm view of this. So, close on Saudi, are you allowed to talk about it, closer than some of the other Arab nations? Where do you think you are?

Michael Oren: (14:26)
I think that the next in line would be a country like Oman. I wouldn't rule out the Kuwaitis at this point. But the size of course is the Juul and the crown, because the Saudis have such a such influence throughout the entire world and part of the entire Muslim world because they are the custodians of the two holiest cities, Islam, Mecca Medina. And that also puts a check on some of their decision-making vis-a-vis Israel and we understand that. But there are many steps that the Saudis can do, and I believe they will do in the coming years, particularly if the Abraham Accords, proved to be both strategically and financially valuable.

Michael Oren: (15:04)
And there's change magically, Anthony is that these very countries that used to look at Israel as an enemy now understand that Israel is an ally that we share the same strategic interest in standing up to Iran. We also serve as a bulwark against Turkey. These Sunni Arab countries are afraid of Sunni Turkey because Turkey backs Islamic extremists like Hamas. So they're literally between a rock and a hard place we're here. And this the more sensitive part of my answer is, we're looking at a period of withdrawal of isolationism.

Michael Oren: (15:38)
It began under Obama. It's certainly continued under Trump. I don't think it's going to change much under Biden. The American people are looking inward not outward. They're trying to figure out how to best police themselves rather than try to have a best would be the policeman of the world. And as America pulls out, geopolitics takes a vacuum like nature. That's going to show up.

Michael Oren: (15:59)
It's going to fill up with Russians. It's going to fill up with Turks. It's going to fill up with Iranians, the Saudis, the Bahrains, the Arab world. [inaudible 00:16:06] They are the power that's going to stand up for this region. And I guess radicalism and Iranian hegemony.

Anthony Scaramucci: (16:17)
I travel throughout the region. It blows me away, ambassador, how much everybody in the region has in common with each other. And of course, I love the name Abraham Accords, because it's about the father Abraham and the seven tribes. And basically everybody's all brothers. And so, it's a warm way to provide the connectability, but what are the risks. When you step back and say, okay, there's been possibly 60, 70 years, let's call it from the founding of Israel. 72, 73 years ago. There's been this stress intention in the area. What are the risks that you're worried about?

Michael Oren: (16:59)
Well, specifically, it'd be the outbreak of another round of fighting between Israel and Hamas, which is the Palestinian radical organization that controls Gaza. And we've had several boards [inaudible 00:17:10], an outbreak of war between Israel and Hezbollah in Southern Lebanon. Hezbollah being a puppet terrorist organization, in the PEI control of Iran. [inaudible 00:17:23] these wars, both of these terrorist groups will be fighting in densely populated civilian areas. And there'll be a high degree of collateral damage.

Michael Oren: (17:31)
I'll give you an example. You mentioned that the rockets early Anthony, Hezbollah has planted 130,000 rockets, all aimed right here, right at our neighborhoods, right at our schools and under 200 Southern Lebanese villages. And in order to get at those rocket launches, our armies are going to have to go into those villages, going to have to go into those homes. And Hezbollah is going to keep the civilians in there cause they want us to kill the civilians cause it will de-legitimize us and it will complicate our relationships with the Arab countries. So those could be very disruptive.

Michael Oren: (18:04)
Frankly, Israel should exercise restraint in undertaking unilateral moves in [inaudible 00:18:11], whether the next government will the next part of Judah and Samaria. I'm not in government currently, but I would advise against it. I think our interest right now is innate. Is it allowing the Abraham Accords to sprout roots, to settle in and become a permanent reality. And at least, we shouldn't rock that situation too much. The last great threat would be Iran. And here, it's complex. There's a big question whether the United States will rejoin that the Iranian nuclear deal of 2015, the so-called JCPOA. If that's true, Iran will receive once again, not tens of hundreds of billions of dollars.

Michael Oren: (18:46)
They won't spend that money on schools and hospitals believe me, it's on more missiles, it's more terror, more conquests. And that could put tremendous strains on this alliance. We don't know the degree to which the next administration will back these new alliances. Remember they quite naturally, any administration doesn't want to give too much credit to the previous administration, especially given the political atmosphere in the United States right now. But we hope that the United States will continue to encourage Abraham Accords. And I hope that this next administration will think not once, but three times before rejoining the Iranian nuclear deal.

Anthony Scaramucci: (19:19)
Okay. But we both know because we're both realists and president elect Biden has signaled that he wants to re-engage Iran. And so we're both realists about that. And so if that were to happen, you just mentioned several of the things that are risks on the table for Israel and the Saudi Peninsula and the countries they're in. What do you recommend, let's say that you were the czar, let's say when you got put in charge of the peace for the entire area, and you had five minutes with the vice-president elect, what would your message be to him?

Michael Oren: (19:57)
I've had a lot of five minutes with the president elect. He's great. And that is this, in 2015 and during the period of that accord, those negotiations began in 2012 and they were negotiated behind our back. In fact, we were [inaudible 00:20:13] to on a daily basis negotiations. And this is about an agreement which impacts every man, woman, and child in this country and every man, one child in the middle East. And the fact that the very people who are most impacted and most to lose from this agreement were never even consulted about, it's quite astonishing. There's been much talk about how America betrayed allies in the recent years, this was actually a bonified betrayal and was quite, quite dangerous.

Michael Oren: (20:37)
So I would urge the president elect not to, to try to rectify that historic era and justice and try to restore trust, very important. And to understand that the JCPOA does not block the path of bomb, it actually paves Iran's paths of the bomb. That is the opinion not just in these Israelis, it's the opinion of all our Arab neighbors. Listen to us, listen to what we are saying. And we will have an idea of what a good deal would look like. A very specific idea what would look like. Just listen to us.

Anthony Scaramucci: (21:12)
Last year, John and I hosted an event in Abu Dhabi. We made history at that event, actually. We had the first Israeli venture capitalists come to Abu Dhabi and speak on a stage publicly at an event in Abu Dhabi. General Jim Jones, somebody I know that you know, the former national security advisor for president Obama came to the event with us. And he said something that I'd like to get your reaction to. He said that he felt that the Iranian regime was going to not exist inside of five years. Do you think that that is true? How stable is that regime?

Michael Oren: (21:53)
It broke up, you said it won't be in existence in [crosstalk 00:21:56].

Anthony Scaramucci: (21:57)
General Jones was saying that the Iranian regime will not be an existence inside of five years. And, I was wondering what your reaction is to that and how stable is that regime?

Michael Oren: (22:09)
Well, the first reaction is I've heard the same predictions since 1979, and it hasn't happened.

Anthony Scaramucci: (22:15)
Fair enough.

Michael Oren: (22:16)
It hasn't happened. And now it's even less likely than four because Iran regime had a dry run for the Arab spring. It was the green revolution of June, 2009. And the Iranians learned how to put down a revolution. And they not only develop the technological means, you put something untoward on your Facebook and you're going to get a knock on the door within a minute and you're going to disappear.

Michael Oren: (22:41)
But they've developed a million man force. It's called the besiege. These are thugs. And they will go out as a demonstration. They're going to go out and beat your head in, or if they have to use firearms. And this recent roundup of protest, peaceful protest in Iran, hundreds of civilians, unarmed civilians were shot down. They're not fooling around. So this is a regime that right now internally, there's no power that can overthrow it, zero.

Anthony Scaramucci: (23:11)
Well, I have one last question then I have to turn it over to the millennial, Michael, which pains me. Because, the guy's got just [crosstalk 00:23:19] coming in and, I think he's going to start getting those portraits of himself that he signs and sends out the people, which is even more revolting. But, I want to talk about the Six Days of War, June of 1967 and the Making of the Modern Middle East, which is a book that I read. I also read Power, Faith, and Fantasy.

Anthony Scaramucci: (23:41)
And that's why I was so delighted to get the opportunity to meet you in the King David Hotel, when I was in Jerusalem a few years ago. But in the book, you talk about how that war and the victory effectively for the Israelis in that war has set up what we're living with today, 50 plus years later. I'm just wondering if you were writing a book about the Six Days of War today, the things that you wrote in that book, are they still true? Have some things changed? How would you characterize Israel in terms of its development? If you were writing a history of Israel right now, obviously David Ben-Gurion the origination of Israel, the help from Harry Truman, et cetera, the Six Day of War, the Yom Kippur war and where we are today. How would you weave the whole history for us today?

Michael Oren: (24:38)
The Six Day of War was instrumental in setting the map of the middle East. It represented the high watermark of secular Arab nationalism and ushered in the era of Islamic extremism, which has proved to be so profound in shaping the [inaudible 00:24:56] in recent years, the ISIS is a direct result of that. It bent the slow decay, the slow decline of Egypt as the ultimate regional power. And we've seen how that's played out. And the six day of war brought the Russians into the middle East very deeply. And we've seen that the Russians aren't leading so fast. The question is how long America is going to stay around now`. Six war gave birth to the US Israel strategic relationship, which I talked about earlier. It did not exist.

Michael Oren: (25:26)
Israel fought that war without a single American bullet. We had French arms then, no Americans. Amazing. And the [inaudible 00:25:33] brought to the fore, I think the ability to make peace because Israel had what to trade for peace, the territory for peace. It proved to the Arab world that even with all the Arab armies masked on our borders, they weren't going to destroy us. They're going to have to somehow come to grips with the reality, and that has happened.

Michael Oren: (25:51)
And interestingly enough, the six day war provided the opportunity for peace with the Palestinians. And these are the counter intuitive interpretation of the war, because you have to go back to [inaudible 00:26:05] was Anthony, no one talked about Palestinian statehood, no one talked about the Palestinian people back then. It was the Arabs versus Israel, not the Palestinians. And the fact that the Palestinians now have an in Kuwait government, in the West bank, Palestinian authority exercises a certain degree of autonomy. It has elections if they ever wanted to hold them, provides the possibility, the possibility I stress, for the realization of some type of Palestinian autonomy. And still after all we've been [inaudible 00:26:37].

Anthony Scaramucci: (26:39)
John, I'm going to turn it over to you. I'm going to let you ask some of these questions that have come in from our audience. Ambassador, this has been incredibly enjoyable for me. It's now going to get painful for me. It's now going to get painful for me as Darsie out shines me, but it's okay. Go ahead, John. I'm ready. I'm ready.

John Darsie: (26:55)
Everyone loves your shtick.

Michael Oren: (26:57)
Hi John.

John Darsie: (26:58)
Ambassador Oren, I want to talk about what you alluded to earlier is that the United States is turning inward and we're having to focus more on policing ourselves. And we are policing the rest of the world. You're an American and you were an American citizen, but as someone who lives outside of the United States and view things through that lens, how does the rest of the world view the current unrest and divisions that exist in the United States?

Michael Oren: (27:24)
With growing sadness and concern. And [inaudible 00:27:30] world, we used to be called the free world. Remember that term, does it sound antiquated today to your generation? That was predicated on America's willingness and ability to project power. When I was a young paratrooper participating in the battle for Beirut in 1982, we in the Israeli army, we knew if we got into a scrap that the president Reagan would sending the marines and get us out. And that's just what he did. They sent the battleship New Jersey. When it was battleships back then. The president Bush in 2003, back in 1991 earlier, in the first Iraq war United States sent armies of 500,000 men to the middle East. That's not going to happen now.

Michael Oren: (28:15)
And so for those of us, for whom we view our security is very much attached to that possibility, that ability, that willingness of the United States to project power, this was a sea change for us. And we've had to do some scrambling. We mentioned the Abraham [inaudible 00:28:32] on one level by a common recognition that we cannot rely on the United States the way we used to rely on the United States. America is still our ultimate ally, still shares our values, still has a strategic Alliance with us. But again, the Marines aren't coming that fast, true?

John Darsie: (28:47)
Right.

Michael Oren: (28:47)
And that's a big difference, especially since we got the Russians. I did a lot of missions abroad during my term in office. I went to a mission to the Baltic countries, and they would complain that they had the Russian army two kilometers away from them. I said, "Guys, I got, I got the Russian army 20 meters away. What are you talking about? You think you've got problems." So that's our reality here.

John Darsie: (29:13)
In general, are you a believer in this idea of peace through strength? There's a lot of people who believe that appeasement in areas like the middle East and around the world, if you pull back and you create that vacuum of power, your ability to be the hedge Amman that dictates global peace receives, are you a believer in that philosophy?

Michael Oren: (29:32)
Apparently it's true. I read an article recently in national interest that actually is told us that the end of engagement and talked about how engagement has become the sacred notion almost engagement at every cost. But if you look historically and I'm going back to ancient history, engagement almost never works. Unless it's backed up by significant force, then it works. And we have to be extremely cautious about this. Every country, by the way. And it's the right and the last Republicans and Democrats, everyone's falling into this. We engaged with Yasser Arafat thinking that by engaging with him. He was going to become a peacemaker.

Michael Oren: (30:10)
And he remained to this dying day, a terrorist that died in the world, terrorist. It wasn't going to happen. And we paid very big prices for this. Now that doesn't mean, I don't believe in diplomacy. Diplomacy is a great tool but it's got to be backed up by more than just goodwill.

John Darsie: (30:27)
Anthony asked you the question earlier about what advice you would give to president elect Biden on restoring trust with Israel and in the region after what you believe was the mist up of the Iran deal. What are your expectations for what the, Biden administration is going to look like in terms of its approach to middle East peace and relations throughout the middle East secretary of state, Anthony Blinken is very influential and Biden administration's foreign policy. So what do you expect from the Biden administration in that regard?

Michael Oren: (31:00)
Well, I've been privileged to know all the people now that he has appointed. Bill Burns now is the head of the CIA. The deputy secretary of state, as well as the secretary of state, the deputy national security advisor, as well as security [inaudible 00:31:11]. And I will tell you that every single one of them to the person is deeply committed to the US Israel Alliance and committed to Israel security. Now, again, I'll say that doesn't mean we have disagreements. We're going to have disagreements about the Iran deal, particularly the Iran deal. We will have disagreements about the Palestinian issue, which is not going to be that pressing as it was during the Obama years. I think that the president elect Biden is less ideologically than Obama was on that issue, but we will have disagreements about it.

Michael Oren: (31:40)
And a lot of it depends on what the Palestinians decided to do. If the Palestinian decides to rejoin negotiations, then we'll be put in a possibly more combustible relationship with this administration. But generally speaking, I don't see any major policy changes in terms of projecting power. There'll be a tremendous aversion to getting embroiled again in any middle Eastern fight, any overseas, engagement militarily. And I think this administration is going to have its hands more than full, with what's going on in the United States.

Michael Oren: (32:17)
Beginning with the COVID crisis, the economic crisis, political polarization, and potentially even outbreaks of violence in the United States. People aren't going to be thinking about the middle East first and foremost, and maybe not even in a tertiary fashion.

John Darsie: (32:30)
So let's talk about Israel's response to the pandemic, which you alluded to, which I think generally has been very good. And especially the vaccine rollout you mentioned, I think before we went live that you're getting your second vaccination in the coming days, maybe even tomorrow. What's been the key to Israel's response to the pandemic that we can learn from here in the United States, as well as the, efficient rollout of the vaccine.

Michael Oren: (32:55)
So now here's the bad news and the good ones. Let me start with the bad news. Today we, we passed the 10,000 positive rate on the testing is very, very high by any international standards. We have three populations here who are resistant to suggestions that they should wear mask and [crosstalk 00:33:16] Jewish population. They're not giving up on their weddings and their funerals and their tourist study during the day. And our population is not giving up on his weddings, these huge weddings.

Michael Oren: (33:29)
And [inaudible 00:33:30] and if you were here on the beach, you'd be out there with thousands of young people on the beach. In America wearing a mask is kind of a political statement. It says whether you're liberal or conservative. Here, it's a social statement. If you're wearing a mask, if you're not cool, you're an old guy like me. Young guy like you'd be out there without a mask because it's uncool. That's been difficult. And we've had to now go into our third and a half lockdown, which is very difficult. We are a country that is, again, a family country is. Israel has the highest natural birth rate of any country in the modernized world.

Michael Oren: (34:06)
Something between three and five kids per family. And if you're a working couple, couples work here with three to five kids at home eat is really difficult, very difficult. Our economy is taking a huge hit, the highest [inaudible 00:34:18] in our history. A $50 billion deficit was very high for us. That's all the bad news. The good news is that we are a small country. We are all on a computerized health system. We all carry a card that tells every doctor, every hospital, exactly all the medications we've received. So we're a closed laboratory.

Michael Oren: (34:38)
And the makers of these vaccines, Pfizer's Madonna understand that if they want to see the impact of the vaccines on a closed environment, this is the place [inaudible 00:34:48]. So we moved very fast, credibly done to the prime minister and now we moved very fast on the front, every night to the CEOs of these countries. And he believes that by the middle of March, we will be completely vaccinated. We will be the first country on earth to be completely vaccinated. Again, I'm going from my vaccination tomorrow, my second one. It's done so well, John, I can't tell you go in there. It's clean, it's respectful. It's all computerized. You get updates on your text messages all the time.

Michael Oren: (35:15)
They want to know how you're do it. They're reminding you well. It's pretty amazing in that way. We also have one advantage is that the United States doesn't have, and this gets into somewhat sensitive area. And that is, our personal privacy laws are less rigorous than yours. Now, the founding fathers, God blessed them, they dispersed power. There's president, there's federal power, state power, local power, municipal power. And it's very difficult to get a united policy around that, but the other thing also were very fearful of threats to American Liberty. So they put in all these checks against people might threaten liberty, but we didn't go through that process.

Michael Oren: (35:56)
So we have our equivalent to the FBI has a tracing system, which wouldn't be acceptable in the United States. But if I pass somebody in a grocery store was tested positive for COVID, I'm going to get a message that's going to put me in isolation for nine days right there. And by the way, I was in isolation when I flew back from my father's illness. Israeli [inaudible 00:36:19] every day, twice a day, the Israeli police called me. "Hi, Israeli police here, are you in isolation? Just checking up on you." Like that, literally. So if I walked out of my room, believe me, someone's going to know it. And I pay a very big, fine.

John Darsie: (36:39)
It's a double-edged sword for sure. We obviously love our freedoms that we have in this country, but, in the middle of a pandemic, it becomes a little bit difficult. when people use mask wearing and social distancing as a political statement, as you mentioned. I want to leave you with one more question and your immense wisdom. You understand how to diffuse, extremism and live in an area of the world that it's always precarious. And in the United States, as we talked about earlier, we are seeing a rise in extremism. We saw the disgusting events that took place at the Capitol.

John Darsie: (37:12)
A few days ago, you have people with really extreme ideologies. I think a lot of people saw the image of a man with a camp Auschwitz shirt, which was obviously disgusting. How do you think if you were giving advice to domestic leaders in the United States, how do we diffuse this rise in extremism and these extreme divisions that we're seeing in the country without, talking down to people. You had 74 million people who voted for president Trump and many of which still believe he's doing the right things. So how do we solve some of these divisions that we're seeing in the County?

Michael Oren: (37:47)
But to me, there's only one way. And we do it here. We ourselves don't do it enough john. And that has to be for the dialogue. I'm also a writer, I write for American publications. And what all of us in our community of writers realizes is that what has died in the United States has been discourse is the ability to talk to one another. There used to be even publications where if you had a good idea, it didn't matter if it was right or left, you could publish in that magazine, you were judged on the quality of the idea and not on its political orientation. That has been lost. And what there has to be a national reconciling and introspection and effort map provide forums for people from different perspectives to meet on a mutually respectful basis. And I think of any other way to do this.

Michael Oren: (38:37)
And have we watched that polarization deepen literally in front of my eyes in Congress during the years in which I was Washington. Once upon time congressmen from both sides of the aisle, they'd played cards, they go drinking together, they played basketball, they lived in the same boarding houses. It doesn't exist anymore. It doesn't exist anymore. It's so sad to me, that was the strength of America. That ability. It might distinguish colleagues from across the aisle on [crosstalk 00:39:01]. You don't see that anymore. You have to restore the civility. What people didn't understand in Israel, and I don't know if they understand it in America that much anymore, is that the civility wasn't just being polite.

Michael Oren: (39:16)
Civility was a foundational idea for our society for a civilization, was the way that people from different walks of life and different outlets could coexist. And that was part of America's great strength. And part of America's weakness that we're witnessing in the world is because [inaudible 00:39:34]. And so I think speaking as Israeli, we have a profound national interest in the restoration of American stability. Please start talking [inaudible 00:39:42].

John Darsie: (39:43)
Yeah. And it's a beautiful part of Israel that a lot of people, I think misunderstand is that you do have a lot of cultures, like you mentioned that do co-exist in harmony that have different viewpoints on religion and social issues. And you guys live together in harmony and in a beautiful culture. We have a lot to learn from you guys over there. Ambassador Michael Oren, thank you so much for joining us here on SALT Talks. Anthony, do you have a final word for the ambassador before we let him go?

Michael Oren: (40:08)
Thank you, John. Thank you.

Anthony Scaramucci: (40:09)
Well, I would say next year in Jerusalem to ambassador because that's where I want to be hopefully next year. Maybe even sooner than that. We have our SALT conference coming up, hopefully in the middle East and as a result of the Abraham Accords, I'm hoping that you will be present there. We can meet with you live on stage, discuss all these great things that are happening.

Michael Oren: (40:31)
Great [inaudible 00:40:32]. Thank you so much guys, for hosting me. Be well, be healthy. And get vaccinated.

Anthony Scaramucci: (40:39)
Wish you the best. If I could get it, I would, I just have to wait on line right now. But as soon as they allow me to have it here. [crosstalk 00:40:46] I'm taking it.

Michael Oren: (40:47)
We'll [inaudible 00:40:47] on here.

Anthony Scaramucci: (40:49)
All right. Thanks, sir.

Michael Oren: (40:51)
Take care everybody. Be well. Thanks for having me. Bye.

John Darsie: (40:54)
And thank you everybody who tuned into today's SALT Talk with ambassador Michael Oren. Just a reminder, you can sign up for all of our future SALT Talks at salt.org/talks. And you can access our entire archive of SALT Talks at salt.org/talks/archive. Please follow us on YouTube. We're broadcasting all of these episodes of SALT Talks on our YouTube channel. Our followership is growing quickly on YouTube. We're very excited about that.

John Darsie: (41:20)
So please follow us on YouTube and please follow us on social media. We air these on Twitter via Periscope as well. So please follow us there and please also follow us on Facebook, Instagram, and LinkedIn. If you're on those channels. Please tell your friends about SALT Talks. We love growing our community. We've been able to grow awareness of SALTs in all these discussions that we have during the pandemic and the lockdown as we've had to postpone our conferences.

John Darsie: (41:42)
So that's been extremely gratifying. So please continue to spread the word if you find these interviews interesting. On behalf of the entire SALT team, this is John Darsie signing off for today. We'll see you back here again tomorrow on SALT Talks.

Benn Steil: “The Marshall Plan: Dawn of the Cold War” | SALT Talks #137

“When we get to 1947 and the Marshall plan, the Truman Administration is already in a major corrective mode. The State Department is already talking openly about a two-world vision for the post-war order.”

Benn Steil is senior fellow and director of international economics, as well as the official historian in residence, at the Council on Foreign Relations. His most recent book, The Marshall Plan: Dawn of the Cold War, was named the winner of the New-York Historical Society's Barbara and David Zalaznick Book Prize, awarded each year to the best work in the field of American history or biography.

Before his death, FDR developed four pillars of a post-WWII foreign policy: peaceably dismantle the British Empire; build permanent peace between the United States and the Soviet Union; profitably dismember and deindustrialize Germany; and integrate the global economy with short-term IMF loans. This represented the hope for a one-world architecture where the US and Soviet Union got along. Circumstances quickly forced then President Harry Truman to pivot and begin dividing the world between Marshall states- countries that asserted liberal democracy and free markets- and Soviet states under communist rule. This marked the dawn of the Cold War. “When we get to 1947 and the Marshall plan, the Truman Administration is already in a major corrective mode. The State Department is already talking openly about a two-world vision for the post-war order.”

The multilateral alliances that came out of WWII, like NATO, represent some the period’s most important and enduring legacies. The world depends on these institutions even more today as the need to build alliances only grows. A rising China presents a global threat that can only be managed with new partnerships that meet these challenges collectively.

LISTEN AND SUBSCRIBE

SPEAKER

Benn Steil.jpeg

Benn Steil

Senior Fellow, Director of International Economics & Historian-in-Residence, Council on Foreign Relations

MODERATOR

anthony_scaramucci.jpeg

Anthony Scaramucci

Founder & Managing Partner

SkyBridge

EPISODE TRANSCRIPT

John Darsie: (00:07)
Hello everyone and welcome back to Salt Talks. My name is John Darsie. I'm the managing director of Salt, which is a global thought leadership forum and networking platform at the intersection of finance, technology and public policy. Salt Talks are a digital interview series that we started in 2020 with leading investors, creators, and thinkers.

John Darsie: (00:29)
While we started Salt Talks as a response to the pandemic, due to the fact that we had to cancel our global Salt conferences, which we host twice a year, one in the United States and one internationally, we're going to continue to do these Salt Talks because they've been so fun, so engaging with our community. We've been able to expose our community to so many interesting speakers and ideas and the interaction as well with members of the Salt community has been so much fun.

John Darsie: (00:54)
So we're going to continue these even around our conference circuit that we do. So we're very excited to continue these Salt Talks into 2021 with several talks per week on a variety of topics. What we're trying to do with Salt Talks is replicate the experience that we provide at our global conferences, which is to provide a window into the mind of subject matter experts as well as provide a platform for what we think are big ideas that are shaping the future.

John Darsie: (01:21)
We're very excited today to welcome Benn Steil to Salt Talks. Benn Steil is the senior fellow and director of international economics, as well as the official historian in residence at the Council on Foreign Relations in New York City. He's also the founding editor of International Finance, a scholarly economics journal. He's the lead writer of the Council on Foreign Relations Geographics Economics blog and the creator of five web based interactive tracking global growth, global monetary policy, global imbalances, sovereign risk, central bank currency swaps, and China's Belt and Road initiative.

John Darsie: (02:01)
Prior to joining the Council on Foreign Relations in 1999, Benn was the director of the International Economics program at the Royal Institute of International Affairs in London. He came to the institute in 1992 from a Lloyd's of London Tercentenary Research Fellowship at Nuffield College at Oxford, where he received his MPhil and DPhil in economics. He also holds a bachelor's degree of science in economics, summa cum laude from the Wharton School of the University of Pennsylvania.

John Darsie: (02:34)
Dr. Steil has written and spoken widely on international finance, monetary policy, financial markets, and economic and diplomatic history. He's testified before the US House of Representatives as well as the Senate and the CFTC. He's a regular op ed writer and commentator on CNBC. His most recent book, The Marshall Plan, Dawn of the Cold War, won the New York Historical Society's 2019 Barbara and David Zalaznick prize for best work on American history. It won the American Academy of diplomacy 2018 Douglas Dillon prize. It won the honorable mention runner up of the 2019 ASEEES Marshall D. Shulman prize and was shortlisted for the Duff Cooper prize and is ranked number three among book authorities best diplomacy books of all time.

John Darsie: (03:27)
Hosting today's talk is Anthony Scaramucci, who actually is a member of the Council on Foreign Relations. Anthony is the founder and managing partner of SkyBridge Capital, a global alternative investment firm. Anthony is also the chairman of Salt. With that, I'll turn it over to Anthony for the interview.

Anthony Scaramucci: (03:44)
Well, Dr. Steil I have to tell you, I read your book, it feels like 100 years ago now sir. I read it back in July of 2019. I was thinking to myself, what a splendid book and what a splendid moment to write a book like this because it was a time when America was thinking very big on the world stage in terms of how to be inclusive and engaged and how to make the world more peaceful through global shared prosperity.

Anthony Scaramucci: (04:12)
Congratulations on the book, it's written very well to bestseller, The Marshall Plan, Dawn of The Cold War. Benn, if you know anything about me, I'm not really that promotional. If you probably... So that's why I'm waiving the book like it's a windshield wiper in front of me. But I want people to go out and read this book because it's very timely for what's going on in the world today. You talk about in the book, monetary nationalism and globalization as being a dangerous combination. I would hope that you could explain to people who haven't yet read the book what that means Dr. Steil.

Benn Steil: (04:50)
I think I actually made that particular comment in my previous book, which was called The Battle of Bretton Woods. That was an historical narrative on the Bretton Woods international monetary conference of 1944. That's where the IMF and the World Bank were created and the dollar based international monetary system, and actually got the idea of doing the Marshall Plan book while I was writing Bretton Woods. I was working on an aftermath chapter and it really hit me how very different the view of the post war world was under President Truman in 1947 when the Marshall Plan was launched, and what it had been under FDR in 1944 when the Bretton Woods Conference had been held.

Anthony Scaramucci: (05:44)
Explain that to people because a lot of people don't realize this but in the mid 40s, 43, 44, FDR was building the post World War Two architecture, as you point out in the book. But Truman had a totally different vision for where he wanted to go relative to FDR. I was wondering if you could contrast those two visions.

Benn Steil: (06:05)
Right. In 1944, the US is very near the zenith of its power historically. We account for more than half the world's manufacturing output. One year later, we would have sole possession of atomic weapons. This is a period in which we had enormous leeway to improvise with the architecture of both the global economy and the global political system.

Benn Steil: (06:38)
Now, in 1944, FDR was still proceeding under the expectation, or one might say the hope that we could have what he called a one world architecture. This is a world in which the United States and the Soviet Union would somehow find a means of cooperating with each other to promote peace and stability and economic prosperity throughout the world. Now, that sounds naive now but in April of 1945, when FDR died and Truman took over, he had no intention of overthrowing this foreign policy architecture that had been handed down to him by FDR. It was really circumstances that dictated that we needed to go in a very different direction.

Benn Steil: (07:34)
Now there were four pillars of foreign policy thought that underlay FDR's one World Vision. Those were the following [inaudible 00:07:45], first of all, that the British Empire could somehow be peaceably dismantled. That didn't work out. The British Empire collapsed very violently and chaotically in early 1947. Second, that the Soviets could be co-opted into a peacetime, a permanent peacetime alliance with the United States to promote political and economic stability through institutions like the United Nations, the IMF and the World Bank.

Benn Steil: (08:18)
That didn't work out obviously. The third was that Germany could somehow be profitably dismembered and de-industrialized. This was the so called Morgenthau plan for Germany developed by FDR's treasury secretary, Henry Morgenthau. Truman administration was forced to reverse this because Germany was sinking into chaos and disorder and it was redounding to the benefit of the Soviet Union.

Benn Steil: (08:48)
Finally, and this goes back to Bretton Woods, there was a fourth pillar and that was the idea that somehow a globally integrated economy could be rebuilt on the basis of just short term loans from an international institution, the IMF, that would help countries who were in temporary balance of payments difficulty get back on the right track. That didn't work at all. When I referred to this idea of monetary nationalism. That was the idea of Bretton Woods that the United States could have it all. That we could have the US dollar as the foundation of an international monetary system, but it would be indelibly backed by gold. We could meet this promise without in any sense tying ourselves down.

Benn Steil: (09:42)
As I pointed out in that book, it didn't turn out to be anything of the sort. When we get to 1947 and the Marshall Plan, the Truman administration is already in a major corrective mode. Now the State Department is talking openly about a two World Vision for the post war order. Very different from the one that FDR had developed. In this world, there would be martial states that would effectively be led by the United States. These would value above all things democracy, a liberal political order and free markets.

Benn Steil: (10:28)
There would be what the State Department called the slay world or the communist world, which would be led by necessity of the Soviet Union. And obviously, the Truman administration wanted to keep that as small as possible concentrated in Eastern Europe, the immediate periphery of the Soviet Union.

Anthony Scaramucci: (10:46)
It's a fascinating time because you also pointed out in the book, that improvisation that we're really trying... It's not... Sometimes people look back on the past and say, okay, they had this grand blueprint and they masterfully created this architecture, but it was a work in progress. Of course, we had the situation in Turkey in Greece which led to the introduction of the Truman Doctrine and the rejection of communism around the world.

Anthony Scaramucci: (11:15)
But before I go deeper into the book, I want to touch on Bretton Woods, if you don't mind, because I found that book also fascinating which is perhaps why I conflated the two. Tell us about the idea behind Bretton Woods, how well it worked and why it failed and obviously with the August of 1971 pulling of the pin of gold tied to the US dollar by Richard Nixon. Give us some of your sense for that.

Benn Steil: (11:43)
Well, Bretton Woods was a rather eclectic amalgamation of views about what the post world would be. On the one hand, it was an extremely nationalist view led by treasury secretary Henry Morgenthau's assistant, Harry Dexter white. He was going to build this architecture around the US dollar which he said would be tied to gold but in no way did he want the United States to be constrained in how it operated its economy by gold.

Benn Steil: (12:22)
So we wouldn't obey any sort of rules dictated by the movement of gold ownership across borders. We would just have so much gold that people would be obliged to use the US dollar simply because after World War Two, it was the only credible voucher for gold. It's hard to put ourselves back in that mindset now. But back in 1944, people really viewed gold as being the foundation of money and national currency is just being either more credible or less credible vouchers for gold.

Benn Steil: (13:02)
By the time we get to 1944, Britain being almost bankrupt, the pound sterling is no longer a credible voucher for gold so you're left with the United States. But on top of that view, Harry Dexter white remarkably, as I explained in the Battle of Bretton Woods, was a progressive romantic who had very positive views about the role of the Russian Revolution and the history of mankind. He viewed it as a great liberating event. He was quite convinced that the world was going to be moving more towards a Soviet state managed economy style of operation after the war.

Benn Steil: (14:02)
He viewed Republicans in Congress as being against US interest by trying to counter or contain the Soviet Union. He himself was, in fact, an agent of the Soviet Union. He passed classified documents to them. He pursued major foreign policy initiatives that redounded to their interest. It's hard to imagine those things being spliced together. But it was really central to the American vision at Bretton Woods that the Soviets would somehow be willing to sign on to an American architecture for the post war world.

Benn Steil: (14:55)
By the time we get to 1947, it's clear that's not going to happen. None of the assumptions that Harry Dexter White took into Bretton Woods turned out to be true. For example, the monetary system at Bretton Woods assumed that all the major European currencies would be completely convertible into US dollars. It wasn't in fact until 1961, that that took place. So what we call the Bretton Woods system that supposedly lasted from 1945 until Nixon closed the gold window in 1971, really didn't even start operating until 1961.

Benn Steil: (15:42)
By the time we get to that period, the system is already coming under enormous strain as the US is losing gold reserves, the French and others are losing confidence in the system and are no longer willing to accumulate dollars. The Marshall Plan was in many senses a major corrective both from an economic perspective. That is, the United States now realized that we needed much more than short term loans from a new international institution to revive a global economy. We were going to have to reconstruct the economies of Western Europe on the fly and it was going to be enormously expensive.

Benn Steil: (16:28)
Second, that we were not going to be able to do this in conjunction with the Soviet Union. In fact, we had to expect that the Soviet Union was going to resist this initiative as they did. As you know, I explained in the book, that the Marshall Plan is really at the center of the Cold War. That is the Soviet Union, Stalin in particular, think of the Marshall Plan as a major threat to their control of their satellite states in Eastern Europe. Even more importantly, he saw it as a threat to the ability of the Soviet Union to constrain Germany, whom they consider to be obviously the mortal enemy.

Anthony Scaramucci: (17:19)
I've heard you say this stuff before, Dr. Steil, but I'd like you to repeat it to all our Salt viewers and guests about the size and scale of the Marshall Plan. Yes, the 14 or so billion dollars at that time but what did it mean in today's dollars and as a percentage of GDP today. Because I think those numbers are actually monumental.

Benn Steil: (17:42)
Over a four year period, it amounted to $13.2 billion which may not sound like terribly much but in current dollars, that's about 140 billion. This was 2.6% of the recipient country output. There were 16 European countries that ultimately participated in the Marshall Plan. We can also talk about how those countries came to be selected or self select, which is itself a really interesting story. It was 1.1% of US GDP.

Benn Steil: (18:20)
Now to put that in context, if we were to launch a Marshall Plan today, of equivalent size in terms of the percentage of our economy, we would be talking about a plan greater in size than $800 billion. When you add in the military aid that started pouring into Europe, particularly after the creation of NATO, in 1949, which was really... Which became the military escort for the Marshall Plan. And then in particular, the aid we provided during the Korean War began in 1950. Now we're talking about sums that would be equivalent today to over a trillion dollars. So extremely significant.

Benn Steil: (19:11)
To put this in the context of the economic performance of the US economy at the time, in 1946, this is the year after the war ends, we had a GDP growth rate of negative 11.6%. This was a massive economic contraction brought about by the collapse in government spending with the end of the war and the withdrawal of our troops. So it was a very, very difficult period of economic adjustment in the United States. As you can imagine, few in Congress, particularly on the Republican side, were in any mood for a major new foreign aid program. They wanted their peace dividend, they wanted tax cuts. Selling this idea to the American public was itself a very major initiative. There was, as Marshall like to put it, a Marshall Plan to sell the Marshall Plan.

Anthony Scaramucci: (20:21)
That's another fascinating part of the book, because it's not Marshall's idea. Sort of Germany [inaudible 00:20:27] him and Truman says, well, there's no way it can be the Truman plan because I'm not that popular up on the hill. Atkinson isn't popular either for that matter. And so they turn to the five star general, the Chief of Staff of the Army. He unveils this plan at Harvard University, he gives it the very famous commencement address, talking about the rebuilding of our allies, but also our adversaries.

Anthony Scaramucci: (20:53)
It's a fascinating part of human history because this could be the only time where a vanquishing power is replenishing and rebuilding the vanquished, which is in very stark contrast to what happened after Versailles and the Treaty of Versailles, which call for war time reparations and loans. So my question, Dr. Steil, is did it work?

Benn Steil: (21:20)
The short answer is yes. But as you pointed out earlier, this was very much a grand improvisation. Mind you, there was a lot of planning that went into it, a lot of serious planning. But there were major adjustments that were made on the fly. If you look at the original vision of the Marshall Plan, where did it come from? Now you and I both know, Anthony, that the best policy ideas almost always come from economists. But in this particular case, in this rare particular case, it didn't come from economists.

Anthony Scaramucci: (21:58)
Let's not go into that story then. Let me go to another question. It didn't come from an economist, Dr. Steil, I don't want to hear about it.

Benn Steil: (22:10)
Where did the ideas come from? Very surprisingly, they came from the military establishment. Why is that? Consider the situation that we were in May of 1945 when the fighting stops in Europe. We have over 3 million troops in Europe. The American public wants them home immediately. President Roosevelt had promised at Tehran in 1943 openly to withdraw all American troops from Europe within two years of the end of the fight. As I pointed out earlier, Truman at this point, is not looking to reinvent the world. He's actually searching for FDRs blueprint so that he can execute it.

Benn Steil: (22:54)
He starts withdrawing the troops. By the time we get to 1946, the American military and diplomatic establishment knows that they have a huge problem on their hands because FDR had believed or wanted to believe that the Soviets would effectively contain themselves after the war. That is that they would be satisfied with their newly expanded borders and security zone. A buffer that they had created in Eastern Europe.

Benn Steil: (23:23)
But by 1946, it's clear, they're not satisfied. They're threatening Iran, they're threatening Turkey to take over territory. They refuse to withdraw troops from Iran. They only back down when Truman sends a large military flotilla into the region. The American military establishment knows that's not going to do. That's not going to be sufficient for Europe. So how are we going to protect our most vital interests in the world, which we consider at the time to be in Western Europe, without relying on the military?

Benn Steil: (23:57)
And so they looked to instigate a new form of asymmetric warfare that we would wage against the Soviets to counter their conventional force dominance in Europe. We would rely around our economic power. We would leverage our economic dominance in the world to rebuild and reconstruct the West European economies as quickly as possible so that they would be able to defend themselves, both their external borders and the internal integrity of their political systems.

Benn Steil: (24:39)
What we didn't wager, however at the time, was that the Europeans wanted no part of an integrated Western European economic and political structure. The French and the British in particular said this is a mortal threat to our security. If we're no longer going to be self sustaining, if we're going to be dependent on one another, how do we defend our borders? The French, for example, said you're withdrawing your troops from Europe. In five years time, what do we do if the Germans cut off our coal supply or more likely, since you're going home, the Soviets will have taken over Germany and they will cut off our coal supply.

Benn Steil: (25:23)
If we're going to go forward with your economic and political integration vision. That is the vision behind the EU, which actually came from the United States. Contra Donald Trump, who has said that the EU was created to screw the US on trade. It was in many ways created by the State Department. If we go forward, we Europeans with your vision, we won't be able to protect ourselves. So we need security guarantees from the United States.

Benn Steil: (25:53)
So in 1949, a year and a day after passage of the martial aid legislation, we passed the NATO Founding Act legislation. If you go back to the first part of my explanation here, the American military establishment was looking for a way to protect Western Europe without using the military. Yet the Europeans made it clear to us that that was a dream that could never be fulfilled. That the US would have to make firm security commitments to Western Europe in order to get them to go along with the American integration idea.

Anthony Scaramucci: (26:33)
This is a brilliant exposition of what's in the book. It begs the question, did this work for the United States and has worked for the West in terms of setting up the architecture? Although it wasn't a one world architecture, set up the architecture for the free world to have a semblance of long term peace and long term prosperity. If so, what are the lessons that can be learned from that?

Benn Steil: (27:00)
When we ask the question did it work? If you look at the early studies that had been done on the Marshall Plan going back to the late 1940s and 1950s, they really just simply looked at the amazing recovery of the West European economies and said, yeah, well all this aid must have worked. Look at the performance of these economies between 1948 and 1942. Output in the Marshall country is increased by over 60%.

Benn Steil: (27:39)
To put that in context, if we take the four and a half year period running up to 2008 and the great financial crisis, the EU's total growth rate over that period was 15%. This is a really remarkable regeneration of the European economies. But only later did economist start questioning how much of this came from the Marshall aid? As economists were wanting to do, they ran regressions looking for the secret sauce. What was it that revive the economies?

Benn Steil: (28:19)
They asked, was it for example, that this aid money allowed them to import vital commodities, industrial machinery, et cetera that they wouldn't otherwise have been able to bring in? Did that revive the European economies? The answer is yes, but it would only explain about half a percent of growth whereas you're seeing many multiples of that. Up to seven percentage points of additional growth coming from the Marshall Plan. Was it the fact that government spending was increased?

Benn Steil: (28:56)
No, government spending as a percentage of GDP over those four Marshall years actually fell in Europe so it wasn't that. What was the answer? What was it in the Marshall Plan that really regenerated the European economies? I go back to George Kennan's point, the famous American diplomat, George Kennan is one of the architects of the plan, he's no economist but he recognizes that the primary benefit of the Marshall Plan is going to be psychological in Europe. To convince the Europeans that unlike after World War One, we are not going home.

Benn Steil: (29:33)
That's why the Marshall Plan is a four year scheme rather than a one day scheme in which we write them a giant check and wish them well. We wanted to convince the Europeans that we were going to be with them year after year. Did that work? Yes, but only with the security guarantees. I can't emphasize how important those security guarantees were. Without the security guarantees, you wouldn't have gotten the private investment necessary to regenerate these economy.

Benn Steil: (30:00)
To put that in context, look at the money we've spent on reconstruction in Iraq and Afghanistan. Well over $200 billion. Just reconstruction aid alone, that is more than 50% greater than the totality of Marshall aid in current dollars. So it's not as if we haven't tried a Marshall approach to economic reconstruction in Iraq and Afghanistan but we were not able to provide those countries with the internal security and external security necessary to produce economic growth. Whereas in the case of the Marshall Plan, because of NATO and the security commitments of the United States, we were able to provide those guarantees.

Benn Steil: (30:52)
The second thing I would just emphasize briefly is the 180 degree change we made in occupation policy in Germany. That is shifting from the Morgenthau plan, which was to de-industrialized Germany, essentially to impoverish it. The Marshall Plan, which would aim to make Western Germany, the part we controlled, into the industrial engine of a new integrated Europe. A totally different vision that was enormously successful.

Anthony Scaramucci: (31:23)
Well, I mean, it's an unbelievably powerful story in the book. It is a story about improvisation but it's also a story about really good long term strategic planning, with the intention of collaboration. Ultimately, the lessons from this book that I took away, is that we needed America engaged. Certainly, we needed an America to help its own and to rebuild our infrastructure and to rebuild our lives here. But we do needed America engage with the rest of the world to give that peace, to give that confidence and to give that ultimate prosperity that we want. Back here in our homeland.

Benn Steil: (32:00)
Alliances, I can't emphasize this enough, are at the centerpiece of the Marshall Plan.

Anthony Scaramucci: (32:06)
No question.

Benn Steil: (32:07)
Building alliances around the world. That is we weren't going to rely on our own muscle. We were going to rely on others who shared a common vision, a common attachment to liberal democracy and open democracy.

Anthony Scaramucci: (32:26)
[inaudible 00:32:26].

Benn Steil: (32:28)
We eventually extended that strategy to Asia as well, and rehabilitating Japan and providing security for South Korea. It was the same sort of thinking that underlie the Marshall Plan.

Anthony Scaramucci: (32:44)
Well, this is a brilliant book Dr and I enjoyed it a great deal. I got to turn it over to the homegrown millennial now. He's going to ask you some questions. He'll try to steal the show from me. So if you have to cut him at the knees, please go ahead and do that. You have my license and proxy to do that. But go ahead, John Dorsie.

John Darsie: (33:06)
Thank you very much Anthony for that warm introduction. As a millennial, obviously, I'm a student of history but I'm also very concerned about the future as well. I'm going to ask you a few questions that we got from our audience that pertain to topics that you're an expert on and relate to your books as well. We're talking about the Marshall Plan and all the benefits that it had for the United States and for the world.

John Darsie: (33:31)
The idea of a new Marshall Plan is sort of a buzz word or a buzz phrase these days. If we were to engage in a new Marshall Plan, where would that be best targeted, regionally or country specific? What type of aid and what type of funding would we provide to those regions or to those countries that would not only serve America's interests abroad but also aggregate to the global economy as well?

Benn Steil: (33:59)
In recent years, there have been all sorts of proposals for new Marshall plans all over the world. In Ukraine, in Greece, in southern Europe and North Africa. The Arab Middle East, Syria, et cetera. If you take the blueprint of the Marshall Plan and try to transplant it to these particular circumstances, you're not going to get success. Why do I say that?

Benn Steil: (34:27)
Take Syria, for example. Without creating an environment of internal and external security in Syria, you will never get the sort of economic growth and stability that the Marshall Plan was able to bring in Western Europe. Remember, in the case of the Marshall country, we weren't trying to reinvent the world, right? We were taking countries that had been democracies with market based economic systems before the war, and rehabilitate and reconstruct them. Bring them back to what they were before the war and reintegrate them on a Western European level.

Benn Steil: (35:19)
So you already had functioning, relatively impartial bureaucracies that were capable of implementing these plans. You had public support for democratic cooperative political structures. These are not situations that exist, for example, in Ukraine or Syria today. So it's very difficult to transplant that Marshall idea. That's not to say that using significant amounts of financial aid cannot help in many circumstances. The Marshall Plan analogy has been used, for example, to discuss how we should approach climate change.

Benn Steil: (36:06)
There's no doubt that it's going to take significant investment in order to address the issues of climate change but I don't believe that spending enormous sums of money as a cure for problems around the world is the message that we should take away from the Marshall Plan. The primary message that we should take is that it is vitally important for the United States to build and support alliances around the world, even more important than it was in 1945.

Benn Steil: (36:40)
In 1945, again, we were at the apex of our power. We account for more than half the world's manufacturing output. We have sold possession of atomic weapons, we were never in a stronger position to pursue a policy of America first. Yet we didn't. Why? Because we had a long term view of what the Marshall Plan was about. Let me quote from a remarkable letter. I didn't get to emphasize this before, but it's very important, this was a bipartisan initiative. It's hard to imagine something like this happening today.

Benn Steil: (37:18)
But this was a bipartisan initiative, Harry Truman, a Democrat, faced with a republican congress still managed to push through this remarkable agenda. Senator Henry Cabot Lodge Jr. In October of 1947 writes to Senator Arthur Vandenberg, a republican senator from Michigan, head of the senate foreign relations committee. Let me read you what he said. I think it's just so remarkable and spot on. He says, and I'm quoting, "The recovery of Western Europe it's a 25 to 50 year proposition. The aid which we extend now and in the next three years will in the long future result in our having strong friends abroad."

Benn Steil: (38:01)
So fast forward from the Marshall Plan to 1989. This is 42 years after the Marshall Plan. The Berlin Wall collapses. What do we notice immediately? That the alliances that America built as offshoots of the Marshall Plan, NATO and the embryo of the European Union are now more popular than ever. The newly liberated countries of Central and Eastern Europe are clamoring to get in.

Benn Steil: (38:33)
Whereas the Alliance's such as they were that the Soviets created like the Warsaw Pact, collapse overnight. Now, these alliances are far more valuable to us today, now that we only represent a quarter of the global economy than they were in 1945, when we were half the global economy. We are reaping the dividends today of the investments we made then. To give you other examples of what I consider successful examples of Marshall thinking, think of the creation of NAFTA.

Benn Steil: (39:09)
NAFTA was not just about integrating the economies of North America. It was about putting the political relationship between the United States and Mexico on a very different path. Demonstrating to the Mexicans that we respected their sovereignty and that we were treating them as equal partners in an important initiative and security cooperation between the United States and Mexico improved dramatically after the implementation of NAFTA. My bottom line is if you're looking for areas in which to apply martial thinking, remember that the creation of alliances for the United States was the central innovation behind it.

John Darsie: (40:01)
I want to switch gears a little bit. Again, talking a little bit more about things that are happening in the modern day because you wrote a fantastic op ed in Business Insider that cites our good friend, Jeff Sonnenfeld. Anthony is a member of the Yale CEO Summit community as I know you are. I've had the privilege of accompanying him to a couple of events. It's a unique privilege to be able to see all those great leaders in one room talking about the issues of the day.

John Darsie: (40:28)
He did a study recently where he surveyed his community. Found that 84% of executives said that the failed pandemic response by the Trump administration hurt their business and that generally, the view coming out of those meetings is that a vacuum of leadership has harmed corporate interests in business and the economy in the United States. Trump always viewed the stock market as a barometer of his success. The stock market performed very well during his tenure as it did under President Obama.

John Darsie: (40:54)
He often said that the market would crash if Vice President Biden, now President Elect Biden, were to win the election and take office. But instead markets rallied after the presidential election and the results became clear and they've rallied in the aftermath of the Georgia senate run offs where the democrats want to give them a majority in the Senate. Why, in your view, are markets rallying on the back of a presidency that... The markets did well under Trump but why today are they rallying on news of Biden winning and democrats getting control of Congress?

Benn Steil: (41:28)
There's no doubt in my mind that there were elements of the Trump economic architecture that the markets liked very much. For example, my co-author, Ben Della Rocca and I, we looked at the rise in what's called implied earnings growth in stock prices after the successful implementation of President Trump's tax cuts, particularly the corporate tax cuts in 2017. We found a significant Trump bump there. We also just examined in our Business Insider piece, what happened to implied earnings growth after the election.

Benn Steil: (42:18)
That is after you strip out extraneous factors like interest rates and so on. We found a very significant Biden bump. It was in fact, interestingly enough, almost identical in size to what was called the Trump bump back after the election in 2016 and what underlay it. You refer to Professor Sonnenfeldt. Well we think, first and foremost, if you look at his survey work and the survey work that others have done, business wants to see the pandemic addressed effectively and with far more vigor than it's been addressed by the Trump administration.

Benn Steil: (43:10)
Professor Sonnenfeld surveys really made clear the degree to which executives were not only deeply concerned about the pandemic but believe that President Trump's response to the pandemic was holding them back. Wasn't just gosh, this pandemic is awful, but our response to the pandemic is grossly insufficient. This is one reason. Another reason is that the markets are very positive about the prospects for more fiscal stimulus.

Benn Steil: (43:53)
I think that's primarily what you're seeing now in terms of the reaction to the Georgia vote. That if the democrats come to control the Senate, the prospects for another very significant stimulus package are very good. Perhaps even more, perhaps we'll finally get a significant infrastructure initiative which the markets would also applaud.

Benn Steil: (44:22)
Finally, what you see in this survey data is great concern among executives about the enormous economic and political instability that we've seen over the past four years with trade wars which have gone nowhere, in terms of changing China's behavior, for example, in a positive direction. Beating up our allies in North America, and Europe and Asia. South Korea and Japan. The markets don't like that at all and they view the prospect of our finally re-engaging positively with our allies and having a coherent approach to the China challenge, the market seemed to view that very positively.

John Darsie: (45:17)
So speaking of China, I want to close with a couple questions on China that I'll weave into one. You're a great student of China. You study the Belton Road initiative, the Asian infrastructure bank. While Trump has been pulling America out of these multilateral agreements and stepping back from the rest of the world, China has been stepping into that void, even coming into areas of South America. What was the strategic thinking behind China with the Belton Road initiatives? How have they been successful or not been successful and what direction do you expect US China relations to take over the next four years, at least of the Biden administration?

Benn Steil: (46:00)
That's a lot to bite off in [inaudible 00:46:02]. Where do we start? Belton Road. Belton Road, you will never find on a Chinese government website here is what Belton Road is all about. This is what we wanted to accomplish and this is how we're doing it. Here, by the way, are all the details of our lending contracts under Belton Road. You will never find anything like that.

Benn Steil: (46:26)
When I built my Belton Road tracker at the Council with Benjamin Della Rocca, how did we find out what China was actually doing and these countries that it was lending to for major infrastructure project? How did we find out about it? It was extremely difficult to get details of these contracts. We had to use... In some cases, estimates based on indirect sources or some things that were published by the recipient governments but never anything that we could get out of China.

Benn Steil: (47:03)
So China's been very opaque. It wants a few things are out of Belton Road. First of all, it wants to start getting better returns on its reserves. It's not investing it's central bank reserves directly in Belton Road. But if you think of the funds as being fungible, China is looking for a way to diversify away from US investments, in particular, US Treasuries. Get a better return infrastructure seems to be one way of doing it.

Benn Steil: (47:40)
Of course, you have massive overbuilding in China, massive overcapacity. They're looking for some way to create the demand for this. They're lending to these developing countries, these countries will then hire Chinese firms to build the infrastructure. Although China itself is a major borrower from the World Bank, which is quite perverse because China is now one of... Is the major competitor to the World Bank as a development lender.

Benn Steil: (48:24)
China is making these loans at a very significantly higher interest rate. Now, when these loans fail, in many cases, if you do get details of the contract, like for example, the port facility that China built in Sri Lanka which failed. Sri Lanka couldn't pay back. China takes over these facilities. So even if China did not set out with Belton Road to become a colonial power, they will in effect, become a colonial power and perhaps a hated one by taking over these facilities which they supported with this massive expansion of debt in the developing world.

Benn Steil: (49:07)
Now, how should we react to it? In my view, it's pretty much a no brainer. Let's go back to what the US did after World War Two. Take the World Bank and the IMF. Consider what we managed to create in terms of the architecture there. There is only one country that has veto power within the IMF and the World Bank and that is the United States. Can you imagine us building an institution like the World Bank today and telling the world we want veto power within this organization, sole veto power, no one else will have it. The world would laugh at us.

Benn Steil: (49:47)
But this is our inheritance from our victory in World War Two. We should be exploiting it. Nothing can happen within the World Bank without our agreement to it. We should be putting more capital behind the World Bank. Again why? We can use it to promote our values, our way of doing things, our dedication to non corruption, our dedication to environmental protection, our dedication to not creating debt traps.

Benn Steil: (50:23)
Guess what? We get to leverage it with other people's money because most of the money actually comes from the other countries who participate in the World Bank. It's an absolute no brainer for the United States in its own interest to be pursuing these initiatives through the multilateral institutions that it itself created. Again, coming back to the point, alliances, we built institutions and alliances after World War Two. We should be today, reaping the benefits of those institutions because our allies have been so significantly enriched by this architecture that we created.

Benn Steil: (51:10)
The fact that they're still willing to work with us and indeed are enthusiastic about working with us is the greatest advantage that we bring in terms of countering China's rise to dominance in the global economy. We should be showing a united face to China. We should be showing the world our positive values. Our dedication to liberal democracy and open markets. If we do this together with our allies and within the multilateral institutions that we created after World War Two, we will have far more moral capital than we would by going it alone.

John Darsie: (51:56)
The direction of US China relations. What path do you expect us to take? I think most people expect US China relations to improve. But who's going to give more? Is China going to relax some of its economic conditions open up their economy a little bit, allow more private enterprise and less human rights types of restrictions in the country and expect the United States to be, to acquiesce more to demands that China's making on our side?

Benn Steil: (52:26)
Unfortunately, I think the road that China's is headed down right now, it's pretty clear. It's a road towards more state economic control, more authoritarian political control, more regional belligerence toward other nations in the area. We have to be concerned about it. But the question is, how do we address it? Again, I can't harp on this more strongly enough. We need to do it together with our allies.

Benn Steil: (53:00)
I wrote a chapter to a size volume recently in which I advocated a return to the two world thinking that we implemented in the Marshall Plan with respect to China. That is, we need to build a massive coalition around the world of like minded countries with which we will develop things like 5G and 6G infrastructure. Things of that nature, so that we will not be reliant on China.

Benn Steil: (53:39)
I do think we should always hold out an olive branch to China and make it clear that if China pursues political and economic reforms that will bring them back towards the vision that we had when China entered the WTO nearly two decades ago, that we would welcome China, but we are not afraid, together with our allies to stand up for our values and our interests. If we need to construct a new liberal, democratic, open market, international infrastructure from which China is excluded, we should be willing to take those bold steps.

John Darsie: (54:32)
Thanks so much for joining us. It's a pleasure to have you on and you're rich expertise. Two great books you wrote on the battle at Bretton Woods as well as the Marshall Plan. We would recommend that all of our viewers go out and read those books. They provide a rich history as well as lessons that can be applied today as we enter a new era in Washington. Thank you so much, Benn, for joining us. Anthony, You have any final words?

Anthony Scaramucci: (54:55)
Benn anything you're writing currently that you could talk about?

Benn Steil: (54:59)
Yeah. I am writing a political biography of Henry Wallace, who was FDRs vice president from 1940 to 1944.

Anthony Scaramucci: (55:11)
Another progressive romantic by the way.

Benn Steil: (55:13)
There you are, exactly. Wallace is perhaps the most interesting, almost president whoever was. He lost out to Harry Truman in a very strange open convention for vice president in 1944. Had he won that nomination, he would have become president on FDRs death instead of Harry Truman and he would have tried to take the nation in a very different direction. I'm writing this book on the basis of fascinating new Russian and FBI archival material that's never been brought to bear, just sort of to tell the story of the vision that he had. And to really tell a counterfactual history of what might have happened had Henry Wallace rather than Harry Truman, become president in 1945.

Anthony Scaramucci: (56:11)
Well, we really appreciate you being on. Thank you. I hope to get you back on for that book once it's published Benn.

Benn Steil: (56:18)
My pleasure, thank you Anthony.

Anthony Scaramucci: (56:20)
We really appreciate it Dr. Steil. Thank you for joining Salt Talks.

Benn Steil: (56:24)
My pleasure.

John Darsie: (56:25)
Thank you everybody who tuned in to today's Salt Talk with Dr. Benn Steil from the Council on Foreign Relations out with a new book about the Marshall Plan. Just a reminder, if you missed any of today's talk or any of our previous talks, you can access the entire archive of Salt Talks on our website salt.org/talks/archive. You can sign up for all of our future talks at salt.org/talks. We have several talks a week throughout 2021. We'll take a couple breaks for some conferences that we're doing. But for the most part, we're going to continue this salt talk series indefinitely throughout the year.

John Darsie: (57:01)
Please follow us on social media. We're on Twitter, Facebook, Instagram, LinkedIn, and please tell your friends about Salt Talks. We love growing our community and exposing more people to the educational expertise that our speakers provide. On behalf of the entire Salt team. This is John Dorsie signing off for today. We'll see you tomorrow again on Salt Talks.

Heidi Heitkamp: Issues With Identity Politics | SALT Talks #136

“We used to use the Tip O'Neill line ‘All politics is local.’ That's not true anymore. All politics today are national, and the party identification is awfully hard to crack.”

Heidi Heitkamp is the first woman ever elected to be a U.S. Senator from North Dakota (2013-19). Senator Heitkamp also served two terms as North Dakota State Tax Commissioner and two terms as North Dakota Attorney General as a member of the North Dakota Democratic-Nonpartisan League Party.

A political career that started at 28 years of age, and has spanned over 35 years, has seen a massive shift in North Dakota’s electoral makeup. The Democratic party’s base once consisted of the elderly, the working class and small family farmers. That group has shifted almost completely over to the Republican party, replaced by working professionals as the party’s base. Democrats must now reckon with the loss of rural America as a reliable segment of their voter base. Growing up in a small North Dakota town where everyone knew their neighbor offered a glimpse in how to connect with rural voters and cut across party lines. “I think showing up, listening, and then doing something about it will help us slowly erode this partisanship that we see in rural America.”

The partisan polarization seen from Republican voters is due, in part, to ideas around identity. Swaths of the country feel judged by a more multicultural, multiethnic coalition more likely to admonish politically incorrect behavior. This has created a defensive posture and accelerated an urban-rural divide in American politics that has quickly turned states like North Dakota red.

LISTEN AND SUBSCRIBE

SPEAKER

Senator Heidi Heitkamp.jpeg

Heidi Heitkamp

Senator of the State of North Dakota

(2013-2019)

MODERATOR

anthony_scaramucci.jpeg

Anthony Scaramucci

Founder & Managing Partner

SkyBridge

EPISODE TRANSCRIPT

John Darsie: (00:08)
Hello everyone and welcome back to SALT Talks. My name is John Darcy. I'm the managing director of salt, which is a global thought leadership forum and networking platform at the intersection of finance, technology, and public policy. SALT talks are a digital interview series that we started during the pandemic with leading investors, creators, and thinkers. And what we're trying to do on these SALT Talks is replicate the experience that we provide at our global conferences, the SALT conference, which is to provide a window into the mind of subject matter experts, as well as provide a platform for what we think are big ideas that are shaping the future.

John Darsie: (00:45)
And we're very excited today to welcome Senator Heidi Heitkamp to SALT Talks. Senator Heitkamp is the first woman to be a US Senator from the state of North Dakota, and I believe during her time in office she was the only Democrat elected to a statewide office in North Dakota. She grew up in a large family in the small town of Mantador, North Dakota. Alongside her six brothers and sisters she learned the value of hard work and responsibility leading her to choose a life of public service. She worked as an attorney for the Environmental Protection Agency before serving two terms as North Dakota state tax commissioner, and two terms as North Dakota attorney general as a member of the North Dakota Democratic Non-Partisan League Party.

John Darsie: (01:30)
As attorney general, she was a leader in the national suit against the nation's four largest tobacco companies culminating in the landmark Tobacco Master Settlement Agreement which required the companies to pay restitution to the states and transform their marketing practices. Senator Heitkamp saw firsthand the slow erosion of rural support for Democrats in rural states, which lead to a landslide victory for President Donald Trump in the 2016 election. After leaving Congress she founded the One Country Project to reopen the rural dialog between voters and Democrats, and help remind Democrats that rural voters have traditionally been part of that Democratic coalition.

John Darsie: (02:09)
Just a reminder, if you have any questions for Senator Heitkamp during today's SALT Talk you can enter them in the Q&A box at the bottom of your video screen on Zoom. And hosting today's talk is Anthony Scaramucci, the founder and managing partner of SkyBridge, a global alternative investment firm. Anthony's also the chairman of SALT, and I know Anthony and Senator Heitkamp I believe on the set of The Bill Maher Show where they appeared together recently, so looking forward a great conversation, and with that I'll turn it over to Anthony for the interview.

Anthony Scaramucci: (02:39)
First of all, John, the biographical information is fantastic, but then you get to the landslide victory for President Trump. What are you talking about? There wasn't a landslide. He lost the popular vote. What are you talking about?

John Darsie: (02:52)
Among rural voters I believe was the insinuation, that in 2016 he took what was-

Anthony Scaramucci: (02:57)
We're doing a little bit of fact checking early on here, senator.

John Darsie: (03:00)
I know you're sensitive about things related to [crosstalk 00:03:01].

Anthony Scaramucci: (03:01)
I've got to watch with this guy, because he's good looking, and he's blonde, and so we've got to push him back a little bit senator. Senator, thank you so much for joining us, and congratulations on your life of public service, but I'm more interested is how did you work your way to Washington? What was your path to becoming a senator?

Heidi Heitkamp: (03:23)
It's interesting because I never wanted to go to Washington. I always thought that the best government is the local government. I served a term and a half actually as tax commissioner. I was appointed right after Kent Conrad was elected to the Senate, which is always where Kent was headed, but for me, number one, I'm not a big city girl. I love living in North Dakota, so where you live makes a whole lot of difference in your life.

Heidi Heitkamp: (03:53)
I was able to do some things when I was tax commissioner that were fairly significant, and headed up a couple of national groups. In fact, you might find this interesting, the original Quill decision, which was a state and local tax decision, I litigated the Quill decision. We got half a loaf, and it was interesting as life hands you some opportunities we were able to help get the Supreme Court to reverse the Quill decision when I was in the Senate, and I was a leader on that issue as well.

Heidi Heitkamp: (04:27)
When I moved over to the attorney general's office, North Dakota's attorney general's office is incredibly complex, from running the largest law enforcement agency called The Bureau of Criminal Investigation, to the fire marshall's office, to running the state lottery. I also in that role served on the board of director's of our state-owned bank. I really enjoyed state government, ran in 2000 for governor and lost ironically to my seat mate John Hoeven who I had hired to run the Bank of North Dakota, all politics is very personal in North Dakota, and never thought I would go to Washington DC. I thought if I would reenter it would be another run for governor.

Heidi Heitkamp: (05:12)
Looking at what was happening in Washington, the failure of people to come together, to actually form coalitions to get things done, I just said, look, somebody's got to try and change that culture, and I ran in what no one thought was a doable race, and ended up squeaking out a victory in 2012 and was able to go really as a centrist, really go as somebody whose main goal was to bring people together to solve problems.

Heidi Heitkamp: (05:41)
I had six great years, wasn't able to repeat that effort. In the time, this is something politically, and not to just ahead Anthony, but when I first started in politics I was 28 years old. I ran my first statewide race, and my base were elderly, and working class people, and small family farmers. Those are the people who always routinely voted for the Dem-NPL in North Dakota. That completely changed. By the time I was done those people were the Republican base, and the more professional folks were the Democratic base, and you see that all across the board in the United States.

Heidi Heitkamp: (06:24)
I think when we look at the opportunity that we have to have an impact if you go with a real vision of what you want to get done, and with an idea that you aren't the only person with a good idea, you're not the only person who really cares about this country, and you go with respect you can get a lot done, and I think I was able to accomplish a lot in six years. What I wasn't able to accomplish is reelection.

Anthony Scaramucci: (06:49)
But you're in a red state.

Heidi Heitkamp: (06:51)
Yeah.

Anthony Scaramucci: (06:51)
Isn't that fair to say? How did you connect with all these traditional Republican voters, and then what would be the playbook recommendation for what I would say is a blue collar base that voted for President Trump that was more traditional to the likes of a Franklin Roosevelt, a John Kennedy, a Linden Johnson, but now are voting away from Democrats? It's a two part question. How did you relate to Republicans, and how can you get that base open to the idea of returning to the Democratic Party?

Heidi Heitkamp: (07:29)
I would tell you that probably since 2006 you really saw the change happening, and that's when people like Tom Daschle and even Tom Harkin. I don't know that Tom Harkin can get reelected in Iowa today, and those kind of traditional, more populous Democrats who represented the center part of our country saw this huge realignment, and what I will say is we used to use the Tip O'Neill line "All politics is local." That's not true anymore. All politics today are national, and the party identification is awfully hard to crack.

Heidi Heitkamp: (08:14)
When Kent Conrad and Byron Dorgan, two Democratic senators ahead of me, when they won about 20% of Republicans were willing to vote for a Democrat. Now, if you look at polling it's about only four, and so what happened to those 16%? What happened to the possibility that they would in fact vote? In my case, I outperformed Hillary Clinton by 22 points, so I did better. I did get Trump voters to vote for me. The only problem is Trump won North Dakota by 36 points, so it was a pretty big headwind.

Heidi Heitkamp: (08:55)
And I think the major piece of advice that I give people is show up, but don't show up empty-handed. And one of the reasons why I was successful, and you heard in the bio, I grew up in a town of 90 people. My family was 1/10th the population. We knew that we had to work with our neighbors in order to get along, and in order to get things happening, and I think it's that kind of cooperative "I don't know all the answers Maybe you've got an answer that I haven't heard before. Let's talk about it."

Heidi Heitkamp: (09:26)
I think showing up, listening, and then doing something about it will help us slowly erode this partisanship that we see in rural America.

Anthony Scaramucci: (09:36)
I'm going to make a stipulation, senator. You can agree with me, or disagree with me, but if I'm right then I'm going to ask you to think about what we can do to improve the situation. It feels like from my vantage point, and maybe I'm wrong, that there's anger in the system. There's some populism. There's some nationalistic rage. I think it's born from economics more than anything else meaning that people feel economically desperate, and so a result of which they're in a little bit of a rebel position, or a revolt position.

Anthony Scaramucci: (10:10)
President Trump capitalized on that. He became the avatar of their anger. I'm wondering if you think I'm right about that, or wrong, and if I am right about it what can we do to put down that anger, and make those people feel more plugged into the system again?

Heidi Heitkamp: (10:30)
You and I have had this conversation. I don't think it's driven as much by economics about it is about indemnity, who am I as a person, and are you talking to me. Claire McCaskill tells a great story, and it's about a guy who was in a gas station, and he looked at Claire when she was running again, and I'm paraphrasing, and he said, "You know, Senator McCaskill I voted for you. I voted for you, and I voted for you when you were running for statewide office." He said, "But I don't know I'm going to do it again because I know that your party's for African-Americans, and your party's for the homosexuals, and your parties for this. I don't know that your party's for me."

Heidi Heitkamp: (11:11)
And I think there is this kind of sense of you judge us in a way that's not fair. We're not racist. We're just trying to make a living, and simply because we may say something that's politically incorrect and you jump all over it that just makes me feel disrespected because that's not what I intended. And so, it's a complication that involves their identity and whether they identify, and I think that's the remarkable thing about Donald Trump is you take a multimillionaire, and we could argue about that Anthony, at least you take somebody who professes to be a millionaire from New York City, and somehow he was able to get people to identify with him and have people believe he was on their side.

Heidi Heitkamp: (12:06)
And so, what was that dynamic? And there's a really interesting article in the last couple days in a political magazine about the grievance, the sense that I'm not respected, I have a gripe. And I'm not saying that it's not, Anthony, that it's not driven by some economics, but if we simply look at economics I think we miss a bigger picture which is about reflection of your values, reflection of who you are as a person, and whether that's respected.

Anthony Scaramucci: (12:40)
How do we get these different identity groups to think of themselves then senator as Americans? As opposed to an America first policy, how about all of us as Americans first whether we're from North Dakota, we're from New York City, or you pick the spot, and whatever our sexual preferences are, or the color of our skin, we identify as Americans. How do we do that?

Heidi Heitkamp: (13:06)
We do it by electing a president who reflects those values and brings people together, and that was what was so dangerous in my opinion about Donald Trump is as he pursued power through grievance he could only do that by division, and so I think that the first thing we have to do is lead by example. I've been talking to a lot of groups about one idea that I had is wouldn't it be fun to see Ben Sasse and Elizabeth Warren do a joint town hall in Nebraska and Massachusets, to actually see people as people, to see Elizabeth as a person, to see AOC as a person, but also to have people in Massachusets see Ben Sasse and maybe Tom Cotton, although I'd doubt you'd get Tom to do it, as people with ideas.

Heidi Heitkamp: (13:57)
And I think it's going to take a big national dialog, but it's going to take people doing this outside of government, and I think that's where your world comes in, so let's talk about venture capital. Let's talk about where venture capital goes. The vast, vast majority of it goes to three states. How about bringing venture capital to North Dakota and listening to entrepreneurship, and people getting to know you, or somebody allegedly from liberal New York talk about how they want to help invest and grow the country?

Heidi Heitkamp: (14:32)
And so, I think we can do it from an economic standpoint, but we've got to start seeing each other as people, not as here you are, a redhead from Mantador small town North Dakota. I may be more complicated than that, and you're more complicated than the guy from Long Island, which is where I think you're from.

Anthony Scaramucci: (14:52)
I'm definitely from Long Island.

Heidi Heitkamp: (14:55)
Long Island.

Anthony Scaramucci: (14:58)
Yeah.

Heidi Heitkamp: (14:58)
You can try my accent, Anthony. You can try.

Anthony Scaramucci: (15:03)
Let me tell you something senator, I would've gone a lot farther in life if I had that accent. Okay?

Heidi Heitkamp: (15:09)
But I think it's about seeing each other as Americans. I did a stint at Harvard with Gary Cohn, and then I did a seminar for a year at Brown, and my first introduction to my seminar was what is it to be an American, and it was fascinating what these kids would come up with. And so, I think it is if we're going to do what we need to do you're asking exactly the right question, because if you think about World War II we were defined as the greatest generation. It was the external threats, always the external threats, that we were able to coalesce behind and put aside our differences.

Heidi Heitkamp: (15:58)
My dad's best friend in the Army during World War II was an Italian-American from New York. He would never had had that experience, and we don't have those kinds of experience that unite the country to common cause, and the threats now tend to be more internal, and it's a whole different challenge that we haven't had since The Civil War.

Anthony Scaramucci: (16:24)
It's fascinating you say that, because in the Woodward and Bernstein book, the second book, Final Days, they interviewed some of the senators. It turned out that one of the senators they were interviewing was Bob Dole talking about the resignation of Richard Nixon, and the very famous scenes of Howard Baker, and other senatorial leadership, Republicans, going to President Nixon and saying, "Hey, it's over. You're going to have to resign, or we're going to pull the plug on you with an impeachment."

Anthony Scaramucci: (16:53)
What Dole said in the interview, Senator Dole, is that it was impossible for him to see his friends die in Italy while he was wounded in Italy fighting for the freedom associated with the document the US Constitution, and even though he was a stride in partisan he was an American first, and the violations of the Constitution required him in honor of his dead veterans that he served with to say that to Mr. Nixon, and we don't have that right now.

Anthony Scaramucci: (17:25)
We have people that have served in the American military that maybe have physical courage, but there are Republican veterans in that Senate that decided that they were going to just strictly stick with partisan lines. My question to you, and this goes back to our pre-Bill Maher walking onstage discussion, which is-

Heidi Heitkamp: (17:47)
About how young you look, and how I look so old? Is that the discussion for now.

Anthony Scaramucci: (17:52)
Listen. Listen. I've cornered the market on North American boat docks, so if you're nice to me when you come to my house we can go into my garage, and I can show you where all my stash is. When we were walking out onstage, prior to I said to you, "We've got some issues here in the Republican Party." We have Trumpism, and you could have smarter, or different, and perhaps even more malevolent people pick up the baton of Trumpism. How would you react to that? Do you think that that's something that could happen? Do you think Trumpism is gone? Do you think Trumpism is with us, and with us permanently? What are your thoughts there?

Heidi Heitkamp: (18:35)
I absolutely do not think that this is simply a movement, or an attitude, that's going to evaporate if the leader leaves, and I told you I think Trump is a master at communication, and so he knew that there was this ability to motivate people who hadn't voted before, or to motivate people who felt like they had been left behind, or didn't see their image in government anymore.

Heidi Heitkamp: (19:06)
I always said the most interesting thing about the rallies is they're the largest focus group ever done in American politics. He would go out, and most of his lines fell like a thud, but how did he get to build the wall? People responded to it. Lock her up. People responded to it And so, he just built on this sense of dis-affectiveness, being disaffected from government, just built on that, and wasn't very good at pivoting or at least not irritating the other side to the point where he could win reelection.

Heidi Heitkamp: (19:49)
And so, now you've got the ability to take that grievance that he has ignited, and if it's not brought down, if the temperature in this country's not brought down in terms of partisanship it's right for someone like, and I'll just name names, someone like Tom Cotton, Josh Hawley, who probably don't have the communication skills but they certainly are very, very bright individuals to step into that void. And it's interesting because as we're talking about this Josh Hawley has signed on with Bernie Sanders on a populist item, which is the direct stimulus payment.

Heidi Heitkamp: (20:31)
So clearly, not run to that fiscal conservatism that you'll see Ted Cruz grab, or perhaps Mike Lee, but going to fight for that Trump case. As Trump said, "We need a big stimulus plan. We need money being sent out." These are people who had the religion of debt and deficit before Trump ever came along, and that's fallen by the wayside. I think if you want to follow the threat of who's trying to be the next Donald Trump look to their populist rhetoric.

Anthony Scaramucci: (21:08)
It's interesting, and I'll share this with you, and you know this intuitively, but I'll confirm it. On many campaign rides on the Donald Trump candidate plain, the then candidates made an observation that his base is actually social conservatives, and fiscal-

Heidi Heitkamp: (21:27)
Liberals.

Anthony Scaramucci: (21:28)
Liberals. Exactly right. And so, the opposite of say a Wall Streeter who probably considers themselves fiscal conservatives, but social liberals, and so it's interesting that Senator Hawley is taking that position. I just want to ask a quick follow up question, and then shortly we have to turn it over to this millennial that's sitting there with those big white teeth waiting to steal the show from me, senator. He's waiting to steal the show.

Heidi Heitkamp: (21:54)
Don't let him do it. Don't let him do it.

Anthony Scaramucci: (21:54)
I'm not going to. I'm going to karate chop him in the Adam's apple when we're in the office again. Don't worry.

John Darsie: (22:00)
The show's not the only thing we're going to steal from you baby boomers.

Anthony Scaramucci: (22:05)
Oh my god.

John Darsie: (22:06)
You guys have driven the country into madness. Come on.

Anthony Scaramucci: (22:06)
Look at this. Heidi, he's going one on two.

Heidi Heitkamp: (22:10)
I have to tell you the line that I use all the time is I say my generation, a.k.a. us, the baby boomers, will be the first generation is American history that inherited from our parents and borrowed from our kids, so I don't disagree with you.

Anthony Scaramucci: (22:27)
Yeah. I think it's a shortcoming. There's no question the political establishment mishandled a very golden opportunity, but we've got to make it right, and so I want to go to that topic with you about universal base income, and livable income, livable wages. What are your thoughts there? What are the tools that we can put in place to make sure that most Americans, and let's say all Americans frankly, have decent living standards in the United States?

Heidi Heitkamp: (22:57)
Let me tell you this by story, and you'll get an idea of my attitude. When I was a senator a guy came in who had just bought a bunch of franchise restaurants in North Dakota, and we had at the time a huge problem with workforce, and I thought he wants to come in and talk about what we can to do to recruit workers, probably having a hard time [inaudible 00:23:19].

Heidi Heitkamp: (23:18)
And so, I asked him, I said, "So, what's your biggest problem?" And this guy says, "Well, it's the government." "Okay." I said, "What about the government? Is it food standards?" And he just kept saying the government, and finally he turned to me and he said, "You know what? Don't you agree with me?" And I said, "Well, let me ask you this, what do you pay your workers?" He said, "$10 an hour." I said, "Do you know what that is a year?" And I happened to know what it is, a little over $20,000.

Heidi Heitkamp: (23:50)
And I said, "Do you think they can live on that if they work 40 hours a week in their restaurant?" And he said, "That's not the kind of job it is." And I said, "But there are people working 40 hours who are putting in a full week's worth of week?" And I said, "And they qualify for food stamps, and they qualify for housing benefits, and they qualify for healthcare, so isn't true that the government's subsidizing you?"

Heidi Heitkamp: (24:19)
And we always look at what that person who is working their ass off in these kinds of jobs, and working two or three jobs, probably working 60 hours a week begging grandma to take care of the kids so the kids actually have some stability in their lives, and then we turn it on the struggling worker, and say "You need to work harder," or "You need to get retrained," or "You need to fix this." And I'm like maybe people ought to worry about how we're paying people in this country. That would be the first thing, is that we can't have wages that put people in poverty. We've got to figure that out.

Heidi Heitkamp: (24:57)
And I have a very prominent good friend who told me, "Look, you're never going to get that to happen, so you need to have the earned income tax credit." I asked Andrew Yang when I had a chance during the primaries, I asked him, I said, "Why are you doing this universal income thing when the earned income tax credit is how we've actually managed this?" And he just said it's a different way to talk about the issue because the earned income tax, which has been refundable, and been around a long time is not something people really understand very well.

Heidi Heitkamp: (25:35)
I think that we need to make a commitment to equalizing economic opportunity in this country, and it can't always fall back on the worker. We need CNAs in nursing homes, some of whom are paid $7 an hour. We need construction workers who do not need a PhD to shingle a roof, but they ought to be making a living, and they ought to have healthcare in their job. And so, I think that the first thing I would say when you said what about this I would say let's have a conversation with business America, and with employers, and talk about how we can help them pay higher wages so that people can earn their way, and it's not seen as a welfare program, because when you work 40 hours a week you shouldn't be on welfare of any kind.

Anthony Scaramucci: (26:24)
Listen, I think it's very well-said. I've got one last question, and then we're going to turn it over to our audience, and we've got a tremendous amount of audience participation. You voted somewhere between 50 and 65% alongside of President Trump, and some actually considered you further to the right then say a Susan Collins, a Senator Susan Collins from Maine, based on your voting record of course.

Anthony Scaramucci: (26:49)
How difficult is it to break from your caucus and vote based on the interest of your constituents, and is that something we'll see more of from the future Senates, or less of?

Heidi Heitkamp: (27:03)
I went there with the idea that I was going to vote my conscience, and with the exception of a couple votes I feel like I did exactly what I meant to do, so you can't always vote your constituency, and people from North Dakota would say, "What about Kavanaugh?" What I would tell people on those kinds of appointments, I said, "Yeah, you may have an opinion today, but I'm making this decision for 30 years, and so I have to use my judgment."

Heidi Heitkamp: (27:33)
And so, in most of the cases, and a lot of that voting with the president, those are all about nominations on tough votes. Let's take a look at Kavanaugh and the tax vote. I didn't vote for that tax bill, and I can defend it. My favorite quote on the tax bill was Michael Bennet who said, "Not only am I not voting for it, I wish I could vote against it twice." I thought that the tax bill was ill-conceived. I thought that we could've taken those dollars and redistributed them in a different way. I thought that it was heavy-handed by the president.

Heidi Heitkamp: (28:09)
I think his people, people like Gary would've come to some kind of compromise that would've created a stability in the tax code. What I would say is I voted my conscience, and people may say, "Well, and you got voted out by the people of North Dakota," and I said, "But at the end of the day ..." I always give the Robert Kennedy quote when he was talking to some graduates. He was talking about how privileged we are to be Americans, and educated Americans with all the benefits of this Constitution and the freedom that we have. And he said, "But remember this, you can use all of your benefit, and all of your opportunity, strictly for personal gain." He said that's what you can do in America. He said, "But remember this, history will judge you, and more importantly you will judge yourself as time goes on."

Heidi Heitkamp: (29:05)
And I think that idea of being a citizen, of caring about something bigger than yourself, you can say what you want about the Trump movement. I think they think they do care about something bigger than themselves, but I think we've got to get to that part of unifying America around the ideals that we have, and that have made this country the greatest country on the Earth since the signing of the American Constitution. I'm a big optimist, but I also think it doesn't happen without individual citizen commitment.

Anthony Scaramucci: (29:47)
Senator, it is always a pleasure to be with you, and thank you so much for doing this with us. I've got to turn it over to John now, because otherwise his agent's going to start complaining to me, and it is the end of the year. I have to resign him for next year, so go ahead Darcy.

John Darsie: (30:01)
It's in my contract. I get at least 10 minutes at the end of the interview, or I'm out, so thank you Anthony. Senator, you talked about how you don't think that it was completely an economic decision that voters made, and continue to make, when they vote for President Trump. One example is the effect that Trump's trade policies had on farmers and other rural voters in terms of direct economic impact. You maintained, or you tried to maintain, a working relationship with Trump in my view because you thought you could have an impact on him when it comes to trade policy, and you urged him to take a softer view on trade.

John Darsie: (30:38)
What was the ultimate impact of his trade policies on your constituents, and other farmers, and rural voters, and why do you think that they chose to overlook some of that potentially to continue to support the president?

Heidi Heitkamp: (30:50)
A couple things. First off, I don't think we will know that impact of this kind of bilateral take them all on at the same time, alienate our trading partners, our allies, who are both military allies and trading allies. We won't know what the impact is. I'm fairly certain it would be very dire had this president been reelected, and I maintain a different position than a lot of people in my political party. I don't think that we will be successful unless we embrace globalization.

Heidi Heitkamp: (31:23)
It doesn't mean that we get taken for a ride, or that we're suckers, it just means that we need to understand that the growing market that's out there, especially in Indochina is one that we need to have access to, and we can't walk away from it, and the only way we get access is by guaranteeing that there is enough trading partners to push back against the excesses and the wrongdoing of China, and I will put India, especially as it goes to agricultural products in that basket.

Heidi Heitkamp: (31:54)
There's a story, and I don't know how true it is, that when they were talking about trade policy they were very concerned in the administration about what would happen with farmers to which Wilbur Ross said we'll just buy them off. Billions of dollars. In fact, today about 40% of net farm income this year will come from the federal government. Farmers know that's not sustainable. We walked away from direct payments in the last farm bill, now we're right back in that soup.

Heidi Heitkamp: (32:22)
And so, to me the biggest casualty will be that we have allowed our competitors, whether it's Brazil and Argentina on soybeans and corn, whether it is looking at wheat from Australia, we have allowed our competitors to access these markets and making the markets that much more difficult to reestablish for American agriculture, and American agriculture is one of those few places in American trade that we actually run a trade surplus, so we in many ways have killed the goose that laid the golden egg, and we've got to get back to in my opinion multilateral trade discussions where we are pulling people together in a trading relationship that helps us get the best deal for in my opinion liberal democracies who want a free enterprise system, and if we don't do that we are going to continue to fall further and further behind.

John Darsie: (33:19)
Yeah. I think your views on trade are really strong, and I want to continue on that theme, especially as it relates to Anthony as well. President Trump reportedly early in his administration considered shuddering the US Export-Import Bank, and Anthony actually spent some time at the EXIM Bank prior to becoming communications director briefly, and he was also like yourself a big advocate in the president's year that we shouldn't just keep the EXIM Bank open, we should be much more aggressive in utilizing it because there're other countries, and competitors of ours, who use that type of bank very successfully to grow domestic business.

John Darsie: (33:55)
For people who don't understand what the EXIM Bank does ... Go ahead, Anthony.

Anthony Scaramucci: (33:58)
He likes bringing up my short stay in The White House because he just wants to remind all the viewers that I got fired from The White House. Well done, John. Well done.

John Darsie: (34:05)
I had to slip it in somehow. This one was actually one of the nicer references I could-

Anthony Scaramucci: (34:08)
Go ahead, senator. I just wanted to point that out to you how cruel he is. Go ahead, senator.

John Darsie: (34:14)
For people who don't know what the EXIM Bank does, and why you think we should use it more aggressively, can you just explain to our viewers everything related to your views on the EXIM Bank?

Heidi Heitkamp: (34:24)
It basically provides financing in terms of exports to guarantee that people in this country will get paid, and will basically be competitive. They do that with a lot of different mechanisms, but the one thing I want to talk about, because everybody says it's the bank of Boeing. Boeing is a big user of the EXIM Bank. It's the bank of Caterpillar, and all of these large organizations.

Heidi Heitkamp: (34:47)
The first thing I tell people is Boeing doesn't manufacturer all those parts. The largest supplier of Boeing parts for their airplanes is in Texas, and the worst trouble I had was with Ted Cruz on the EXIM Bank. I was the Democratic leader trying to get the EXIM Bank reauthorized. We actually shuddered it. Now, I don't blame Donald Trump for that. The first time I met him he asked me to come up and talk about a potential cabinet position before he was even sworn in, and you have your 10 minutes to pitch something, and I pitched of course American agriculture, and energy independence, but I pivoted pretty quickly to the EXIM Bank because I think that maintaining that infrastructure is absolutely critical.

Heidi Heitkamp: (35:33)
And it's interesting because Steve Bannon's on one side saying, "You're right. You're right," and [inaudible 00:35:38] is on the other side saying, "Paul Ryan won't like that." You could see that the battle was mainly within the Republican Party. There was some people, like Bernie Sanders is not a fan. He sees it as corporate cronyism. I see it as essential to American Jobs.

Heidi Heitkamp: (36:00)
We saw during the time that the bank was shuddered we saw GE lose jobs. We saw major companies shut down because they did not have access to an export-import financing agency in this country. It's unilateral disarmament. The bank needs to be back up, and we need to vigorously pursue economic opportunity. And if I can add one more ting, we have small manufacturers in North Dakota who would never have found an international market that they could take the risk in if it weren't for the EXIM Bank.

Heidi Heitkamp: (36:34)
Either the currency risk, or the risk that they weren't going to get paid for what they exported, and so this isn't just the bank of Boeing. This has the potential of giving access to markets for small American businesses that would never have access to market without an export-import agency.

John Darsie: (36:55)
North Dakota in particular it has another unique aspect to it in the state investment board. It's a unique institution among American states. We had Governor Phil Murphy of New Jersey on a couple weeks ago saying in New Jersey we would like to copy this basically state investment bank that exists in North Dakota here in New Jersey, but it's challenging to get it up and running.

John Darsie: (37:19)
It's something that North Dakota uses to direct strategic investments, and to help incubate businesses in the state. Do you think other states should copy this model, and how do you guys use it in North Dakota?

Heidi Heitkamp: (37:34)
The state treasurers has a tremendous responsibility in other states, not so much in North Dakota, because all of the deposits of the state of North Dakota actually go to the Bank of North Dakota, which is our state development bank. I like to call it development rather than investment, our state development bank, that is by Constitution charged with helping farmers, helping small business people, helping our organizations, and it's interesting how that has in fact morphed over time.

Heidi Heitkamp: (38:05)
Just to give people an idea, they may say "Don't the banks hate you?" No, because let's take a small community bank that has a loan limit. They're up against their loan limit, but yet this is a good credit for them. They might have to go to a competitor like Wells Fargo, or US Bank, in order to share that credit thinking I'm going to lose that customer eventually because of my partnership. They can go to the state development bank, the Bank of North Dakota, and partner.

Heidi Heitkamp: (38:36)
The Bank of North Dakota does not make direct loans unless it's authorized, and so that gives the regular financial institutions, especially the smaller community banks the kind of protection that they think is needed. We do things like when I was on the board of directors for the bank we had a pace program, which was look you can charge ... At the time I think the interest rates are probably 5%, but the Bank of North Dakota will write that down and subsidize it to keep that business in your community, or to keep that business in North Dakota.

Heidi Heitkamp: (39:07)
And so, it's been am incredible model. I think it was born out of the Populist Movement in the early 1900s. We have a Norwegian heritage which tends to be ironically more socialist, so we also own a mail-in elevator. We also own the state mail that has been very successful in recent years after we got back on good footing, and so these are institutions that are well-regarded and well-accepted, and I think give you the investment and the development tool that you need like the Export-Import Bank in a state where you can leverage these deposits of state revenue along with good banking practices to basically reinvest in your state.

John Darsie: (40:02)
To build on something you said earlier about the idea of restoring dignity to different types of jobs in America there's obviously a very bifurcated experience now that Americans are feeling, people in these coastal cities that have a wealth of venture capital investment, and financial jobs are doing pretty well overall. Financial markets are doing well. The investor class is doing well. But as you said, people viewed Donald Trump almost like an avatar for their anger at how ell everyone else is going, and how happy everybody else is with the dignity that their job brings. How do we restore that dignity?

John Darsie: (40:38)
I saw the review of your appearance at Jeff Sonnenfeld's Yale CEO Summit about how you talked about the need to restore dignity into working class jobs. How do we do that at a practical level?

Heidi Heitkamp: (40:54)
This will get me in trouble. As we're talking about what we're going to do for student loans, so it's like I'm going to pay taxes on my $80,000 a year job where I have to work overtime to earn that. I'm going to pay those taxes, and I've been saving, and maybe I put my kids through college so I can pay for somebody else's college education. I'm not saying anything about the policy. What I'm saying is sit in that chair. Sit in that chair and look at that idea from that perspective.

Heidi Heitkamp: (41:31)
It's like because you went and got a music education degree I'm going to pay for that when I worked my way up through as a journey apprentice plumber, and now I'm going to pay for your education, and it doesn't sit well, and I think there are ways that we can talk about getting equity, and getting student debt forgiveness, that don't make people feel like they're being judged, or they're being asked to subsidize something that they never took advantage of. And so, I think that-

John Darsie: (42:06)
Anthony made a similar point on Twitter, the decision-

Heidi Heitkamp: (42:09)
Who did?

John Darsie: (42:10)
... to forgive student debt, and it would only accrue benefit to a certain class of Americans.

Anthony Scaramucci: (42:17)
John, you blotched out there on the internet for a second. He was saying that I made a point about student loan forgiveness, and go ahead John. I won't interrupt.

John Darsie: (42:25)
Basically, that it only accrues to a certain segment of the population, and people who might not of pursued higher eduction did it for maybe practical reasons, so we agree with you wholeheartedly.

Heidi Heitkamp: (42:36)
Let me give you an alternative. Here's the real rub. There are people who have repaid their student loans over and over again, but because our interest rates are way too high for student debt they can't ever get it paid off. So, instead of forgiving student debt refinance at a lower interest rate, do it retroactive so people aren't being taken advantage on student debt. If in face the department of education has given student debt to a fly-by-night for-profit college took advantage of our veterans mainly, took advantage of minority populations, then look at how you're going to provide relief there when people didn't get a product and you actually put the good housekeeping seal of approval on it when you gave them the ability to do student loans, and let's take a look at forgiving for people who in fact are doing things that other people don't want to do.

Heidi Heitkamp: (43:34)
Teachers, and firefighters, and people who are engaged in ... There are so many ways to justify student debt forgiveness, but wiping it out across the board makes it looks like we're picking winners and losers in this society, and people intuitively think who's going to pay for that. I guess I'm going to pay for it when I write out my check in April. And so, I just think we need to be really ... It's true for everything in life. If you want to figure out where you can bring cohesion to society and to our politics sit for a while in someone else's chair. Sit for a while and see the world through their lens, and quit assuming you know what motivates them, and to me that's a critical part of reuniting the country.

John Darsie: (44:30)
And so, let's talk about reuniting the country very quickly because we're going overtime here, and we're so grateful for your time, senator. You wrote an op-ed recently with Cindy McCain that was published on cnn.com talking about the need to come together across bipartisan lines. President elect now Joe Biden has talked a lot about wanting to do this. He thinks that people will be surprised by how much compromise there will be in this new Senate, and in this new administration. Are you optimistic about a return to some level of bipartisan deal making, or are you cynical and you think polarization could get worse before it gets better?

Heidi Heitkamp: (45:08)
If you try and do this from Washington DC you will spin your tires, and you'll be further in the ditch, and I've said this over and over again. If you want to reunite this country get out into the country, because if y'all scurry into a room and have these discussions behind closed doors, and then everybody's mad at everybody, and they come out and they have their talking points, and "You don't care about poor people." "Well, you only care about rich people," blah, blah, blah, back and forth, you'll get nothing done.

Heidi Heitkamp: (45:41)
From my bio, you know that I'm a product of state government. I was a Democrat in a very Republican state even when I held state office, and I was able to get these things done. Sometimes they weren't always the most popular with my Republican colleagues, but we got stuff done. I always tell this story. I say in every small town in America, and probably big towns, I don't know those as well, there's a coffee table, and it's usually filled up with people from the community, mainly old guys. And I said "There's people sitting around that table, they're Democrats, and they're Republicans, and our diversity here in North Dakota they're Lutherans and Catholics, they're Green Bay fans and Viking fans," and I said, "And they'll argue the issues of the day," but that group of people will figure out how to get the Christmas lights up in the town square.

Heidi Heitkamp: (46:29)
They'll figure out how to put a roof on the church together, and it's that local we have to get it done attitude that we need to reignite, and if we don't reignite it at the local level I have no hope that it's going to happen at the national level.

John Darsie: (46:45)
Hopefully, they hear your voice in this administration and we can fix some of these problems before they spiral too far out of control. Senator Heitkamp, we're very grateful again for your time. Anthony, do you have a final word for the senator before we let her go.

Anthony Scaramucci: (46:59)
Next time we're on Bill Maher don't outshine me like that, senator, okay?

Heidi Heitkamp: (47:04)
I don't know that that happened. I don't know that that happened.

Anthony Scaramucci: (47:07)
You were like a blinding sun of wisdom and humor at a time when I needed you sedated. I just want you to know that. Merry Christmas.

Heidi Heitkamp: (47:17)
It was fun.

Anthony Scaramucci: (47:18)
It was a lot of fun. I really enjoyed it actually, and thank you so much for doing this with us.

Heidi Heitkamp: (47:23)
And the thing is, Anthony, if you from Long Island, traditionally a Republican, coming from the finance world, I come from rural America, if you and I can sit down and have a conversation and try and understand there's hope in the world, and so thank you for inviting me. It was fun to do, and I really, really enjoyed getting to know you.

Anthony Scaramucci: (47:45)
We appreciate you being on. Merry Christmas, happy holidays, to you and your family, and hopefully we'll see you in the New Year once this pandemic ebbs.

John Darsie: (47:55)
We know you're not a big city girl, but we're having a conference potentially in New York next year, and we'd love to see you there. We can show you some of the big city lights.

Anthony Scaramucci: (48:06)
She's been there more than once. You make it like she's never been there. You really lack today.

Heidi Heitkamp: (48:13)
No, it's all good. Thank you so much, John, and thank you Anthony for including me.

Anthony Scaramucci: (48:16)
Thanks, senator.

Governor Phil Murphy: Recovering From COVID-19 | SALT Talks #125

“I will forever bemoan the lack of a consistent national message that transcends politics.”

Phil Murphy is the 56th Governor of the State of New Jersey. He has signed legislation putting New Jersey on the path to a $15-an-hour minimum wage, enacted the nation’s strongest equal pay law to combat gender wage discrimination, ensured all workers have access to paid sick days, and expanded the state's Paid Family Leave provisions. From 2009-13, under President Obama, Murphy served as the U.S. Ambassador to Germany.

New Jersey was among the states, along with New York and Connecticut, hit hardest by COVID-19 early in the pandemic. This forced a series of difficult decisions around restricting indoor sports, indoor dining, concerts etc. Consistent national messaging plays a critical role getting state residents to understand the need for responsible behavior. The lack of leadership and messaging early on, when it has the most impact, continues to have negative downstream effects. This has required states like New Jersey to be aggressive in supporting small businesses hurt by the restrictions. “We have put grants, loans, capital into, I think at this point, 35,000 small businesses.”

In order to avoid a massive economic fallout, large federal stimulus is required. The moment calls for around $3 trillion in spending. State and local governments are facing budget shortfalls and federal support will allow these governments to continue employing frontline workers facing the pandemic head-on.

LISTEN AND SUBSCRIBE

SPEAKER

Governor Phil Murphy.jpeg

Phil Murphy

56th Governor of the State of New Jersey

MODERATOR

anthony_scaramucci.jpeg

Anthony Scaramucci

Founder & Managing Partner

SkyBridge

EPISODE TRANSCRIPT

John Darsie: (00:07)
Hello, everyone. Welcome back to SALT Talks. My name is John Darsie. I'm the managing director of SALT, which is a global thought leadership forum and networking platform at the intersection of finance, technology and public policy.

John Darsie: (00:22)
SALT Talks are a digital interview series that we started during this work from home period with leading investors, creators and thinkers. What we're trying to do during these SALT Talks and what we're trying to do at our global conferences is provide a window into the mind of subject matter experts as well as provide a platform for what we think are big ideas that are shaping the future.

John Darsie: (00:43)
Our guest today, we're very excited to welcome him onto SALT Talks. He is someone who has had an incredible career in business and is now leading the state of New Jersey as a governor. We're very excited today to welcome Governor Phil Murphy to SALT Talks.

John Darsie: (00:57)
Governor Murphy, as he says, grew up in a family that was middle class on a good day. He was the youngest of four children with only one parent who graduated from high school. His upbringing, where religion, a strong work ethic, education and civic awareness were pillars of his family life, shaped his values, his priorities and the leader that he is today.

John Darsie: (01:18)
Since taking office, Governor Murphy has focused on building a stronger and fairer New Jersey that works for every family. He signed legislation putting New Jersey on the path to a $15.00 an hour minimum wage, enacted the nation's strongest equal pay law to combat gender wage discrimination, and he's ensured that all workers have access to paid sick days and expanded the state's paid family leave provisions.

John Darsie: (01:44)
Governor Murphy restored state funding for Planned Parenthood and other women's health programs, including family planning services. He also made New Jersey a national leader in tackling gun violence, and has expanded protects for the state's immigrant and LGBTQ communities, among others.

John Darsie: (02:02)
Nationally, he served proudly as New Jersey's sole representative on the board of the NAACP, the world's oldest civil rights organization, and as the finance chair for the Democratic National Committee.

John Darsie: (02:14)
In 2009, he answered President Obama's call to service. And following his confirmation by the US Senate, he became the US ambassador to the Federal Republic of Germany where he served until 2013.

John Darsie: (02:26)
He's a proud product of the public school system, and he also holds degrees from Harvard University and the Wharton School of Business at the University of Pennsylvania.

John Darsie: (02:35)
Just a reminder, if you have any questions for Governor Murphy during today's SALT Talk, you can enter them in the Q & A box at the bottom of your video screen.

John Darsie: (02:43)
Hosting today's Talk is Anthony Scaramucci, the founder and managing partner of SkyBridge Capital, a global alternative investment firm. Anthony is also the chairman of SALT. Anthony's tenure in government, as I like to say when we have other public officials on, not quite as long as Governor Murphy's tenure so far in government, but we're hoping that maybe Anthony one day [crosstalk 00:03:03] can build on those 11 days that he served in the Trump Administration.

Anthony Scaramucci: (03:07)
You see how he starts out, Governor. Listen, if you have a one day program where I can be the comm's director for one day, so I can have an even dozen of days in public service, is just something I'm going to throw out there.

Anthony Scaramucci: (03:19)
It's great to see you, Governor. I know you and I both don't believe in fake news, but since I'm lying about my age, I don't want to let people know how far back you and I go. Okay, so it's nice to meet you, sir, for the first time.

Anthony Scaramucci: (03:37)
But in all seriousness, Governor Murphy and I go back about 30 years. It's certainly hard to believe. But, let's take it way back, Governor. Tell us something about yourself that we couldn't find on Wikipedia or from your very august resume.

Phil Murphy: (03:53)
John Darsie, thanks for your introduction. Anthony, it's great to be with you. You and I go back, as you say, over 30 years and it's really, really good to be with you, virtually as it is.

Phil Murphy: (04:06)
Listen, John said it. When we grew up, we were in what you would call, I think, working poor circumstances. In other words, both my parents worked. We all worked. I worked under the table as a dishwasher, in what we call a coffee shop, outside of Boston when I was 13, in the summer of 13 going on 14. So it wasn't that we weren't willing to work, we just didn't make enough money. And we were living on top of each other. But I got to tell you something, I wouldn't trade that for anything.

Phil Murphy: (04:35)
Our kitchen tables were tight, but we talked about civics, politics, union leaders, Jack Kennedy, Bobby Kennedy, Martin Luther King. I'm the youngest of four. My oldest sister would debate my dad about the Civil Rights Movement, or about the Vietnam War, about the Catholic Church. It was an incredible and tight family growing up.

Phil Murphy: (05:02)
Frankly, we, now, Tammy and I, and you go back with Tammy over 30 years as well, we have four kids and we're trying to replicate that same sort of ambience, that same sort of atmosphere of the kitchen table since we've had kids. So again, it was a great family upbringing and we're trying to do our best to give the same to our kids.

Anthony Scaramucci: (05:26)
Well, and I appreciate it. I've been to your beautiful home and met your kids. They're adorable people. God bless you for that, Governor.

Anthony Scaramucci: (05:34)
I want to go right into the COVID-19 situation. You've been one of the big leaders in terms of explaining to people what they need to do from a public health and a public safety perspective. I'd like you to talk a little bit, if you don't mind, about some of the business operation restrictions and the potentiality of school closures. What factors are going into your decision making on restrictions right now?

Anthony Scaramucci: (05:58)
I know that you shut down youth sports, indoor youth sports, temporarily until January 4th. Where do you think that goes? What factors will go into the decision of potentially reopening? Just let us into the inner sanctum of your thought process and your team.

Phil Murphy: (06:15)
Yep, all good question. Just to step back is context, and people know this, but New Jersey and New York, Connecticut got clobbered early on. We've lost well over 15,000 lives. We were scrambling. I mean, there is just no two ways about it. The country was scrambling and we certainly were in this region and the state. We beat the curve down with the help of millions of New Jerseyans, and we had a relatively peaceful summer. Remember, Anthony, we were doing most of our living outdoors where the virus is a lot less lethal.

Phil Murphy: (06:51)
We'd get back to school, you get some religious holidays, the weather gets colder, pandemic fatigue goes up. You begin this one after the other holidays of Thanksgiving, Hanukkah, Advent, Kwanzaa, Christmas, New Years. The epidemiological curve, that surges again, and we are in the thick of it again. We're printing 5,000 or more cases a day. People, sadly, are dying. Our hospitalizations are up.

Phil Murphy: (07:24)
I will just say this, it's going to get worse before it gets better. The very bad news is, the next couple of month, I think are going to be lousy in all the metrics we look at and all the sacrifices we're going to have to make. The very good news is, these vaccines are real, and they're coming, and they're coming soon. So we're going to be light years in a different place by the spring.

Phil Murphy: (07:48)
When we see transmissions, we try to be surgical. In the spring, we had no choice. We were at the edge of the abyss. We didn't know if we were going to run out of hospital beds or ventilators, so we had to shut the whole place down. I don't anticipate that, Anthony, now. Is it a possibility? Yeah, it is. But, we're trying to be much more surgical.

Phil Murphy: (08:07)
So we saw, for instance, I'll give you two examples, indoor dining late at night, people got sloppy. Restaurants, not all the cases, but many cases, started to look more like clubs. Bar seating in particular was a source of transmission. We said, okay, after 10:00 you got to shut on indoor dining. Likewise, you mentioned youth sports. We're seeing transmission, not necessarily in the sport, but in the adjacent activities, whether it's locker room, convening for a pizza in the basement afterwards, whatever it might be. We put a temporary halt, December 5th to January 2nd, on indoor sports. I hope we get back and have an indoor winter season.

Phil Murphy: (08:49)
The last thing I want to do, I've got four kids, they all play sports, I don't want to be the one that doesn't allow the high school senior to have that basketball, final basketball season or whatever the sport may be. So I don't think we have to shut the whole place down, but I have to say, everything is on the table. It's going to get tough. It's going to get worse before it gets better.

Anthony Scaramucci: (09:09)
Yeah, well, I think one of the things that you've done a great job of explaining, Governor, and I just want you to address is because you mentioned the hospital beds. Some of my friends who are libertarians say, "Well, I know the risks. Why can't I just go out and do whatever I'm going to do, and if I get it, I get it, so be it?" But I point out to them, "There is only a million hospital beds in the United States. We have over 100,000 people in those beds right now that have COVID-19."

Anthony Scaramucci: (09:34)
And so, how do we get that information out there? How do we get that level of community awareness out there, so that we are saving each other and our libertarian idea of individualism is, A, I'm going to decide to stay home to protect my family and to protect my fellow citizens?

Phil Murphy: (09:54)
Yeah. It's hard, and it's gotten harder, Anthony. That person that wants to do that, God bless them. Here is the other problem, not only can they get sick, but if they're healthy, it's less likely they'll get sick, they can still get sick, but it's less likely, but they can easily transmit the virus to somebody whose older, somebody whose got underlying healthy conditions. They can even, with their own view of what a best intentions is, they can infect someone. God forbid, and that person can get hospitalized or die. I think we have to plead, continually plead with the public megaphones that we have.

Phil Murphy: (10:35)
We've been able consistently to find common ground with the Trump Administration in our hour of need on testing, on ventilators, on bed capacity. I'll forever be grateful for that. But, I will forever bemoan the lack of a consistent national message that transcends politics. This, frankly, has nothing to do with politics. You know what? This is what your behavior has to look like. You got to wear these. They matter, not just for others, but for you. Just a consistent, national talking points, consistent national themes, policies. I bemoan the lack of that, and I think we've suffered and paid a big price from that. I hope that will change.

Phil Murphy: (11:20)
I anticipate it will change. But, in some respects, the horse is out of the barn. It's much easier to have done that early on in the pandemic when everybody was rightfully unified in their fear. They just didn't know what they were facing. The passage of time has allowed too many horses to get out of the barn. I worry that it's going to be hard to pull some of that back in.

Anthony Scaramucci: (11:45)
Well, we've had public health and safety officials on. Dr. Vivek Murthy, who is now going to go on to be the surgeon general again did say, "It is easier to slow down the curve before it gets to that exponential hockey stick than it is to now bend the curve."

Phil Murphy: (12:03)
Yeah.

Anthony Scaramucci: (12:03)
But with that, you were talking about vaccines, Governor. What is New Jersey's plan for rolling out the vaccine, including the education to ensure the mass adoption of that vaccine?

Phil Murphy: (12:15)
Yeah. I mean, that last point is a big one. We've got a big anti-vax block in our state as there is in every state. We certainly have it here. They're unified and they are loud. By the way, not lately, Anthony, but the past couple of months has been pretty much politics free in our deliberations on the vaccine. But in the summer, into the early sort of into Labor Day, a little bit too much political noise around the vaccines as it relates to the election. There was some amount of noise. We probably still have some amount of folks who are recoiling from that.

Phil Murphy: (12:54)
I, personally, think it's, the vaccine development has been nothing short of miraculous. It's safe, based on everything we know. So we've started a public campaign already. Our aspiration is to get 77.0% of our state vaccinated. That's a reach, but we're going to try. We'll get our first batch within a week, if it goes well at the FDA for the emergency use authorization. We'll begin getting the Pfizer vaccine first and then Moderna. Each week, we'll get larger and larger doses. We've submitted our plan. It's now fine tuned down to literally where it's going to get drop shipped.

Phil Murphy: (13:40)
Health care workers and long term care residents and staff are the first priorities. And then we'll go from there, vulnerable communities, other essential frontline workers. I think, Anthony, by April, May, we have a wide availability to anybody in our state who wants a vaccine. And that, to me, is a complete game changer.

Anthony Scaramucci: (14:04)
So while we're rolling this out, and I appreciate your optimism, I share your optimism, Governor, tell us what New Jersey is doing to help small businesses during the pandemic. I know you as a business person who is an incredibly strong, business-minded progressive. Would that be a fair description of how you see yourself, Governor?

Phil Murphy: (14:28)
I think that's right. I mean, I call myself a pro-growth progressive, which is a different way of saying that.

Anthony Scaramucci: (14:35)
Yeah, exactly. So what are we doing for these small businesses, sir?

Phil Murphy: (14:38)
So they've been crushed. That's not news, but that's a fact, especially the restaurant hospitality sector. I think, frankly, I'm not trying to pat myself on the back because the small business experience this year has been awful, but I'd put our record up against any American State. We have put grants, loans, literally, capital into, I think at this point, 35,000 small businesses.

Phil Murphy: (15:13)
The overwhelming amount of those funds have come out of CRF, or Coronavirus Relief Funds that we have deployed into small businesses. And so we've got, as I say, the 35,000 or more. I speak to these business owners all the time. It's been a godsend, a life line. But, and the big but is, we need, not just a vaccine, but we need multiples of that. And that gives me the opportunity to get on both knees and beg for a big, federal stimulus bill.

Phil Murphy: (15:49)
You and I were texting back in the spring. I had seen you on television and you were in the, as I recall, the three trillion dollar neighborhood. I continue to think this is a three trillion dollar moment.

Anthony Scaramucci: (16:05)
Yeah.

Phil Murphy: (16:06)
It's not a $900 billion dollar moment. I'm grateful for that. I'm grateful for folks coming together. And believe me, I'll take it. But, we need more. And if you're unemployed, if you're a small business, if you're a restaurant in particular, if you're a state that's got to keep a budget and keep employment of frontline workers who are delivering services or a local budget, the local governments, at so many levels, we still need a big federal moment that meets the moment that this pandemic has presented us.

Anthony Scaramucci: (16:40)
Well, I appreciate you remembering that, Governor because John Darsie and I did the economic analysis. These stimuluses need to be way bigger. Just imagine if we had a homeland invasion of a sovereign government with its army that killed 280,000 Americans, was killing 2,000 or 1,800 Americans a day, but wounding 150 to 200,000 Americans, what type of response would we have from the government? And that gives you the sense or the scale that I think we need. I agree with you.

Anthony Scaramucci: (17:13)
I want to talk a little bit about what's afflicting, not just the State of New Jersey, I would say, the Northeast. It would also be California. It is the tax changes that took place in 2017 with the SALT tax reduction, and also now that put pressure on the states, and the new taxes that you've had to impose to try to help close the deficit there.

Anthony Scaramucci: (17:38)
We are seeing some predictions of migration. Our old employer, Goldman Sachs, as an example, where you were once a partner, considering moving the wealth management business or the asset management business to South Florida. What are your thoughts on all this? What are your predictions about the potential migration? How do you plan to keep businesses and workers in the State of New Jersey?

Phil Murphy: (18:00)
It's funny. When I heard, was listening to John Darsie in your introduction and when I see your name and I see SALT besides you, I think always, they got to come up with a different name on the cap on the state and local tax deductions. So you're hit in a drive-by shooting, innocent bystander.

Anthony Scaramucci: (18:21)
Right.

Phil Murphy: (18:22)
Listen, we're going to continue to do everything we can to get that cap lifted. Let me just say that specifically. It's damaging as heck, and it's not just New Jersey. It's crushed us. I didn't like it. I don't like it. I'll continue to do everything I can to get it lifted. And so, that's a specific answer to that. It was a huge blunder as a federal tax policy. It happened before I got here. So I got elected in November of '17. That happened in Washington in December of '17, and I was sworn in, in January of '18.

Phil Murphy: (19:07)
Having said that, we bill ourselves as the number one state in America to raise a family. It's my job to make sure that folks see the value in what they pay and what they get back for that. So we have the number one public education system in America two years running. We have the number one or two, depending on which metric you look at, health care system in America. We have the highest number of PhDs and scientists per square mile of anywhere in the world. We have a location second to none.

Phil Murphy: (19:44)
I was at a state visit in India last year. It feels like 20 years ago. When I sell New Jersey, I sell two words, talent and location. If you look at our administration, that's where our overwhelming amount of our investment has been, including in a dire fiscal budget reality that we're going through right now. We've ring-fenced education, workforce development, higher ed support as well as infrastructure.

Phil Murphy: (20:13)
Today, Anthony, I just was outside. I crossed the street at Newark Penn Station talking about the beginning, right now, of rehabilitating and bringing back to life the beautiful, what was the beautiful Newark Penn Station, seventh busiest rail station in America, which has been left to go for far too long. So we're all in on that.

Phil Murphy: (20:37)
The pandemic has had a wrinkle. I have to say this. So in other words, if you're working and you've got kids you want to get educated, we want to be either a state or the state of choice for you, quality of life, school, convenience, commuting, health care, you name it. The pandemic has added a dimension to this, which is fascinating. You've seen this. You see a lot of folks rejecting a vertical work environment, or a vertical living environment, or an urban environment period. And then not, in fact, going to South Carolina or Florida, particularly if they've got kids that they want to get education and particularly if headquarters remain in New York or Philadelphia. By the way, I do nothing but root for the success of New York City and Philadelphia, because in so many respect as they go, we go.

Phil Murphy: (21:35)
But this whole notion of, I want a backyard, of working at home, at least for another six months or a year, I want to get my kids educated, we have seen an enormous influx of people into New Jersey, particularly in the Metro New York and Metro Philadelphia counties. Houses are flying off the market. Again, is it temporary? Is it permanent? I'm not smart enough to know. And again, we wish nothing but success for the New York and Philadelphias of the world. But, that is a dimension that if you and I were talking nine months ago, we still had a lot of people coming here, but the acceleration is really, really striking over the past nine months.

Anthony Scaramucci: (22:23)
It's not going to surprise you, Governor, I don't talk to the president anymore. But, when I was talking to him and we brought up the tax situation, I don't say this as a blue state or I just want to fortify some of the things you're thinking about, what I said to President Trump is that these states are the fountain of innovation and economic growth for the entire country. And so, that tax policy depleting those states, causing a migration of intellectual capital, you're going to have a domino effect into the rest of the nation that you're not going to like, because those states are equipped to handle the influx of immigration and all the great intellectual capital that springs from immigration. Needless to say, he didn't agree with me, but I just thought I would point that out.

Phil Murphy: (23:09)
Listen, that's a well, as usual, a well reasoned argument. And I agree 100% with you.

Anthony Scaramucci: (23:15)
We got to be careful with this economic innovation, particularly with those blue states. Having the safety net is so important for those states.

Phil Murphy: (23:22)
You bet.

Anthony Scaramucci: (23:23)
I have two more questions before I turn it over to John Darsie, who is going to try to outshine the two of us, Governor. So you got to turn it up a notch, because I don't want Darsie coming in with all that millennial youth-

Phil Murphy: (23:35)
No, no.

Anthony Scaramucci: (23:35)
... and trying to power us, okay.

Phil Murphy: (23:37)
We got to channel Tom Brady and Drew Brees and Eric Rodgers and some of the older lions who are still on the field.

Anthony Scaramucci: (23:44)
Exactly. That's what I'm all about. I guess, we got 74 million people that voted for President Trump. I guess, because I voted for him in 2016 and I pad my explanation there, but I'm worried. I [inaudible 00:24:04] very candid about that. Those 74 million people are not deplorables, they're not racists. You grew up with those people, sir. I grew up with those people. My parents were not educated as well, and I grew up in a blue collar neighborhood.

Anthony Scaramucci: (24:20)
What do we say to those 74 million people? Why are they supporting him? What can more benevolent politicians do to better communicate to those voters to bring them back into the fold where they don't feel as left out, or as President Trump described this weekend, as victims in our society? What do we do?

Phil Murphy: (24:45)
Yeah. We ignore that number, Anthony, at our peril. As a nation, certainly as a Democratic Party, but as a nation, we ignore it at our peril. Those are people who are screaming out for help, in my opinion. They've been victims of probably any number of mega trends that have swept through our country and the world over the past couple of decades. On my list would be trade policy shifting somewhat, if not largely related, shifting of manufacturing in the world, technology, to pick some mega trends. These folks are screaming out. They want help. President Trump or candidate Trump in 2016 said, I'll be that guy.

Phil Murphy: (25:39)
I think it is striking in a reelection that he got more votes. We ignore that at our peril. Even if we question, as I do, whether or not his policies, in fact helped or impaired their lives, he was able to convince them, to the tune of 74 million people, that he was their guy, not just the first time, but the second time. And that, to me, is far more relevant than what he did in 2016, right. In 2020, he's running on a four year track record. And so, I think it's got to be a moment of reckoning for our country and certainly for our party.

Phil Murphy: (26:21)
I do think if we were to have from central casting a guy who is elected from our party, at least, as president who has lived that life himself, whose grown up in it like you and I did, and I think even more importantly, has led by example in now what is almost five decades of public service, I think we couldn't have, again, I'll say selfishly as a Democrat, but I think as America, a better incoming president than Joe Biden.

Phil Murphy: (26:55)
But, I think this has got to be all in on an economic program that is real, that includes workforce development, that looks around the corner and gets out ahead of the next mega trend. In other words, that not only are we dragging, being dragged by the trends that have swept through us like trade and an exodus of manufacturing, huge hurt among our farmers... By the way, I'm governor of the Garden State. We're the densest state in America. We still have a proud agricultural industry and they have suffered. I just think we need a whole new...

Phil Murphy: (27:44)
What is it right now in America like to be in a working family, particularly a working poor family? And what are the steps we can take together, parking the partisan stuff at the door, that goes directly into helping these people's lives get better? I think this has got to be an all in moment.

Anthony Scaramucci: (28:08)
Well said, Governor. My last question, from 2009 to 2013, you served with great distinction as the US ambassador to Germany. How would you describe our alliances right now in Europe and across the world? What would your recommendation be to the Biden Administration in terms of your observation, your first-hand observation of those alliances?

Phil Murphy: (28:37)
The alliances are, without question, frayed. They've been damaged, but they're not destroyed. I'd love to think there is a light switch that can be applied to getting those alliances immediately back to where they need to be, but I think that's naïve. I think it will take time. Anthony, these are both bilateral alliances, such as the US Germany, but also the multilateral organizations like NATO and the World Health Organization and the World Trade Organization, et cetera.

Phil Murphy: (29:14)
The other observation I would make is, and I know Joe Biden knows this and his team, which is an outstanding team, it's not just your father's Oldsmobile anymore. It's not 2016 anymore. You have to account for the four years that have interceded, good, bad, and otherwise.

Phil Murphy: (29:35)
By the way, I'll give you one example where I've been thematically with President Trump and that is that China can't have it both ways. I have not liked the tactics. I've not agreed with his tactics. But, the thrust of making China play by the rules was the right intention. I think the execution is where there was a challenge.

Phil Murphy: (30:03)
But, I want to see strengthening. I think you'll get the symbols as well as the substance very early on from who will be then President Biden, a strengthening in the TransAtlantic relationship, strengthening our engagement with NATO, and then strengthening the particular alliances with our best allies. Germany, high on that list, Angela Merkel. Many things in the world change. It turns out, over the past 15 years, the one thing that doesn't is Angela Merkel. That's where I would start. I'm biased. Obviously, I'm a big fan of hers. But, we got to get back at it.

Phil Murphy: (30:44)
By the way, last comment, we wouldn't do what I've just said because it's nice to do or it's good for them. What I've just suggested, strengthening those relationships and alliance, is in our cold-blooded, national, selfish interests, and that's why we should do it.

Anthony Scaramucci: (31:02)
When I travel to Germany, Governor, the joke in Germany is, school boys say all over Germany, "Is it possible for a man to become leader of this country?" That's what they ask in Germany. [crosstalk 00:31:14].

Phil Murphy: (31:16)
Time will tell.

Anthony Scaramucci: (31:17)
Yeah. Time will tell, exactly right. And so with that, I'm going to turn it over to my least favorite millennial, okay.

John Darsie: (31:24)
Thank you, Anthony.

Anthony Scaramucci: (31:24)
There are many millennials on my list that are higher than you, John. I'm just kidding.

John Darsie: (31:29)
I probably deserve that for all of the torment that I give you on these SALT Talks.

Anthony Scaramucci: (31:34)
It's all good. Okay, go ahead, fire away at the Governor.

John Darsie: (31:37)
Yeah, just a personal anecdote, Governor. My wife's family is in the real estate development business. Traditionally, invested in New York City, but they have now shifted a lot of that investment to Monmouth County, New Jersey. They're very grateful for your pro-growth leadership-

Phil Murphy: (31:50)
Wow!

John Darsie: (31:50)
... in places like Asbury Park that was once one of the great cities of the East Coast and is now back on the rise. We're seeing a lot of great towns and cities in New Jersey continue to grow. It's very exciting to see.

Phil Murphy: (32:01)
John, three quick things. I sent a note to the mayor of Asbury Park, John Moor, this morning just to check in on him. It's a great community. Secondly, I live in Monmouth County, so thank your in-laws for that. And thirdly, I think we're at long last very close to having a incentives package that's smart, forward leaning, works for everybody, not just for some. And I think that will spur further development in the state.

John Darsie: (32:26)
Yeah. I mean, they're shifting investment to places like Austin, Texas and Asbury Park, New Jersey, not necessarily Florida and Texas only. They view New Jersey as a place that has a lot of secular factors. It's close to New York City, but also provides a lot of other great benefits to residents and businesses that want to set up there.

Phil Murphy: (32:44)
Amen.

John Darsie: (32:44)
So a very exciting time to be involved with the State of New Jersey.

John Darsie: (32:48)
I want to talk about Vice President Biden, or now President-elect Biden. I view you guys in somewhat of a similar light, in that, you're dealmakers. You're very good at getting in the room and convincing people to come up with common sense solutions. What do you expect the Biden Administration to prioritize in its first 100 days? And if you were the policy czar, let's say, in the Biden Administration, what would you push the administration to focus on early on?

Phil Murphy: (33:15)
So I'll leave aside foreign policy for a second, John, in answering this because among other things, we just, Anthony and I just talked about that. But obviously, strengthening our alliances would be high on the list. But, I'll put that aside.

Phil Murphy: (33:29)
The President-elect and I had a good conversation on Saturday night, so a couple of nights ago. I think there are three big ones. It seems to me, get a hold of the pandemic with that consistent, national set of policies and talking points, "This is what we're going to do. This is what we're about values-based," so pandemic. Federal stimulus, I think no matter what happens between now and January 20. I was just on the phone with Speaker Pelosi. And again, I'll take anything right now, and I applaud the folks trying to get a deal done. But, no matter what it is, it's going to be only a fraction of what we're going to need. So if it's $900 billion, we're going to need two or three times that, so stimulus. And I think, thirdly, infrastructure.

Phil Murphy: (34:22)
President Trump or President-elect Trump when he came in, he wasn't my guy, but I said, "Listen, the one area," which he talks a really strong game, "where I can see common ground is infrastructure." Unfortunately, that has largely been just that. That's largely been a talking piece. It hasn't been a big substantive part of his agenda.

Phil Murphy: (34:46)
I am thankful that he greenlighted a very big bridge project in New Jersey, which is part of the broader Gateway project. But I think the Biden Administration will get all over infrastructure, all over the entirety of the Gateway project, which is a game changer for the Northeast Corridor, including for New Jersey. So that's my big holy trinity, putting alliances and foreign policy aside, pandemic, stimulus, infrastructure.

John Darsie: (35:17)
So you have a business background. You're a pro-growth progressive. How quickly do you expect the economy to start to normalize once the vaccine takes hold? I think, we're expecting the vaccine to be administered pretty heavily late Q1 into Q2 and into the second half of next year, potentially have a lot of the population vaccinated to the point where we can get back to some level of normalcy. From an economic perspective, what do you expect the economic recovery to look like starting in the second half of next year into the next several years?

Phil Murphy: (35:50)
I will tell you, I was going to ask Anthony this as well. I'd love yours, John, your opinion and Anthony's on this. I think you see a significant bounce slash spike if the public health trajectory goes as we're talking about. So everything from a very bad couple of months, but vials begin to be delivered next week, through broad access to a vaccine by April, May, I think you see a very significant bounce, spike up in Q2 and Q3.

Phil Murphy: (36:24)
You'll probably then stabilize at some level, which is still, I would guess, for a couple of years at least trying to get back completely on our feet. So again, a spike up and then a fairly static period of moderate finding our way that I think could be a couple of years.

John Darsie: (36:53)
Can we avoid it being K-shaped? There is a lot of talk about a K-shape recovery. How do we avoid leaving so many more people behind that are already disillusioned and might have led them to vote for someone like President Trump?

Phil Murphy: (37:03)
Yeah. I've said this many times and I'll say it again with you guys, history will not be unkind if we overshoot with federal stimulus. I think it'll be brutally unkind, not just to the historians, but to the individuals if we undershoot. And that includes millions, tens of millions of the folks who voted for President Trump who deserve a better shake, who deserve a better path forward as workers and as members of working families.

Phil Murphy: (37:35)
I'm a big union guy. I have to say that up front. I believe that unions, their strength and/or diminution, correlate almost 100% with the strength of our middle class in our state, in our country. So I think federal stimulus that is not just big in the here and now, but that the federal government plays the right kind of role in guiding a better future for those working families, workforce development, increase in minimum wage, a fair deal for our farmers in rural communities, those are elements of a longer set of policy agenda that I think we need to be all over.

John Darsie: (38:19)
You campaigned on the idea of creating a statewide investment bank of sorts. We actually had a SALT Talks panel a few weeks ago with some municipal investing experts who talked about the benefits, potentially, of creating a sovereign wealth fund type of apparatus at the federal level as well. Just for people who don't understand what that would mean, what would be the benefit of both a state and federal level investment institution that thought about things at a more macro level?

Phil Murphy: (38:47)
Anthony, these questions from John are really good. I just want you to know that.

John Darsie: (38:50)
This happens every time, Governor. Everyone is [crosstalk 00:38:52] very bored at the beginning, and then I get to come in and ask the intelligent questions.

Anthony Scaramucci: (38:57)
Let me tell you something, Governor. I'm trying to help the kid out, okay.

Phil Murphy: (39:00)
I know. I know.

Anthony Scaramucci: (39:01)
Look at his haircut. Look at the way he's dressed without the tie. I am trying to help the guy out.

Phil Murphy: (39:06)
You guys should [crosstalk 00:39:08] go on the road.

Anthony Scaramucci: (39:09)
I had to feed him some of the good stuff.

Phil Murphy: (39:11)
There you go.

Anthony Scaramucci: (39:12)
Keep rubbing it in, John.

Phil Murphy: (39:14)
So listen, I can't [crosstalk 00:39:16].

John Darsie: (39:15)
Let the Governor get in.

Anthony Scaramucci: (39:16)
By the way, like at Goldman, bonus season is just around the corner. The kid [crosstalk 00:39:19]. I just wanted you to know that.

Phil Murphy: (39:22)
This explains a lot.

Anthony Scaramucci: (39:23)
I'll be calling you, Governor to discuss his compensation when this is over.

Phil Murphy: (39:27)
There you go. So John, I'll speak to the state level. The public bank is an idea I still like a lot. In fact, we've had a group that's a standing commission trying to work through the, work the kinks out for over a year at this point. The pandemic has slowed us a little bit. It's more complicated than I ever would have hoped.

Phil Murphy: (39:47)
The place that's done it, and they've done it for over 100 years, is North Dakota, of all places. It doesn't look anything like New Jersey, but this is an idea that we love. It's not an anti this or that. It's not a political statement. I think it's filled with a lot of smart logic. And it's the following, when folks pay their taxes or they pay their fees, if it isn't to a local community bank, and we're all in on supporting our local community banks, it inevitably is into one of the big money center banks. The money goes. It sits there. The banks uses it like banks should and have a right to, to then build a loan book out of those deposits.

Phil Murphy: (40:34)
The problem is, the money goes out to sit in the deposits. The loan book that is built from those deposits rarely comes close to returning the favor back into lending to projects in New Jersey.

John Darsie: (40:49)
Right.

Phil Murphy: (40:49)
And so, the idea is a simple one. Yet, you have a walled off institution that's basically owned by our citizens, by our taxpayers. You load in the deposits, and then that bank makes... has a book of business that is lending into small businesses. Student loans, which is where the North Dakota experience really was the most impressive, it's small scale infrastructure, so not big Gateway projects, but small community based stuff. I did love it. I do love it. I will always love it. It's harder to get set up for reasons I won't get into, but we still are committed to doing everything we can to at least try to get that done.

John Darsie: (41:37)
My last question before we let you go. So obviously, the pandemic has created a lot of budgetary challenges at the state and local level that we're going to have to confront as part of these packages that are in Congress right now, these stimulus packages or recovery packages. But, there is also things that we can do organically that can help states shore up some of these budget shortfalls. One of them is potentially marijuana legalization.

John Darsie: (42:02)
You've been a proponent of legalization of marijuana for recreational purposes. Let's talk about recreational marijuana legalization as well as other things that you think should happen at the state and local level, obviously with federal blessing, to help shore up some of these budget shortfalls we're seeing at the state level.

Phil Murphy: (42:19)
Yeah. I'll be brief, because I know our, the clock is running overtime. It's something I campaigned on. It's something we've been trying to get done. And at long last, it's actually happening. I didn't get there though because of the budget. I got there because of social justice or social injustice.

Phil Murphy: (42:36)
I inherited a state with the widest white non-white gap of persons incarcerated in America, and the overwhelmingly biggest reason were low end drug offenses. So we tried to get it done legislatively, came close, couldn't get it done. We put it on the ballot. It passed overwhelmingly in November. Literally Friday, so four days ago, the legislative leadership and I ironed out the last details of the enabling legislation that we need. God willing that'll get done in the next couple of weeks.

Phil Murphy: (43:10)
We're beginning to set a commission up that will then oversee the beginning of the industry. We've had a very successful three year run with our medical marijuana industry. It was set up years ago, but it was left to really stagnate. We've grown that aggressively. This commission will oversee both medical and recreational. My guess is mid-summer into the fall where we'll first start to see access to this.

Phil Murphy: (43:39)
We'll address social injustices. We'll control the rules of the game, not criminal interests. And by the way, to your question, we'll raise some money, revenue for the state and create a lot of good jobs. So I think it's a win-win-win.

John Darsie: (43:55)
Well, Governor Murphy, we're very grateful for you taking time out of your day to join us on SALT Talks and get the message out about the COVID situation as well as other things you're doing in New Jersey that we think could be adopted at the national level and among other states to increase growth and keep people safe. So thank you so much.

Phil Murphy: (44:12)
John, thank you. Anthony, thank you guys very much for having me, a real treat.

Anthony Scaramucci: (44:17)
Governor, all the best. Merry Christmas to you. Happy Holidays to everybody. Thank you.

Phil Murphy: (44:21)
Likewise.

Anthony Scaramucci: (44:22)
Thanks for coming on.

Phil Murphy: (44:23)
My honor. Thanks for having me.

Amal Dokhan: The Importance of Resilience | SALT Talks #120

“Human behavior gives you the right information that will actually create the solution.”

Amal Dokhan is CEO of Global Entrepreneurship Network (GEN) Saudi Arabia. Dokhan is one of the early innovation and entrepreneurship educators and facilitators in the MENA region.

A Stanford course in design thinking offered a simple yet profound lesson for marketers and entrepreneurs: by focusing on the underlying human motivations, one can determine the solution. It requires a methodology to process and ultimately apply, but human behavior provides the most powerful data points for any business. “[Design thinking] will change something in the way you actually address problems, in the way you address strategies and the way you understand designing anything in life, even within a small organization.”

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SPEAKER

Amal Dokhan.jpeg

Amal Dokhan

Chief Executive Officer

GEN Saudi

MODERATOR

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Anthony Scaramucci

Founder & Managing Partner

SkyBridge

EPISODE TRANSCRIPT

Rachel Pether: (00:08)
Hi, everyone, and welcome back to SALT Talks. My name is Rachel Pether, and I'm a senior advisor to Skybridge Capital based in Abu Dhabi, as well as being the MC for SALT, a thought leadership forum and networking platform that encompasses finance, technology and politics. SALT Talks, as many of you know, is a series of digital interviews with some of the world's foremost investors, creators and thinkers. And just as we do at our global SALT conference series, we aim to empower really big important ideas and provide our audience a window into the mind of subject matter experts.

Rachel Pether: (00:45)
Today, we'll be focusing on innovation and entrepreneurship in the MENA region. And I'm very excited to be joined by Amal Dokhan, the CEO of Global Entrepreneurship Saudi Arabia. Amal is one of the early innovation and entrepreneurship educators in the Middle East. She's managed multiple startup and corporate accelerators in Saudi, leading thousands of entrepreneurs to commercialize their ideas and access the market. Amal has studied at both MIT and the University of California Berkeley, and she is a frequent speaker at conferences around the globe. So Amal, thanks so much for joining us today.

Amal Dokhan: (01:24)
Thank you so much for the invitation. I'm very pleased to be here today.

Rachel Pether: (01:29)
No, we're really excited to have you on and we've had a discussion previously, and you have such an interesting background. So maybe you can tell me a bit about your personal story and your upbringing.

Amal Dokhan: (01:41)
Sure. I mean I started obviously, not in the place where I am today, and not completely connected to it. So I started in the education field for about 10 years. And maybe starting in the education would give you a lot of skills that nobody would actually think it may relate to entrepreneurship or innovation at some point in life, but to me, everything is connected. I think after that period of time, I moved to study business in 2009 in Dubai. And I think through doing that master's degree, it started to open something different and I started the first company, and then the second company. And then so I moved actually to seed funding at King Abdullah University of Science and Technology. And I think from that, it was the platform moving forward to what I do today.

Amal Dokhan: (02:34)
But I mean, at the early childhood, that's part of something that I said in one of the TED Talks. I was diagnosed with a thyroid cancer at that age, and living through that over the years made me want to do so many stuff and made me want to achieve so many stuff. And maybe that's where that problem kind of solutions type of thinking, it's like that there's always a way out of any situation, but years passed by and today, all I do is basically work with startups, with entrepreneurs in the MENA region, and to do programs with, around VCs and around angel investors, and all of that. So I know sometimes things don't look really connected, but maybe somehow they are.

Rachel Pether: (03:26)
No, I love those points that you made about everything being connected. And also thank you for sharing that personal story of yours. Now, I know that you did a really interesting course at Stanford on design thinking. So maybe tell me a bit more about that, and some of the key learnings and then we can look at the applications of those and how you've incorporated them now.

Amal Dokhan: (03:46)
Sure. So in the early 2013 or 14, I actually joined a course in design thinking. I think what was interesting about that course is I went there really not expecting anything in particular. It just excited me because my master's was in strategic marketing. And I actually recommended that this is a great course for marketers. So at that time, I just started working at the Entrepreneurship Center. And I think what fascinated me is how simple is the idea of focusing on the main reasons of why everything happens, and how it could derive solutions that could basically change communities and it could change societies and it could create these solutions that we all look for.

Amal Dokhan: (04:31)
And there is really no mystery about it, because it is all about the data collection that you get. And I think the methodology of design thinking could change anybody if they understood it the right way, understanding that human behavior is the source of it all. Human behavior gives you the right information that will actually create the solution. It will help you to figure out what they need, what are their pains, what is the source of the reasons of why they act and behave in a particular way, and it will become your compass of identifying the needs of these people.

Amal Dokhan: (05:08)
And it's like when people receive the solutions, like, "Oh my God, that's it. It feels like it was meant for me." They just made it because they realize why I do this. And it's not just the statement. Actually, most of the big companies and the successful startups, they understand the value of understanding the social part, the behavioral part, the emotional part of why people do it. So that was the initial exposure to the methodology. And what actually shocked me a lot is when I went there, and I saw that in the same course, we were 72 people that I've seen companies for, like Google, for example and 3M. And I was like, "These are companies that we look at like idols." They're the source of innovation, and why would they send their people to get such a course?

Amal Dokhan: (05:57)
And my coach was actually from General Electric. So it was interesting to understand, it just changed so much that this innovation piece and design thinking in particular, is something that anybody can use at any place at any phase of life. And it will change something in the way you actually address problems, in the way you address strategies and the way you understand designing anything in life, even within a small organization. And it will certainly get you to better results in a shorter amount of time, with much more efficient budget, and producing simply very feasible and viable solutions.

Amal Dokhan: (06:39)
And I think that's what I brought back with me when I came back to Saudi was not just the methodology. It was just a shift in the mindset, that when I came back, I would remember I was still jet lagged. And I arrived to my team, and they said, "Why did you come to the office?" I said, "I just got something amazing. We're going to start working on new programs now. We're going to turn things around." And I think that's how things have served later on, when we started working in KAUST, together towards creating different solutions for the community, and for corporates, and even for university students as well.

Rachel Pether: (07:19)
That's great. And I completely agree, you don't need to be an official entrepreneur to have this entrepreneurial mindset. And I do want to dive a bit deeper into what the Saudi market looks like now. And it's grabbed a lot of headlines with the PIF and the SoftBank Vision Fund, and some of the other mega funds, but you went back to KAUST in I believe, like 2013, and it was very progressive back then for the them to be thinking in this way. So what kind of drove that approach seven years ago, before it had really taken off in Saudi Arabia?

Amal Dokhan: (07:54)
Well, I think Abdullah University's built on science and research. So it's progressive in the way it was built basically. And it was an ultimate dream to change the norms and everything we do in Saudi Arabia and the region, and to reflect that image about Saudi Arabia and about the efforts that are being done as well. And I think what's interesting about KAUST is it contained all and it ticked probably all the right boxes at that time, because, first of all, you've got multiple nationalities that are studying there. So you don't have really an overcapacity of a certain country over the other. You've got everyone, you've got the Far East, you've got U.S., you've got Europe, and all these students in one place, something must happen with diversity.

Amal Dokhan: (08:42)
And that's probably one of the major things that we really need when it comes to innovation and getting these ideas. I think the second point is the fact that these people are trying to change the norms and push the frontiers in certain matters in research that are progressive again, like in terms of agriculture, in terms of biotechnology and water solutions. You're talking of solar and clean tech.

Amal Dokhan: (09:10)
So I think it's built on innovation by nature and by design. And that kind of diversity started to produce a lot of research and a lot of intellectual properties. And maybe at that time when I came to KAUST, there was an Entrepreneurship Center, but we had no accelerator at that time. And it was a very good time where I actually came there because there was a lot of talks. It's like, how do we commercialize the ideas? There's great solutions that are being developed in the labs. There is wonderful minds and brains that are working together. How do we bring this to the market?

Amal Dokhan: (09:49)
And the solution came as through finding a mechanism of commercialization and the vehicle was the Entrepreneurship Center and basically, the accelerator programs which didn't start like that, it started with a program and a course, the ones who came at the beginning, they used to apply for the Seed Fund department. And I think that's a great thing, because they used to provide that seed funding for these companies.

Amal Dokhan: (10:14)
This whole thing evolved over time to create the accelerators that formerly actually is working and operating until today. But KAUST has a unique face that it was unique by design, people looked at it as an inspiring beacon in the kingdom as a new way of doing education, coed at that time, we didn't have coed in other places as well. And then it's a different way of managing it. And it was in a beautiful space over the sea, like the classrooms would have a view over the shore, the Red Sea. And you're doing research on the Red Sea. So you're doing the marine research, you're actually doing the water desalination. So you've got the sources, you're not really doing something that's not practical. It's pure practicality.

Amal Dokhan: (11:02)
And then you've got Jeddah is the closest city and maybe other cities where you can experiment. So I think it's just about ticking some of the red boxes that have created this kind of vibrant place that simply inspired people by nature, and it became a destination as people came to Saudi, it could be politicians, it could be even scholars. Any kind of guest would come and visit KAUST at that time.

Amal Dokhan: (11:28)
So it was by design something inspiring to people, and we just filled the blocks by the programs, by the things that we've designed later on. And one interesting thing, everyone used to say, "How are you going to let people dry for one hour and a half to come to this university, which is so far away, and then are they going to travel?", but it was interesting, the minute we opened it for the community, people came and they don't want to leave. They started to hang out in the space. And that made us actually make a bigger space afterwards where we can have the classrooms and the spaces for the startups. So everything that's formerly done in other places, I think it came organically. And then basically, we started to have all these structured programs that so many have followed later on in the rest of the kingdom.

Rachel Pether: (12:21)
Yeah, I think it's fascinating what you said about KAUST. I've seen, unfortunately, I've only seen pictures of it. But it really does look like an incredible sort of ecosystem. Maybe firstly, give me an overview of what you currently see in the entrepreneurship market in Saudi, and what excites you most given that you've been working in this space for a number of years now.

Amal Dokhan: (12:43)
Right before I come to the, actually the Zoom call, I was at the Ministry of Investment, and it was, we've had the best discussion ever, because we were just reflecting on the future and the things that have happened. And I think in simple words, it's one of the best things that are happening in Saudi is how the entrepreneurial scene is evolving in a massive way. I think when we look at Saudi years and years ago, we used to have so many traditional businesses, the family businesses and all of these stuff, but we haven't seen a lot of tendencies from the youth to look into starting a company and not go to a certain job, for example, all of that.

Amal Dokhan: (13:24)
Today, it's becoming the talk of the town. Everybody is considering an entrepreneurial route or an entrepreneurial exit from their job, for example. So it's becoming very normal that you see somebody who's working on a particular job. And then on the side, they're building a company. So they're just waiting for that company to reach a stage where they can do that job. And that we haven't seen from executives before. We haven't seen that in people that work in the government, for example, but it's happening now.

Amal Dokhan: (13:56)
And the reasons for this is that Saudi is becoming like a heart of transformation, like that machine that's transforming and evolving in a speedy manner. And that only happened because of the support of the government to make this a reality. When the vision started in 2016, it kicked that new dream of 2030, where people got inspired by the idea itself, and then it took years for people to understand and in the past two years, started to witness that huge jump, and it actually materializes in results because you see it in the number of startups that are entering the market, the number of startups that are receiving investments, the number of venture capital funds that are emerging and not just Saudi venture capitals, actually the foreign VCs that are coming to Saudi Arabia and they're establishing their headquarters here.

Amal Dokhan: (14:51)
So I've seen a Chinese fund. We've seen other U.S. based and all of these are coming and looking at establishing whether a regional HQ or basically, a branch in Saudi Arabia. Why this is happening again? It's yes, we've mentioned the government. But at the same time, we've actually witnessed transformation and the mindset of addressing a startup as a proper career path. It's becoming more acceptable by families, it's becoming more acceptable by people that maybe never looked at it. And I mentioned the story before, I said when we used to go in public places, people would talk about maybe different topics that are social topics. Today, everywhere, it just turned into, it looks like a startup co-working space, even in the malls, even in the coffee shops, in the restaurants.

Amal Dokhan: (15:43)
Everyone just moves around, and you hear and due to the nature of customer discovery, we've got used to listening, listening to the voice of the youth, listening to the voice of like people that are looking into starting businesses, and you just see excitement and hope, and there is withdrawal models that started to materialize today. But there is also more to be done. And we understand that we're still at the beginning of building that ecosystem. It took years for us to establish the right programs, to establish that change in the mindset, to include entrepreneurship as a course in the universities, for example, to have it in some of the schools.

Amal Dokhan: (16:25)
And that's already happening. We think that this is going to pick up and change over time. But currently, we can say it's in a healthy situation where it's also attracting startups from outside Saudi to come and set up in Saudi. And there is a lot of incentive programs that are created for both investors and entrepreneurs to come and set up in Saudi. So there is a lot of tax waivers, there's a lot of incentives for visas and easy licensing and reduced fees, all of these stuff and programs that receive these people, plus the Ministry of Investment is also looking ahead and have more to be released in the next FII, which is that Future Investment Forum, that's going to happen hopefully, when everything is fine, by next January, here in [inaudible 00:17:20].

Rachel Pether: (17:21)
And I think it's obviously great to have that government support. And one thing that I've noticed here in the UAE is that all it really took was a couple of quite successful exits. And we had Uber and Careem and Amazon and Souk. And I think that also helped shift the mindset of people to oh, this could be a really successful business. So have you seen that people, as you say that becoming more accepting of this as a proper job as it were, and actually wanting to do this as a career.

Amal Dokhan: (17:57)
It's happening a lot. And when you talk about exits, I mean, there's a couple of companies that have been acquired. There's a couple of mergers that happened. There is a couple of exits through the capital markets, which is another piece of the ecosystem as well, which is easing the process for companies to apply and to exist either in the parallel market or in preparation to be listed as well. So there is, I think what we're looking at is that kind of a journey that starts by the change of the mindsets at the beginning. And that's through awareness programs, which Monshaat, the small and medium enterprise authority is playing a huge role with the events, the programs, the connectivity, the hubs that are scattered around the kingdom, just to create that kind of inspiration.

Amal Dokhan: (18:45)
And people can go and talk to anybody if they have an idea. So these are like the jobs of the hubs that are existant in Saudi and then later on, it's just we need more programs. And we know we have accelerator programs, but we need more. So at least if I took that career choice, I know if I cannot do it on my own, there is someone who can support me. There is a group that I can join. There is a network that I can be part of. And sometimes you need the six months or the three months journey of an accelerator, and sometimes you don't. You're just able to pick it up yourself. You have the right people around you, you can build the right team and carry on with it.

Amal Dokhan: (19:23)
But the only thing that you can never, let go of is just the right network. Because at the end of the day, you will need to access markets, you will need to lobby for your idea, you will need to make sure that you're being visible in the right way so investors can take notice of you as well. And moving after that, it's just the creation of the venture funds that we have witnessed kind of and I don't think it's precedented in that short time. It's really very impressive to see that. But that created another push that we still need to work on, increasing the number of startups whether from Saudi or outside Saudi Arabia, because now the amount of investment money or venture capital money still needs more in the pipeline, so we can witness more investments and hopefully more exits in the near future.

Amal Dokhan: (20:20)
Part of that is recently, like two weeks ago, almost a week ago, we were looking into what are the pieces that are needed at that early stage. So we obviously need more accelerators, maybe we need grants for MVPs, for minimum viable products at the pre-seed stage, which is one of the most crucial ones that could stop a startup from continuing, if I'm not able or I cannot rebuild that product to the beginning.

Amal Dokhan: (20:45)
So we started to look at the angel investing scene. And although that existed, we've got one of the oldest angel groups here, seven years old, Oqal. And we still need more, there's a lot of members in it and they're doing their job into looking and screening and doing the diligence, and then presenting these companies to basically to the community and the members. But I believe we need more of these angels that look into a different diversified approach into the top of startups that they look at, and would love to see people that could invest in a pitch deck maybe, because they know that these people are willing to do it. And we always say that angel investing is about believing in the people, believing that they can actually bring it to the market, that no matter what happens throughout that journey, they're going to pivot and change. And that's the essence of angel investing.

Amal Dokhan: (21:38)
And I did an interview with Brad Feld. And he said it's all about empathy. You got to empathize, you got to feel what they're going through. And then you know is it in need of a network? Is it in need of an introduction? Is it in need of injecting more cash here and there? So it becomes not like the VC relationship to the startup, which is more on a board level, more structured, and all of that. It's a very friendly/mentorship, sort of like relationship, we want more of that. And that's why we're doing a lot of activities to train angel investors to network, angels with entrepreneurs, and to also tell a lot that this could be a choice, even if you haven't done it, you can do it with someone else, you can try to be part of that network and see if this is something exciting.

Amal Dokhan: (22:27)
But to get more, we need to create more success stories, obviously and excerpts to show that people have gotten something out of it, but there is a lot that's happening also in that scene in particular, because we know that this is how most of the ecosystems were supported at the earliest stage level, like even most of the research based companies that were pure scientific, maybe hard to commercialize, were actually funded by people that were fans of that type of research where they cared about the cause. So we're trying to ignite that and connect it and convey it to the startups and hopefully, they can both speak the same language. And that connectivity becomes easier to bid on. So there's a lot of plans that we're actually working on in the coming two months to also incentivize that part.

Rachel Pether: (23:22)
Fabulous. And we've had a number of audience questions coming in already about the entrepreneurship system and also on mentorship. But I would just like to ask a question on the mega funds that you talked about. I listened to a really interesting podcast a couple of weeks ago now, and it was talking about the risk and the downside of mega VC funds, taking WeWork as just one example of kind of too much capital going into one company. Do you see that as a risk given the sort of stage of the evolution currently in the Saudi market? Or are they allocating fewer, smaller amounts of capital into more companies?

Amal Dokhan: (24:04)
Yeah, so most of what we see today is in the pre seed and the seed stage, because this is like an emerging market. So most of it is in the early stage, and the average size ticket of a fund is about $5 million. So we're not really hitting harder than the number of or the size of investment yet. We don't see that much of like the companies requiring that amount of capital yet in Saudi, but we do expect that this is going to change in the coming few years as we start to witness more growth stage. We do have growth stage companies that obviously require more injections of cash, but they're not as many as the seed stage ones.

Amal Dokhan: (24:48)
So if you look at the total amount of investments that have been done so far, it's according to the Venture Capital Association that tracks most of these activities is about $67 million for most of these companies, so it's mostly not very big tickets. And I think that's the right approach, actually to do it at this stage, and especially that most of these companies are really, really early stage.

Amal Dokhan: (25:15)
Now, could we reach that problem of the WeWork and what happened? I think we still need a couple of years to start saying that this could be a problem. At the moment, our focus is just to increase that number of startups. So hopefully, we can see more exits at this stage, although we do have a big number of companies at the early stage, but their survival rate, as we know globally, is not always high. So I still need to increase that number so we can have the ones that survived the series A and the series B and C stage, which we started to see a bit off, but it's not very common yet over here. So the majority is just early stage at the moment

Rachel Pether: (26:01)
Yeah, and I think when you mentioned the mega funds at $1 billion, if you're looking at $5 million ticket sizes, that's 200 startups that you can make investments in so it's important to have that strong pipeline as well.

Amal Dokhan: (26:14)
Yeah, at the moment. Actually, if you look at the sizes of or the investments, so 92%, so all the investments that are being done now in the Saudi market are actually early stage. So we're still really, we still need some time for these companies, two to three years to start seeing them in the growth stage. And then the ticket size is going to grow a little bit bigger. And even the venture capitals maybe start, so the majority of VCs nowadays are all seed stage. Very few do invest in the growth because there isn't enough of that pipeline. So that's where the work that we need to do, so maybe these VCs later on will structure other funds so they can invest in the growth stage that they can start targeting.

Rachel Pether: (27:03)
Yeah, that makes sense. And I think in some of these answers, you've touched on some of the questions that I want to get to, but we've had an audience question saying do you see the local capital sources, and maybe x-government, trying to replicate what's been accomplished in Silicon Valley over the last few decades, and more recently, China as providing risk capital themselves? So is that capital coming from local startups or local VCs and international? What's that kind of mix like there?

Amal Dokhan: (27:37)
All right, so there is one of the entities that the government have created to spin off the small and medium enterprises called the Saudi Venture Capital company. So SVC is basically an incentives fund. It's a co-matching vehicle. So what they do, they incentivize venture capitals to set up or to start their funds in Saudi, and they do help them in the co-match or even in closing the ticket that they're looking for. Now, why are they doing that? Yes, because we do need that to minimize the risk somehow over these funds, to incentivize them to be present, to do the work, to reach out to the entrepreneurs, and all of that.

Amal Dokhan: (28:18)
So this has played a huge role in the increasing number of the venture capital funds that have been created in the past two years, because SVC was created two years ago. So we've seen a number of those in those reports about how many of these funds have been created. And on the other hand, of course, we see the other funds, the funds so you have the Jada that funds down venture capital funds that comes from outside Saudi Arabia mostly, so like their investment in 500 and MSA and many other of those.

Amal Dokhan: (28:52)
So there is some of these funds that are supporting everyone trying to minimize the risk of it. But the majority of the investments that we're talking about are coming from venture capitals, just private VCs. And this is the right way to do it, honestly. And these VCs have got the support from the government, but at the end of the day, they're investing and that government money is like an LP money at the end of the day, so they become just a limited partner. So it does not really instruct the startups that they invest in, they don't really interfere in the process. They only advise and help if needed. So this is how they're trying to minimize the risk, which supported a lot of the venture capitals that have been created in the kingdom recently.

Rachel Pether: (29:42)
Yeah, that's a great point. And I think that co-investment model is becoming much more popular in the region as well. So we have a few more questions. I'm going to ask you a general question, a political question and an advice question. So I'll start with the general question first. We have another audience question from Ken, thank you, who's asked how can entrepreneurship in Saudi and the broader MENA region be increased by 10 times, or let's say even 100 times? And I know you've touched on some of these things already, but maybe summarize those points.

Amal Dokhan: (30:19)
I like that question, because that's what I sleep dreaming on. That's what I wake up trying to do. It's just figuring out every possible way of how do we increase that. There's still yet more to be done. Ecosystem building is not just about creations of funds and creation of accelerators. So there is more. In order to have these accelerators filled, we still need to work a lot on the early stage education. I'm a believer in the education system. I'm a believer that this is a process that can be touched upon earlier at the growing stage of every human being, to be exposed to the possibilities, to the problem solving mindset, to the entrepreneurial mindset.

Amal Dokhan: (31:02)
And that's going to create that generation that comes all about problem solving, all about creating these solutions to where it's companies that become successful, impactful changes the lives of the communities. So that's one way to look at it. Now, how do we have the hundreds and the thousands and all of that? It's, basically we need to triple and do 100 times of what we do and increase the agents that incentivize these university students, that shows a different way. We need to do a better job in the media and publicity of the little stories that happens.

Amal Dokhan: (31:38)
I think there is, yep, there's some, it started in Saudi, but there is more to be done. We get all impacted by what we see. If we see that the idols of the corporates and the government positions as we grow up, that's what we see and that's what we want to be. And then sometimes we grow up on the startups that we started to see now in Saudi and the companies and people with mission and nothing is more beautiful than someone who believes in a certain or she believes in a certain solution, and then they lobby for it. So I think there is a piece of education piece of like enhancing ecosystems, increasing numbers of VCs and mentors, and all of that and all come together, we're definitely going to see it. And by the way, month over month, we're increasing. If we want to turn the ecosystem into a startup, I think we're going to have a very good GMV in Saudi for the number of startups increasing over the month.

Rachel Pether: (32:38)
It sounds like really, all we need need to do is clone you, like 1,000 times, and then we'll be fine. One point on the education, you actually recommended a TED Talk to me, which was fabulous. It was Ken Robinson on Do Schools Kill Creativity? And he said all these kids have tremendous talents. I think he said, "All kids have tremendous talents, and we squander them ruthlessly." So knowing what you know now having been out in the market, how would you teach kids differently?

Amal Dokhan: (33:14)
So, I started as an educator, and I think I was a rebel in the way I was teaching the kids and all of that. I probably wanted to, like I reflected on how I actually got my education. I was one of those people who wanted to study and get straight As and no matter what, at any cost, I've got to do this right. And reflecting back, I don't have regrets. Obviously, I caught up late on what I wanted to do. But I do believe in the power of a young mind, and Sir Ken Robinson's statement is amazing in a way because he reflects on that research that says that the human mind, by the age of four starts to become more smart and sensitive towards social signals.

Amal Dokhan: (34:02)
So I start to feel who's upset, I start to be a pleaser, I start to be depending on the society and the community that I actually grew up with. Or I become a person that basically looks at what's right and I want to do it, or what I believe in doing and that becomes my thing.

Amal Dokhan: (34:19)
So how do we do it differently? I think we started, we have something called the Entrepreneurial University in Saudi where universities are competing to see who's going to bring the entrepreneurship education in a different way, who's going to incentivize students to go through the entrepreneurial journey. During the Global Entrepreneurship Week, it was nothing but talking to universities and students and hearing what they're saying, answering their questions, directing them to different places.

Amal Dokhan: (34:46)
So the different way and the different approaches like less structured approach and more of like the free thinking of understanding and analyzing the personalities of the young people and see where they can shine. It's all right if I am super great, at mathematics, because obviously one day I'm going to be creating wonderful deep learning and AI solutions with my talent.

Amal Dokhan: (35:14)
I think if we understand these transitions, and what are we building, what is the value of building these skills, of turning the theory into practice at an early stage, showing them what is that going to mean in the real life, and making them do it in an early stage, that's going to change so much. We're not going to struggle at universities to teach innovation and entrepreneurship at that stage. It's going to be just being bombarded with the amount of people that are change makers. And those models are going to change others. And here, we need to reflect on the educators themselves, so they can believe and enable the change, the whole education model will change.

Amal Dokhan: (35:54)
And through COVID, who would have anticipated that students will sit behind a screen and the teacher will be teaching over distance? And if that was said to them before that, no one would have believed that this is possible. But when people are faced with change, they find solutions and they cope.

Amal Dokhan: (36:11)
So we need to make them cope earlier with the possibilities that might come and face them in their life, but definitely less structure but more chaos is needed to allow that innovation and creativity to spur and to teach them fear. I'm a big believer in that. I'm a big believer that it's all right to fail and it's all right to encourage experimentation. And it's all right to actually accept it. And we don't say don't get upset, you can get upset a little bit but understand why it happened and let's get over it so it doesn't become a showstopper for us. So bit of skills, bit of thinking. Obviously, design thinking has to be part of this whole process so they can create these simple solutions. And I was part of many experiments in schools, by the way. So I've seen the results at different ages as well.

Rachel Pether: (37:02)
Now, that's fantastic advice. And that actually leads quite nicely into a comment that's come through about mentorship. So I'll quickly read that out and then a question off the bat. Oh, Stephen said, "I've been blessed to have a fantastic mentor at the University of Colorado in Boulder, has a long and positive relationship with students from Saudi Arabia. I hope we can have a bright future with Saudi Arabia. Thank you for a fantastic conversation." So thank you for that comment. And then a follow on question from that. And I'm starting to get political, but it's the only political question, what will the new administration of President Joe Biden be doing to improve relations with the noble people of Saudi Arabia?

Amal Dokhan: (37:42)
So you're getting political, but I'm not very political. See, that's the thing. I'm not into politics, honestly. But all I say that our relationship with U.S. is a very, very old relationship that I believe will continue in the best way possible that serves both, so both U.S. and Saudi Arabia. And I think we've got a lot of ties that puts us together in many situations, and maybe the part that I look at is the economic part, mainly because we see a lot of initiatives and a lot of companies that are working hand in hand with U.S. and Saudi Arabia, as well.

Amal Dokhan: (38:24)
So with my entrepreneurial mind, I can only hope for the best, and for a much more prosperous relationship to be flourished. And as you mentioned, there's a lot of Stephen here mentioned that, that there's a lot of ties with Saudi. A lot of Saudis lived in U.S., Her Royal Highness, Princess Reema, our ambassador who's actually there, and is always building and supporting and building very successful and healthy relationship between the two countries.

Amal Dokhan: (38:55)
And it comes in so many cultural programs, in so many economical ties. So I'm an optimist. And I do see a lot of good that should come in the coming period, and our relationship with the people will also prosper. I love that statement on Boulder, Colorado, because every time I talk with Brad, he talks about the Boulder experience that I always like to learn from. So it's great that this is happening. And maybe Stephen, we catch up later, and we see if we can connect you with more Saudis and more entrepreneurs as well.

Rachel Pether: (39:30)
I'm sure he'd love that. And thank you so much for that offer Amal and you've answered so many difficult questions today. So I'd like to end on a nice, easy one. What would be your advice for a fresh graduate going out into the real world?

Amal Dokhan: (39:46)
Don't deny yourself trying anything new and anything exciting. Life will go by, and one day you'll look back and you're going to appreciate all the goods and the bads and what you thought it was really hard experiences actually create us as human beings. We always look back and remember these things that shapes our mind and it shapes our heart. It shapes who we are. And the richer we are in terms of experiences, the more likely that we're going to become more entrepreneurial and more courageous in taking new steps in life.

Amal Dokhan: (40:21)
Just focus on empathy, it's a change maker. Understand where the other comes from, and empathize with yourself as well. And we'll want to stay away from any judgments or any type of thing because it actually shadows the way we think. And we're by nature humans. We get impacted by what people say, by what's around us and all of that, but then we need to have our own internal alert that tells us, this is how we should think about it, let's go back and reset and look into it. So lots of empathy, lots of experimentation, don't be afraid of failing, no one will remember that later on. When years pass us by, just get up right away, shake it off, learn from it, and just be better, and never stop learning. We don't stop learning by finishing college. Learning is something beautiful, that keeps us alive. It's going to make you young the whole time because you're always learning something new. So I think those are like a bunch of things that I believe I try to remind myself with it. And I think it helps anyone who's in a university to just look into life with less fear, more courage to try new things. And if it didn't work out, that's absolutely okay. You can always flourish somewhere else. But yeah, keep learning obviously.

Rachel Pether: (41:45)
They are fabulous pieces of life advice. There's no way I can add anything to that. So I just want to say Amal, thank you so much for your time today and sharing your insights and wisdom and empathy. It's been such a pleasure speaking to you.

Amal Dokhan: (42:01)
Thank you so much, Rachel. It's been a pleasure. And I'm really honored. And thank you so much for everyone who attended and asked those questions as well. And I think there's a lot of beautiful things coming in Saudi Arabia. So stay tuned, because more announcements are going to happen in the coming few months, especially when it comes to innovation and entrepreneurship and attracting a lot of startups, VCs as well to the region. So pleased to be here. I'm very humbled to actually have been here today at Salt. So thank you, Rachel. Appreciate it.

Rachel Pether: (42:33)
Thanks so much. Thanks so much, Amal. It's always great to end on a really positive note.

Todd Sears: Driving Equality in the Workplace | SALT Talks #112

“HR leaders can [understand LGBTQ+ inclusion], but if business leaders get it, they can really drive change.”

Todd Sears is the Founder and Chief Executive Officer of Out Leadership, the global LGBT+ business advisory company that partners with the world’s most influential firms to build business opportunity, cultivate talent, and drive equality forward.

In 2001, gay marriage was not legal. That meant there were over 1,049 rights at the federal level that the LGBT+ community did not enjoy, over 90% being financial. This presented a massive opportunity as there was an entire segment in desperate need of financial guidance related to protecting livelihoods and estates. This ultimately led to the creation of global conferences in 2011 called Out on the Street that brought CEOs together in support of the LBGT+ community in business. “Everything that we've done globally with 650 CEOs, and now 85 companies, is focused on the idea that business can drive equality, but from a business imperative.”

Beyond the social value, LGBT+ advocacy has real economic benefits. Leaders in the business communities of places like Singapore, where homosexuality is still illegal, can be influential in applying pressure.

LISTEN AND SUBSCRIBE

SPEAKER

Todd G. Sears.jpeg

Todd Sears

Founder & Chief Executive Officer

Out Leadership

MODERATOR

anthony_scaramucci.jpeg

Anthony Scaramucci

Founder & Managing Partner

SkyBridge

EPISODE TRANSCRIPT

Joe Eletto: (00:07)
Hello everyone, and welcome back to SALT Talks. My name is Joe Eletto, and I'm the production manager of SALT, which is a global thought leadership forum and networking platform, encompassing finance, technology, and geopolitics. SALT Talks is a series of digital interviews with the world's foremost investors, creators and thinkers. And just as we do at our global SALT conferences, we aim to both empower big, important ideas, and provide our audience a window into the minds of subject matter experts.

Joe Eletto: (00:35)
And we are very excited today to welcome Todd Sears to SALT Talks. Todd is the founder and chief executive officer of Out Leadership, the global LGBT+ business network trusted by CEOs and multinational companies to drive return on equality. Out Leadership creates executive events and insights that help businesses realize the economic growth and talent dividend derived from inclusion. I'll cut the bio a little bit short there, because we're going to get in more and more about Todd in a bit from the horse's mouth, if you will. But if you have any questions for Todd during today's talk, please enter them in the Q&A box at the bottom of your video screen, and we'll endeavor to get to them before the end of the talk, but, Todd, it's a real pleasure. Welcome. Welcome to SALT Talks.

Todd Sears: (01:20)
Thanks, Joe. It's great to be here. I appreciate the invitation.

Joe Eletto: (01:23)
Absolutely. So we begin each SALT Talk asking our guest to tell us something about them that we can't find on their proverbial Wikipedia page. But I'd like to turn it over to you, to walk us through sort of a robust Wikipedia page, if you will. Your journey, and how you got to where you are today, and share your story with the SALT audience.

Todd Sears: (01:41)
Sure. Well, if you do go to my Wikipedia page, it's very clear that I am openly gay. So you can find that from Wikipedia, but I'll weave that into the story. I knew I was gay when I was four, which for most folks who are LGBTQ that's actually in the range. Most people know their sexual orientation or gender identity between the ages of three and eight. For me anyway, I grew up in North Carolina, and it took me until I was 18 to actually be comfortable to come out. I moved all around. My dad was in textiles, so I went to nine different schools before I went to boarding school in Virginia. And spring of my senior year in boarding school at Woodbury Forest in Virginia, I came to New York. And I saw a play called Angels in America, which I think a lot of folks have seen, hopefully. It just celebrated its 25th anniversary last year, or two years ago, which nothing like having a play that made you come out celebrate a 20th anniversary to make you feel old.

Todd Sears: (02:37)
But I basically, I saw my life kind of played out on that screen. I was the good old southern boy who was going to get married and have 2.2 kids, live in a white picket fence, do all the right things. And you see it played out on the screen, or on the stage, actually a character named Joe the Mormon, who's played by a guy named David Marshall Grant, who if you've saw The Devil Wears Prada, he was her dad in the movie. And so he basically, the show, showed me what I was going to be if I didn't come out, and so in the Walter Carr Theater in spring of 1994 I came out to myself. And I went back to Virginia, and I actually wrote a letter to Joe the Mormon, David Marshall Grant, and I sent it to the theater.

Todd Sears: (03:21)
And interestingly, all through my years at Duke, he actually wrote me. We corresponded, and he was kind of my first ally, my first mentor, and he really kind of helped me navigate what it meant to be gay. Because if you think about role models and visible gay people in the '90's, there were very few. And those that we did have were either very stereotypical, drag queens, florists, or people dying of HIV. That was pretty much what you saw. You didn't see gay bankers, you didn't see gay lawyers. You didn't have CEOs who were gay. You didn't have anyone saying that you can have a career if you were gay, right? I mean, it was kind of career suicide at that point in business to be gay. And so I sort of internalized that, but also was lucky enough at Duke to have some great fraternity brothers and great supporters, and I was in campus politics.

Todd Sears: (04:02)
And so out of college I moved to New York, and I went to Wall Street, which was at that point late '90's. And my first boss was a homophobe. He used the term faggot on the floor with regularity, and it was kind of shocking actually. I thought back, and I thought, hey, I grew up in North Carolina, and I never really had issues. And here I am in New York City on Wall Street, and I have a homophobic boss. What are the odds? So I did what most gay people do who are in homophobic environments, and went back in the closet, and I started looking for a new job. And the second investment bank that I worked for, I was super out in my interview. I was like, "I'm gay, and you need to know this." And they were all like, "Dude, it's totally fine. We're cool with the gay thing." But coming from a homophobic environment, that mattered, and that was a decision I made, that I would never again be in the closet for any point in my career.

Todd Sears: (04:57)
And what that also allowed me to do was connect who I was as a person, to the community to which I belong, to business. And from an investment-banking perspective, it allowed me to actually help win business, by connecting with gay CEOs and gay business owners. And so I was on the sell site M&A in media, and we actually won the business of Out and Advocate magazine merging the second time, I think, they did it, which ultimately led, when I was a private banker, to helping take PlanetOut public, which was the first gay IPO, which was pretty exciting.

Todd Sears: (05:24)
And so the idea that I was able to leverage who I was, to have those connections, was kind of a new thing. And so I switched sides of the world and went to private banking in Maryland in 2001. And for those who know private banking, probably a lot of folks listening today, you get a phone, a desk, a computer, and they say bring in a million dollars a month of new assets. And if after eight months you don't have $8 million, sayonara you're fired, which at that point, I believe, the fail rate was 92%. And I put together a business plan for focusing on LGBT financial planning. And believe it or not, in 2001, not a single Wall Street bank had thought about the LGBT community as a market, as a business opportunity.

Todd Sears: (06:03)
At that time, because marriage equality was not a reality, there were over 1,049 rights at a federal level that gay and lesbian couples did not enjoy, because of federal recognition not being an option. And about 90% of those rights were financial, titling, taxation and estate planning, all of those types of things. And I thought why isn't another firm talking to these folks? These folks need help protecting their families, protecting their livelihood, protecting their estates. And so I put together a plan, and I partnered with Lambda Legal, which is the largest LGBT civil rights organization in the U.S. And I did domestic partner planning seminars all over the country, helping gay and lesbian couples understand how to protect their assets, how to have a charitable planning component to their financial plan, and ultimately how they could support Lambda, HRC.

Todd Sears: (06:47)
We actually had 31 nonprofits whose endowments I managed at that time, and in the first 12 months I brought in $100 million of net new assets. And after the first four years, I brought in almost $2 billion, which was great, it was nice. I got to keep my job, so that was a bonus. But what was also exciting was I tracked it as an ROI initiative. I didn't go to Merrill Lynch and say this is the right thing to do. I said this is the right thing to do for business. This is the right thing to do for our reputation. This is the right thing to do for our employees. And I tracked it as something that they needed to reinvest in. So I actually got a meeting with the head of Wealth Management, Dan [Sontag 00:00:07:24], my second year, and I got 30 minutes with him, and I was 25, I think, so so it was like two years ago. And so I-

Joe Eletto: (07:33)
[inaudible 00:07:33].

Todd Sears: (07:33)
Look, right, exactly. I didn't have quite as much gray hair. So I said, look, I brought in $100 million in the first 12 months, and we as Merrill Lynch can own this market. And if you really want to, we could do it, and here's how we do it, and asking for a quarter-million bucks of sponsorship, and he gave it to me. And I later found out, in 37 years at Merrill, he'd never given a financial advisor a dollar, but he gave me a quarter of a million. And the deal was I had to report back to him once a quarter on the ROI in his investment, and the ROI on his investment was twofold. One was new assets under management, but it was also more financial advisors who were focusing on the LGBT market.

Todd Sears: (08:07)
And I later found out that was a bit of a test, because, as he said to me later, when he tapped me to kind of lead diversity strategy for him, he said, you're not a financial advisor, you're a leader. Because a financial advisor would not share his or her ideas, and want to bring in other leaders with them, right? That's a leadership role, not an advisor role, and ultimately I'd brought in 250 other financial advisors and help them sort of do the same thing. So that was the framework. And along the way, because of the work that we did, Merrill won all kinds of accolades. We actually helped advocate for LGBT equality through marriage equality, through adding non-discrimination for sexual orientation and gender identity, transgender medical benefits, we won the HRC award. All because they were doing the right thing for business, not just because they were doing the right thing for LGBT employees and clients.

Todd Sears: (08:52)
And along the way, I got to really have some great and mentors, and we can chat about that as well. But the ability as an out, gay person to then help other people be out and visible, was something I was very proud of. Ultimately, as I mentioned, he tapped me to run diversity strategy for him, which I did. And then I was recruited away to Credit Suisse, and I was head of diversity inclusion for them across all their businesses. And in 2010 they laid me off, which was awesome. And so I was sitting on my cell phone with a severance check and multiple martinis, and I thought, all right, what the heck is next? What am I going to do next in my life? And I kind of looked around at my Merrill experience, which was so incredibly positive and wonderful, and I was the guy that would get choked up with the Merrill commercials, and Mr. Loyalty kind of thing, would dollar the bull.

Todd Sears: (09:41)
And, anyway, and I thought, and I looked around ten years ago, and if you think back for the leaders on this call, we didn't see CEOs using their economic platform to advocate for change or equality, or any sort of social justice platform. We didn't have companies using their economic power in places like North Carolina or Indonesia or Singapore, to advocate for gay equality, or really almost anything. And I thought, could I create that conversation? And could I use the learning of getting an old, conservative Irish Catholic command-and-control company like Merrill to support gay equality, because I taught it's the bottom line?

Todd Sears: (10:12)
And so I start a summit I called Out on the Street. I used my severance check to fund it. And the idea was using Wall Street as an example, and kind of Davos, all talk to me, this type of conversation was the model. CEO-hosted, senior-business-leader attended, not a diversity summit, not an HR summit. I really wanted business leaders, because HR and diversity folks get it, but if business leaders get it then they can actually drive change. So our first summit was in March, 2011, so we're almost ten years old now. I think you guys celebrated ten years last year, I think, if I'm not mistaken, right?

Joe Eletto: (10:42)
We did. You were at our tenth anniversary conference.

Todd Sears: (10:44)
Yeah, which was awesome. And so the first six banks were Bank of America, Barclays, Citi, Deutsche, Goldman Sachs, Morgan Stanley. And I gave each of the six original banks ten slots for director level or higher business leaders. And I said the framework's going to be business, talent and equality, but in that order. I want you to be in the room because it matters to your business. You've got to have the right talent to execute on it, and equality's the output, not the starting point. And we were 200% oversubscribed for the first summit. Two weeks later, four of those six CEOs signed on for marriage equality for New York, and we grew from there. So I launched in Europe almost nine years ago, in Asia eight years ago. We were the first gay summit ever an Asia, in Sao Paulo, Brazil, and in Sydney, Australia.

Todd Sears: (11:21)
So now, around the world in 2019, we had Davos-like summits in New York, London, Hong Kong, Paris, Sydney. We have talent initiatives for young, gay leaders that we built called OutNEXT. We have a talent initiative for senior LGBT women called OutWOMEN. We have a board program called Forum, which we can chat about, as well as research on allyship, on self-identification, on the business bottom-line benefits of LGBT equality. And everything that we've done globally with 650 CEOs, and now 85 companies, is focused on the idea that business can drive equality, but from a business imperative. So we get these companies to leverage the economic power they have by doing business in states and countries all around the world, to say that discrimination against gay people, LGBTQ people, is simply bad for business. And so that's what I'm now doing around the world.

Joe Eletto: (12:08)
I think it's fantastic. Just to go back to Angels in America, I actually saw that when it was on Broad- I think it, was it two years ago already? That's-

Todd Sears: (12:16)
Yeah.

Joe Eletto: (12:16)
The 25th?

Todd Sears: (12:17)
Yeah.

Joe Eletto: (12:18)
I took a picture of the wings and everything. That was, yeah, it was something I'll never forget. I just, I don't know, I loved the story.

Todd Sears: (12:24)
And the HBO, the miniseries of it as well, Meryl Streep and DeNiro, and an amazing cast of folks. So if you haven't seen it on Broadway, it's still on HBO so.

Joe Eletto: (12:34)
And that's what I'll be watching this weekend. So just to go back to SALT 2019, and, you know-

Todd Sears: (12:40)
Yeah.

Joe Eletto: (12:40)
You moderated a panel on diversity leaders from BlackRock, Bank of America, a hundred women in finance and HP. And Leslie Slaton Brown, who's the chief diversity officer of HP, said that they implemented a process at HP to actively track business one, because diversity was at the table. So I sort of want to do a state of the state, if you will, of how member firms at Out Leadership are able to use the power of business to successfully drive change.

Todd Sears: (13:07)
Yeah. Well, I'd say a couple things. I think what gets measured gets done. So I think companies like HP, that are measuring diversity and their impacts, matter. It depends on what they're measuring, and how these companies are looking to effect change, right? So, internally, I always say the representation is a lagging indicator, to put it in financial terms. It's the result of your corporate culture of the last five years. Engagement is a leading indicator. So too often companies say, oh, we don't have enough of insert blank, whatever blank is, women, people of color, LGBT, and we have too many of insert blank here, generally straight white men. And the challenge with that is that you're saying that you're valuing difference differently, right? And the idea is that it's a problem to be solved, it's only focused on head count and belly buttons, it's not focused on opportunity or business.

Todd Sears: (13:52)
There's a guy named Martin Davidson at Darden school that talks about leveraging difference. And he actually says it's an opportunity to be capitalized on, all elements of difference. Both inherent and acquired diversity count, right, so acquired diversity is more your mentality, and your diversity of thought and perspective. And ultimately everyone, including straight white men, have something to be gained from that idea. And so when companies are looking at this, I really encourage them to think about it as an opportunity, not a problem, that everyone does have a role to play, and that's on the internal side.

Todd Sears: (14:20)
On the external side, quite frankly, as we know from pretty much every metric, discrimination is bad for business, whether it's discrimination against black people, white people, LGBTQ people, et cetera, and companies are in a war for talent. So the challenge that if you're doing business in Singapore, for example, where gay people are still illegal - there's 67 countries around the world where it's still illegal to be LGBT- but in 100% of those countries, we are doing business. So if you want to actually bring your top talent into Singapore, it's hard. And so if we can get 19% of Singapore's GDP, which is financial services, to say to the Singapore government that 377A, which is the anti-sodomy law that's on the books, is bad for business, then that's how you start to effect change. And that's really the model of Out Leadership, is using that soft power that businesses have to advocate for change, because it does matter to their talent, to their clients, and to their bottom line.

Joe Eletto: (15:09)
Yeah. And I think this goes well into talking about the Quorum initiative of Out Leadership, so that works to ensure that LGBTQ+ diversity is central in conversations about board representation and policy. So, are there examples that you can share, where something like that having a more diverse board, having more representation at the top, actually has affected change, whether that's locally or internationally?

Todd Sears: (15:33)
Yeah. Well, so I'd say, so first of all, Quorum is our board program, and we've been doing it for about seven years now. And the idea, quite frankly, was expanding the board conversation to include LGBT folks at the board diversity level. So, too often the conversations around board diversity only center on race and gender, and historically have not included LGBTQ, and to me that's just a missed opportunity. Because there are LGBTQ people of color, women, et cetera, so why wouldn't you broaden the pool? And the first step of that is actually including people in the policy. And so we're actually, literally today, will be launching Out Leadership's policy in a box. There are only 12 companies in the Fortune 500 that include LGBT in the definition of board diversity currently. There were only two, so we've gotten ten to amend their policy, which is great. We've also gotten CalPERS, CalSTRS, New York City and New York state pension funds to include LGBTQ in the definition of diversity that they mandate for their investment strategies. So they have to have board diversity in the governance of the companies that they make investments in.

Todd Sears: (16:32)
And then a lot of private equity firms, KKR, Carlisle, et cetera, and Blackstone and BlackRock, are in the same kind of zeitgeists, in terms of using their buying power of the market to actually say that this is something that matters to them. So it's about having people involved in the conversation, it's about including people in the policy, but then it's about holding companies accountable. The California law that just passed last month was a great example, I think. And so it requires all companies doing business, who are based in California, to have diversity at the board level.

Todd Sears: (17:02)
And we've been advocating the last three years, and thanks to a lot of lawmakers in California who listened, LGBT is included in that definition for those companies. Goldman Sachs, David Solomon, actually announced at Davos this last year that Goldman would no longer take a company public if they did not have a diverse board. And for Goldman Sachs, that Goldman was actually one of the two companies originally that included LGBT in the definition of board diversity. So for Goldman, LGBT is included, and they're actually a supporter of the Quorum initiative, as is KPMG, Ropes and Gray and Egon Zehnder, is coming on board as well.

Todd Sears: (17:34)
So it's kind of a mixture, I guess, is the best way to say it, that it does matter for folks to be included at the top. It's not about belly button counting, and saying you have to have one gay person, one black person, one woman. But it is about broadening the pool, and saying you really should have diverse thoughts and perspectives. And most of the research out there does show that diverse thought and perspective leads to better outcomes.

Joe Eletto: (17:54)
Yeah. And I was going to follow up with this, and you kind of answered it, but I guess we can extrapolate on it a little bit. And some companies approach diversity and inclusion as belly buttons, as optics, as, look, we have a gay person, throw us a bone. So how do we push back on the tokenism, when data and business case here you will make money, this is good for business. How do we push back on those companies that say nah, it's just not for me?

Todd Sears: (18:21)
Well, there's a great Peter Drucker quote that I like, when he's Mr. ... At any of the MBA schools really do a lot of Peter Drucker focus, and he has this great quote, which he says, In business, you don't have to change. Survival is optional." And I really look at it in that way with all these conversations. You shouldn't be required to have to do these things, but if you're a forward-thinking business in today's world, purpose matters. And the consumer actually does care what you as a company do with your employees, in your supply chain, how you address climate, how you address LGBTQ people, Black Lives Matter. And the tie-in to me, as well, is if you look at the data that shows that people don't actually trust the government, people do trust CEOs in business now. And over the last ten years that has dramatically changed. Ten years ago it was risky for a CEO to speak out on gay issues, for example. Now it's actually risky for companies not to have some sort of perspective.

Todd Sears: (19:19)
So I think that the tokenism is one key piece of it, and I think it really depends on how the companies approach it. It goes back to opportunity versus problem, right? A great example I love from research on the trading floor, testosterone levels on the trading floor go down if you have a better gender balance, which leads to less risk-taking, which leads to better returns, right?

Joe Eletto: (19:42)
Yeah.

Todd Sears: (19:42)
That's not saying that you need to hire more women because you need to hire more women. It's saying a better gender balance gets you better outcomes. Malcolm Gladwell's Blink book, I think, is a great example as well. He talks about symphony orchestras, and the percentage of women that were in symphony orchestras in 1980 was something like 4%. And there was an audition, that one of the people auditioning had a connection to the conductor. And so they decided to do the auditions blind. And so all of the folks auditioning for this role went behind a screen, played their piece. And the conductor, two-thirds of the way through, said, ah, that's it, that's the person, that's who I want, and out walks a woman. And she's a, I think it was, a brass instrument. And he said, well, women can't play a brass. You don't have the lung capacity, you're too small, let's do this again. He does it again, points, says that's the person I want, out walks the same poor woman.

Todd Sears: (20:28)
And he ultimately hired her as second chair. She still had to earn to go to first chair, which is complete BS, but ultimately symphony orchestra auditions now are all done blind. What percentage of symphony orchestras are now women? Roughly 40%. They didn't do it because they needed more women, right, as a tokenism, right? It was they needed the right people with the right skills to make the right sounds, to make the great orchestra. So I think the idea of removing blind spots, and actually having people there for their skills and their, I would say, what they bring to the table, versus their gender ethnicity orientation, is how companies should look at it. Unfortunately. too often companies don't, and there's this balance of holding companies accountable for that.

Joe Eletto: (21:08)
Yeah. And you actually just reminded me of my, I mean, in my past life I was an opera singer. So I went to school, undergrad and grad, for music.

Todd Sears: (21:14)
Nice. That's awesome.

Joe Eletto: (21:14)
So having my friends go behind the wall, and it was amazing. I was like, oh, you can't really do this for music, for singing actually. I don't know if it would work. They can't tell if you can emote or anything, but it's imagine if that was done more broadly.

Todd Sears: (21:29)
Yeah, and companies are looking at that. There's some companies that on resumes they'll take off people's names, because that can be an identifying factor, or taking people's universities off, so that they don't do the oh I went to Duke too kind of frat guy sort of thing or what. So removing opportunities for people's blind spots to sort of overtake the reason is smart.

Joe Eletto: (21:50)
Yeah. I want to want to turn to something that's been on no one's mind the past week, and I guess that's politics and the election. Nothing too salacious or scandalous, I promise, but I just want to get your opinion on what a Biden/Harris administration would look like for LGBTQ rights. Obviously we had a surprise, honestly, but major victory this summer, with Title VII of the Civil Rights Act. But today, I believe oral arguments are beginning for Fulton vs. Philadelphia for Catholic services. So everyone, Democrats, pro-gay, but what does that translate to you, and how are you going to be advocating with the new, with the change of administration?

Todd Sears: (22:33)
Well, I would say a few things. I think, one, it's a mistake to assume that LGBT inclusion is just a democratic issue. I think there are significant numbers of Republicans, Independents, who look at discrimination is bad for business, or bad for the country, or bad for themselves, their families. Ken Mehlman, who's an Out Leadership board member for many, many years, organized the Republicans Amicus Brief for marriage equality. Paul Singer has spoken at our summits, Stan Loeb. There are a lot of folks who you would not necessarily put in the camp, per se, of liberal support, and yet they do support inclusion, which I think is just worth pointing out. And because I think as we go forward as a country, 71 million people voted for Trump, and they can't all be bad folks who are anti LGBT. In fact, I don't think anti-gay animus was a driver for them. I think a lot of people looked at the economics, and that was more of a driver.

Todd Sears: (23:27)
Unfortunately, for minorities and LGBT folks, politics is personal, and I think that's what kind of got lost a lot in this election, right? That folks who are not LGBT, or from a majority community, or aren't Black or Hispanic or immigrant or Muslim, don't necessarily understand the fear that so many minorities lived under for so long of losing our rights. If you look at the LGBTQ in particular, trans folks have lost significant rights in the last four years, gay people have been discriminated against. Bostock was a great example from a support perspective, but in 37 States you can still be criminalized for having HIV. You can still just, the sexual orientation non-discrimination, included employment, but not in housing, so gay and lesbian people can still lose their housing across the United States. Gay adoption has been removed from so many states. There's so many elements of our just basic humanity and human rights that have been taken away/threatened.

Todd Sears: (24:24)
And I think that's what is hard for folks who are not part of these communities to necessarily understand. So when you're voting for someone who says those rights shouldn't exist, you're literally voting against my own humanity, and my rights to exist, and that's hard for some folks to take. So that idea, I think, is something that has gotten lost, that I think will, under Biden/Harris administration, be, I think, obviously more positive from an LGBTQ perspective, from a minority perspective. Everyone that I've spoken to in the last week just feels like we finally can exhale, and I think that's a very common sentiment.

Todd Sears: (24:59)
But at the same point, I think we've got to do a great, or a better job, of building bridges among folks who did not understand why it mattered, and educating folks, and I think that is on us to create those conversations. As it relates to LGBTQ in particular, I think we will see a lot of support from this administration, just like we did from the Obama administration. And I do think the case that you mentioned, if I were to make a prediction, I do think we will have challenges with religious freedom going forward, and that will be at the Supreme Court level. I think there's a misconception that there is a religious right to discriminate, that people's closely-held religious beliefs give them the right to infringe on my civil rights, which is not the case. We should never have the right to discriminate against anyone based off of closely-held religious beliefs.

Todd Sears: (25:45)
Everyone has the same right to life, liberty and pursuit of happiness. And my marriage or relationship, or whatever, does not infringe on anyone else's civil rights. And when people have actually gone to court, and they've been asked to explain how marriage equality somehow impacted their marriage, they were not able to do it. So there are, I think, a lot of challenges we have still ahead of us, but I'm excited about the direction our country is heading, and the opportunity to continue to create this conversation.

Joe Eletto: (26:13)
Absolutely. Pivoting off of that, we escaped without any major, major declarations.

Todd Sears: (26:19)
Twitter's blowing up right now, I don't know.

Joe Eletto: (26:21)
Absolutely. Our lights are going-

Todd Sears: (26:24)
Your followers are just going nuts.

Joe Eletto: (26:26)
So, representation is tremendous. I know we touched on it in the beginning. I just want to go back, because we have an anecdote from yesterday. We had a SALT Talk featuring two Black venture capitalists. And at the end, our moderator remarked that she couldn't identify many other instances, if any, of two Black VCs having conversations on a platform, not to toot our own horn, but such as SALT, such as, well, such as Out Leadership, that it just isn't happening as much as possible. And then sometimes, when you're on the other side of this - I don't know if you've had this experience, and I'm curious to know your thoughts - you program these amazing, robust conversations, and then you almost have to get people to kind of care. And it's a chicken and egg of how you get people in the room to witness what's going on, and what amazing ideas are happening.

Joe Eletto: (27:19)
So I'm just curious of your thoughts on how we continue to promote people. Is it just that we have to continue putting them out there, making their voice heard, and promoting them as much as we can with the platform that we have?

Todd Sears: (27:31)
I think the last piece of what you said, I think, is the right answer. So one of the learnings, I think, from the Black Lives Matter movement, was the idea that significant numbers of Black Americans did not have access to a platform to tell their stories, and to be seen and heard, as well as to fight systemic racism that still does exist in our country. So one of the things from Out Leadership perspective we've been trying to do is find opportunities to use our platform to share diverse voices. We're actually doing a big announcement tomorrow about a new Black/Trans initiative that we're kicking off in that same way, bringing an amazing leader onto my team, which I'm excited about.

Joe Eletto: (28:08)
Awesome.

Todd Sears: (28:09)
But the idea that, take Allies for example, and I think this kind of ties into one way to look at your question. The idea of being an ally to the Black community, to the gay community, to any of these marginalized communities, is that you are lending your voice, your power, your platform, so that those who don't have access to that platform can create some sort of visibility for themselves, and create opportunities for conversation. So as you're convening conversations, and using SALT's platform to bring together Black VC's, I think that's fantastic. That's, as we were chatting before, it's one thing to do it in an ecosystem of folks that would ordinarily expect to see such a conversation. And it's really, I think, probably a whole lot more impactful to do it in an ecosystem where that's not the expected conversation, because ultimately we have to reach more than just the choir. And I think that's the opportunity that you guys are creating. And I think as we go forward, from an Out Leadership perspective, that's what we're also trying to do as well.

Joe Eletto: (29:11)
Yeah. And I'd like to point out - this might be a milestone. I'm going to have to go back and double check - but I think this was the first SALT talk with two out members of LGBTQ community, so I can high five you through there.

Todd Sears: (29:23)
Awesome.

Joe Eletto: (29:24)
But turning to, and turning again - I have a really good way of getting to more somber things - COVID, turning to COVID, obviously we're virtual, we're not together. How are you guys responding to the COVID pandemic? What have you heard from your member firms, maybe from yourself or your own experiences, about the experience of people in the LGBTQ community? How are we disproportionately affected, if at all?

Todd Sears: (29:50)
Yeah, so we actually could convened as part of ... I think when we went virtual in March, we convened after the first conversation on HIV, LGBT and COVID, and sort of the intersections thereof, because there was a huge fear that HIV positive, and folks with AIDS, would be disproportionately impacted from a COVID perspective. And interestingly, so we had the head of Weill Cornell Medicine, and the president of Mt. Sinai, who's actually openly gay as well, discussing those issues. And fascinatingly, folks with the HIV and AIDS - not to be only I'm thinking that only LGBT people are HIV positive, by the way - were actually not at a greater risk, which was interesting, primarily because the medications that people are taking, including Gilead and Remdesivir, that ultimately was being used to treat COVID now, so maybe it was a silver lining, if you will.

Todd Sears: (30:38)
From an LGBT community perspective, I think the data is actually that we were not disproportionately affected, but Black and brown communities are and were, and that's across the United States. There is intersection there, but economics really do sort of drive a lot of that, and access to medical care, access to space, right? There are a lot of economic indicators that predispose people to be much more impacted by COVID. And unfortunately, the Black and brown communities of our country were much more impacted than the LGBT community, which leads to all kinds of other not necessarily positive outcomes as well. And it underscores the need for better inclusion, and more of us to understand what the situation is in Black and brown communities across the country.

Joe Eletto: (31:27)
Absolutely. Turning to Out Leadership, I know you guys are doing your conference, obviously, virtually. I wanted to see if you had anything you could share about that, what's going on, what the timing of that is, and how people can potentially be more involved with Out Leadership.

Todd Sears: (31:41)
Yeah. So when we went virtual in March, I decided that we would not do anything virtually that we wouldn't have done post pandemic. And so in 2019, we had 57 events around the world. In 2020 thus far, we've had 130, including a global virtual Pride platform we created called Proudly Resilient. We had 41 events all across Pride month, and all of them benefited 21 intersectional and LGBT nonprofits, which I was very proud of. Our talent program has expanded this year as well, so our OutNEXT program, we just launched a global curriculum in March, I'm sorry, in August. We had 2,500 young leaders from 110 companies and 27 countries participate in that platform. Our European summit, which is hosted by HSBC, happened in September. Our Asia summit, which was also hosted by HSBC, and EY and KPMG, just completed in October. We're about halfway through our U.S. summit, and I kicked off our Australia summit last night.

Todd Sears: (32:39)
And the I'd say the thematics are similar to what we're talking about today, the idea that business is continuing to drive change, that companies are driving change around the world, CEOs using their platform matter significantly. We have our second CEO round table this afternoon. And we had 17 CEOs and chairmen on Monday, and we have another 13 this afternoon, and we convene those round tables with the opportunity to share our data and research. So we've published four pieces of research this year, including the first-ever global ally research, which I can share with you guys to share. We had 5,000 leaders across 11 countries, then we had 3,000 leaders in the United States. And then we went back out in the field post-COVID, to understand really what the difference was, and then the idea of really making it actionable, so that leaders need to actually come out as allies, we say, just like LGBTQ people have to come out, allies have to come out, and the impact that that makes in companies and cultures now.

Todd Sears: (33:34)
So there's a lot of conversation around obviously working from home, and what that impacts creates. How does that impact people's covering, right, hiding an aspect of their identity in the workplace. And ultimately what has been really kind of fun, and we've had probably 40 different CEO sort of one-on-ones that I've interviewed this year, that the conversation around the Zoom box is everybody's equal, right? You can't really talk over folks. It's not a board table where somebody is at the head, et cetera. There are some interesting positives that, of course, go with the challenges of working from home. But from a cultural perspective, the ability to have more diversity be heard is something that a lot of companies have said is a silver lining coming out of this.

Joe Eletto: (34:17)
I like that Zoom is the great equalizer.

Todd Sears: (34:19)
Yeah, it is.

Joe Eletto: (34:21)
That's fantastic.

Todd Sears: (34:22)
And people can't always, you know, I've got my orchid, and that's nice, but my dog could bark any moment. And people want to manage their profile, and their look and feel as much as they can, but you can't, right? I mean, you've got the CEO with the kid walking in behind him, or the cat walking across. That humanizes people, and I think that makes people more authentic. And I think that's not a bad thing. I think that's a good thing.

Joe Eletto: (34:47)
Yeah. I mean, I'm coming to you from my living room. So obviously this is just my stuff, so I'm sorry I couldn't clean up too much, no.

Todd Sears: (34:54)
It's okay. Same, same, same.

Joe Eletto: (34:56)
Exactly. Just to bookend this, I wanted to see if you would share your best advice to people listening today, who want to start or increase change at their firms. Maybe they're not part of Out Leadership, maybe they don't have representation. I personally am lucky to have someone here who is a mentor for me, and that they are out at the firm, and that we have very supportive leadership of people bringing their genuine selves to work. As small a firm as SkyBridge is, as SALT is, I was happy to find that. So people who aren't as fortunate, or in positions, what do you think they can do?

Todd Sears: (35:35)
Well, I'd say a couple of things. From a firm perspective, we'd welcome and love more companies to be members of Out Leadership, and I'm happy to talk about that any time, any place, anywhere. And we can send info, but info at Out Leadership is the easiest, in terms of reaching out there. I would say companies have the opportunity, and leaders have the opportunity, to really look inward, and figure out how they can leverage the platform that they have, right? So we have companies that are training 50 people, and we have companies that are 300,000 people, and the size of the company really is irrespective of the leaders that are leading the company.

Todd Sears: (36:11)
I reflect on Noel Quinn, the Global CEO of HSBC who's on our board, who talked about his leadership style, which is he has roughly 300,000 people that work for him, and he looks at it as if he has five. And he literally says how would I manage with just a team of five? That's how I manage with a global organization like HSBC. So being available where he can, being authentic, being transparent, all of those things really matter. And I think, from a diverse perspective, and what these companies can do for their employees, and in the communities that they're working in, I think that's the approach. And it really does just take visible leaders, allies and LGBT folks, and people of color. All of the different groups have an opportunity, I think, to lead. And it really does require corporate support.

Todd Sears: (36:56)
So I'm glad that I'm glad to hear that you have that with SkyBridge and SALT - I'm not surprised - but that's really important. I think you can never underestimate the impact. Whether it was David Marshall Grant on me when I was 18, or any of the CEOs I've had the pleasure of working with over the years, that you never know the impact that you're going to make. And being open to creating that impact, I think, is a huge gift that leaders can give to their employees, to their clients, and even to their families.

Joe Eletto: (37:22)
Fantastic. Well, Todd, this has been awesome. I'm glad that we're able to do this now on a yearly basis. Hopefully we'll make it more frequently, and looking forward to the partnership between SALT and Out Leadership for the coming year. But I want to wish you guys the best for your conference going on. I can't imagine the lift of doing a fully-virtual conference. I am not envious right now.

Todd Sears: (37:45)
Luckily I have a great team. They're the ones that do all the hard work. But I will send you the link that you can share with folks and people. We have two public programs for each of the summits, and very happy to have any of your constituents join the U.S. or Australia, and-

Joe Eletto: (37:58)
I would love that.

Todd Sears: (37:58)
And, yeah, that's exciting. Well, thanks for having me.

Joe Eletto: (38:02)
[inaudible 00:38:03].

Todd Sears: (38:02)
It's nice to see you, at least through the screen, and I'm excited to continue to have the conversation with you guys, and with SALT, going forward.

Joe Eletto: (38:10)
Absolutely.

Jeff Sonnenfeld: 5 Qualities of an Effective Leader | SALT Talks #110

“Don’t define yourself by your business card. You can get a new card.”

Jeffrey Sonnenfeld is Senior Associate Dean for Leadership Studies at Yale University’s School of Management and The Lester Crown Professor of Management Practice, as well as the Founder, President of THE YALE CHIEF EXECUTIVE LEADERSHIP INSTITUTE– the world’s first “CEO College”. Previously, Sonnenfeld spent ten years as a professor at the Harvard Business School. He has been named one of the world’s “ten most influential business school professors” by Business Week and one of the “100 most influential figures in governance” by Directorship. He is also a winner of the Ellis Island Medal of Honor.

There are five qualities that make up an effective leader: personal dynamism, empathy, authenticity, inspirational goals, and boldness. Any CEO’s story involves a great deal of setbacks that required resiliency and determination in moving past. That process involves honestly facing the problem, engaging your network of acquaintances, and ultimately rebuilding yourself into something better. “It's a failure that punctuates success. It's a defining moment… those who make it through are forever changed.”

It is important for a leader to demonstrate the ability to let go of grudges or personal slights. President Biden serves as an example of someone famously known for his willingness to move past temporary disagreements. This lays the groundwork for future compromise and collaboration between opposing sides.

LISTEN AND SUBSCRIBE

SPEAKER

Jeffrey A. Sonnenfeld.jpeg

Jeff Sonnenfeld

Senior Associate Dean for Leadership Studies

Yale School of Management

MODERATOR

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Anthony Scaramucci

Founder & Managing Partner

SkyBridge

EPISODE TRANSCRIPT

John Darsie: (00:07)
Hello, everyone, and welcome back to SALT Talks. My name is John Darsie. I'm the managing director of SALT, which is a global thought leadership forum and networking platform at the intersection of finance, technology, and public policy. SALT Talks are a digital interview series with leading investors, creators, and thinkers. What we're really trying to do during these SALT Talks is replicate the experience we provide in our global SALT conferences, which is provide a window into the mind of subject matter experts as well as to provide a platform for what we think are big ideas that are shaping the future.

John Darsie: (00:41)
We're very excited today to welcome Jeffrey Sonnenfeld to SALT Talks. Jeffrey is the Senior Associate Dean for Leadership Studies at Yale University School of Management and the Lester Crown Professor of Management Practice as well as the founder and president of the Yale Chief Executive Leadership Institute, which is the world's first CEO college. Previously, Jeff spent 10 years as a professor at Harvard Business School. He's been named one of the world's 10 most influential business school professors by Business Week and one of the 100 most influential figures in governance by Directorship.

John Darsie: (01:18)
Jeff received his AB, MBA and doctorate from Harvard University. He's published 200 scholarly articles and seven books, including bestsellers such as The Hero's Farewell, Leadership and Governance from the Inside Out, and Firing Back: How Great Leaders Rebound From Adversity. He's a commentator for CNBC, a columnist for Chief Executive Magazine. He's frequently cited as a management expert in the Wall Street Journal, Fortune, the New York Times, and other global media. He's the first academian to have rung the opening bell of both the New York Stock Exchange and the Nasdaq stock exchange, which he has done a dozen times.

John Darsie: (01:57)
Just a reminder, if you have any questions for Jeff during today's SALT Talk, you can enter them in the Q&A box at the bottom of your video screen on Zoom. Now I'll turn it over to Anthony Scaramucci to moderate the talk. Anthony is the founder and managing partner of SkyBridge Capital, a global alternative investment firm, also a member of the Yale CEO community. So Anthony, with that, I'll turn it over to you for the interview.

Anthony Scaramucci: (02:18)
Jeff, it's a real pleasure to have you with us, and I'm also thrilled at the way you're dressed. In addition to you and I both being better looking than John Darsie, we are impeccably dressed on a relative basis, and so I'm thrilled about that. I just wanted to make sure I made that point before we get started.

John Darsie: (02:35)
Just don't show your cargo shorts under the camera, Anthony. Then you'll lose all points for being well dressed.

Anthony Scaramucci: (02:41)
Well, actually, they're cargo pants. Okay, see that.

John Darsie: (02:44)
Oh, it's getting cold out, so you got the cargo pants out. Gotcha.

Anthony Scaramucci: (02:46)
I have full length pants on for the first time since March of 2020, but that's a whole other topic.

Jeffrey Sonnenfeld: (02:51)
Just as long as the ties give us a little sense of authority, that's awesome.

Anthony Scaramucci: (02:53)
There you go. That's the whole point. Now, Jeffrey, I ask everybody this question. You've obviously got this amazing resume. You're probably one of the most well-connected people in the business community, and deservedly so, because your forums are second to none. But tell us something about your life in terms of growing up. Where did you grow up? How many siblings did you have? Why did you take this academic... You could've done anything, obviously. You're a polymath, but why did you take this bent?

Jeffrey Sonnenfeld: (03:26)
Well, Anthony, thanks for asking. When John Darsie introduced me and then closed off by suggesting if people have any questions that they can go into chat, I'm glad he didn't say questions or complaints. Because after that fulsome introduction, I think probably a third of the people hate me already. In fact, as John got to the fourth or fifth paragraph, I started to slightly dislike myself as well. I think I probably censure that stuff, so let me begin by apologizing for giving you a little too much about Jeff. But if we're going to talk about childhood, that's fair game. That's open season, and I'm proud of that as you are about your origins, Anthony.

Jeffrey Sonnenfeld: (04:03)
My mom was an immigrant, and she came to the country and was very active as a healthcare planner, a community activist, always failing causes and losing candidates. She was paralyzed as an adult. As a 27-year-old gymnast, she got a particularly crippling form of chronic rheumatoid arthritis, so one or two major surgeries a year throughout her life. But she was a great hero and a great role model.

Jeffrey Sonnenfeld: (04:31)
My dad was a small merchant, men's clothing, but I'm colorblind if you have any complaints about my matches here. But so was he, which was incredible. He also was a volunteer fireman, so that was the background. My brother's an attorney at a great firm, Morgan, Lewis & Bockius, but that's the family team, childhood family.

Anthony Scaramucci: (04:51)
Very cool. I want to ask you about leadership, which is such a vague thing. And for me, I often find that leadership in itself is sort of invisible. It's very hard to describe. Some people have it. Some people don't have it. Is it a learned trait? Is it something people can acquire and learn? Is it something that people are born with? You're one of the leading experts globally on leadership, executive management, et cetera. What does it take? What is it? What do all these people have in common?

Jeffrey Sonnenfeld: (05:26)
Well, as you open up with that disclaimer, can it be taught? I think it's right to ask that. Dizzy Gillespie had once said, the great jazz musician, is that, "If you've got to ask what jazz is, you'll never know. You'll never get it." Some people suggest that there's a mystique about leadership, that if you have to ask, you'll never get it. There are even some great articles in Harvard Business Review, a great class of Abraham Zaleznik, a psychoanalyst, saying, "You're either a manager or a leader. You can't morph from one to the other."

Jeffrey Sonnenfeld: (05:59)
I don't completely agree with that. I think there are some things that you can complement yourself with either in your management team, people around you, or figure out how to leverage your strengths and compensate for areas that aren't so strong. But if you had to think of something other than intelligence and resilience, which I think we'll talk about later, there are five qualities, putting aside those two. One of them is personal dynamism, your ability excite a group. That you can use colorful language and imagery and that it's really evocative.

Jeffrey Sonnenfeld: (06:30)
The second one is empathy, the caring dimension. The first one, by the way, you have to say President Trump's pretty good at it. That second one, not so good. Empathy, it's caring and knowing who's around. It doesn't always take a lot of money for recognition and concern, but to make it real. A third one is authenticity. That's the moral dimension. That people won't walk out on a limb for you if they don't trust you.

Jeffrey Sonnenfeld: (06:54)
A fourth one is inspirational goals. That you stretch people, not to the point where they snap, but they're not happy with the status quo. And the last one is boldness, some kind of courage. Not recklessness, but moving things forward. You put those five together and, believe it or not, by taking a look at research on 500 highly successful top leaders, CEOs across countries, this is surveying the management team and not asking the boss what makes she or he such a great leader, and they come up with those qualities. We can predict about 20% of your financial returns, your accounting returns, about 20% of your market performance, which in my line of work, that's a lot since there's so many other sectoral and economic things happening out there. That on these dispositional qualities, they move the needle a lot.

Jeffrey Sonnenfeld: (07:39)
Although since we're good buddies, there are limits to it. Just between us, it's only good for the first 10 years as a CEO. Then other things kick in.

Anthony Scaramucci: (07:47)
Listen, it's fascinating. I had to give up my board seat at the Business Executives for National Security when I joined the Trump administration, but in conversations with people at the Pentagon and military brass, traveling with the American military, they always emphasize organizational structure. They emphasize chain of command, delegation, having the right level of reports. The Pentagon always says, "You shouldn't have more than six reports," as an example. Then we watched the post-World War II order in corporate America, sort of the Don Draper America where everyone had served in the military and you had that man in the gray flannel suit and that corporate structure.

Anthony Scaramucci: (08:32)
Now you fast forward 80 years, and we have a different dynamic in terms of corporate culture. I was wondering if you could comment on the cultural differences between the post-World War II era, the military, where we are today. How are they similar? How are they different? And where are we going in terms of our leadership models?

Jeffrey Sonnenfeld: (08:53)
Boy, that's really a large question. Because you're right, military has been fantastic for execution. We don't generally go to the military for invention, creativity. We go different places for different things. Chain of command, you're right, they're selling reliability and not creativity. We don't want people to be arguing with the boss, we want this foxhole or that foxhole. You just take it and go. That's the challenge.

Jeffrey Sonnenfeld: (09:21)
Now, I was with a preacher recently who said, "The last time somebody had a dozen direct reports, they crucified him." That sounds a little blasphemous, but often six to seven is a rule of thumb many times in routine execution. But if you just look at the life you've led, Anthony. You've written very good pieces yourself, great books on entrepreneurship and startups. And you know that at the startup, that's just crazy. The model is much more like a hub with spokes coming off of it, and you rotate around. Sometimes you're the financial wizard one day. You're the HR guru the next day, the market wizard another day, and that you're the execution god yet another day. Is that there's a certain fluidity in startups, so stage of life matters. As you also-

Anthony Scaramucci: (10:04)
And Jeff, for 11 days you could be the communications director. It doesn't have to be just one day. But go ahead.

Jeffrey Sonnenfeld: (10:09)
That's funny.

Anthony Scaramucci: (10:11)
I didn't want to lose your train of thought, but I thought I had to interject, that it was an appropriate moment.

Jeffrey Sonnenfeld: (10:14)
It's funny you mention that because is that the fluidity you brought in there with your boss is not expected. In fact, I actually had discussed whether or not he should let Bob Woodward in with the president, and I referred to what Bob Woodward said in one of the books on Clinton, the Clinton White House, the agenda. He said, "It was like watching a soccer team run down the hill, everybody chasing the ball." And Woodward meant it as a criticism, but neither Clinton nor Trump saw that as a criticism. They said, "People like you and he like to be entrepreneurial at the top even of a big bureaucracy." So it depends on life stage.

Jeffrey Sonnenfeld: (10:52)
For a turnaround, it's very different. You need a certain fluidity. Macro or micro. Some people like Jack Welch in his best days, and he wasn't perfect, but he could go very micro and very macro. These uniform rules don't apply. It really matters the stage of life. You're suggesting also by industry, whether or not you are in a fluid new industry. In technology or entertainment or something, it's very different than in a business that is much more a command and control, military-like, a utility or a big commercial bank.

Anthony Scaramucci: (11:26)
Well, we both know Jim Collins, and we know the definition of level five leadership. I won't bore people with that definition, but that's the exemplary leader. One of the things that he says is absent in that case is charisma. Sometimes you don't need charisma to be that level five exemplary leader. I guess my question is about culture, how important it is to organizations. What are the ingredients to culture? Where does charisma come in? Where does charisma not be productive? What are your thoughts there?

Jeffrey Sonnenfeld: (12:03)
Well, that's a good question about culture. Because when I talked about those five elements of great leadership, those actually are five elements of charisma, but it isn't just back slapping flamboyance. That's the personal dynamism. Another quality of charisma is that empathy, that people bond with you and think you care about them. That's a different aspect of charisma. And that authenticity dimension, as Lee Strasberg had once said, the Actors Studio god, is the essence of great acting is authenticity, believability.

Jeffrey Sonnenfeld: (12:34)
Once you can fake that, you've really got it made. But is that those are some qualities, of course, that really matter of charisma. Charisma isn't just flamboyance and cheerleading. There are ways that you can be charismatic and have a charismatic aura about you without being a showman.

Anthony Scaramucci: (12:51)
Teachable. Is charisma teachable?

Jeffrey Sonnenfeld: (12:53)
It can complement yourself. I think there are ways. There is a notion of charisma of an animal spirit is thought to be innate, and some people are born with more or less. But you can compensate for it. You can fortify qualities that take you from being quite the flat wallflower to actually show concern for others. Sometimes you go a little bit beyond, learn how to ask questions, and then listen to the answers. We both know TV anchors that go through a routine, and you can just see, fine, the show's mine. They're not even listening. I'll talk about what I want to talk about, as opposed to somebody who really engages with you like you are right now is that you're having a conversation. That's much more charismatic.

Anthony Scaramucci: (13:37)
Well, yeah. Listen, I think it's super important to be an active listener. Otherwise, how are you going to learn anything? I mean-

Jeffrey Sonnenfeld: (13:43)
I'm sorry, what was that? I missed it. No, just joking.

Anthony Scaramucci: (13:45)
No, no. I got the joke, but I've also been guilty of running over people as well, so far from perfect. But the resilient leadership book that you wrote, Firing Back: How Great Leaders Rebound From Adversity, I got a lot out of that book, actually. It was very resonating for me. I was wondering if you could tell us why you decided to write that book. What triggered that topic of leadership adversity, and why it's so important for people to have the traits of resiliency?

Jeffrey Sonnenfeld: (14:18)
Well, I know, Anthony, for you and for me, this is purely an academic exercise, that we've never had any setbacks in our lives.

Anthony Scaramucci: (14:24)
Nope, not me, especially not me.

Jeffrey Sonnenfeld: (14:26)
No, me neither. But friends of ours have.

Anthony Scaramucci: (14:29)
Yeah, exactly.

Jeffrey Sonnenfeld: (14:30)
What I learned is that everybody-

Anthony Scaramucci: (14:30)
My life has gone up in a perfectly straight line, Jeff.

Jeffrey Sonnenfeld: (14:33)
Perfectly linear.

Anthony Scaramucci: (14:36)
But I'm also the queen of denial, right? I'm also Cleopatra. I've lived in denial, and I think I live pretty good at six-three, 190 pounds. But anyway.

Jeffrey Sonnenfeld: (14:45)
You've always been able to laugh about it at every moment as well as be honest about it, and that's what's so critical is I was finding and it was in the late 1970s. Shouldn't admit that you're this old, but in the late 1970s I started to study CEOs and top corporate leadership, and I kept finding that people were talking to me about these setbacks they had. I thought it was some false humility, and then I realized they all have a Job story or more, like the Book of Job from the Bible with all this adversity. And they're proud of having risen above those life setbacks.

Jeffrey Sonnenfeld: (15:17)
You don't usually find management training programs or leadership courses or books that talk about failure. It's always onward and upward, the Norman Vincent Peale stuff and the winning friends and influencing people. Those approaches don't acknowledge the reality of setbacks. But if you take a look at the work of Joseph Campbell, the great anthropologist, and he wrote a book called Hero of a Thousand Faces looking across cultures and continents and centuries, is every hero went through life stages, whether or not it's Moses or Jesus or whomever. And in those life stages that there were a point where the dragon slayer starts to resemble the dragon themselves. There's a great setback, and it's resilience from that adversity that's so critical. That it's a failure that punctuates success. It's a defining moment.

Jeffrey Sonnenfeld: (16:08)
Now, most people get filtered out through the setback, but those who make it through are forever changed. That's what the research was all about, and I just happen to have a copy of the book right here by shrieking coincidence of Firing Back. One of the lessons in there is you got to face up to it, as you did. You're the first one to make fun of it, to go on the night shows, the TV shows and everything to talk about what you did wrong, how you got snookered and how it wouldn't happen again. But people think they can sweep it under the carpet and bury it.

Jeffrey Sonnenfeld: (16:38)
Take Scarlett O'Hara's advice, tomorrow is another day. No, that's not right. Or all these stress therapists, PhD psychologists that tell you to go out and do yoga and tai chi. That's fine, but you have to face up to the problem. Everybody knows about it. CEO friends of ours who've gone off after they got fired and are waiting for their call back, that doesn't happen.

Jeffrey Sonnenfeld: (16:57)
Second, you don't do it alone. You have to recruit others in. You engaged with a lot of people. Not to make a role model of you, but you really should be as a role model for resilience, is how to get others on board with you. The research on this, on social networks, going back decades. And Mark Granovetter at Stanford did some it originally decades ago is that when you're in a setback, it's these loose ties that you have, people you knew in college or unions or high school or not necessarily family members that give you support on an emotional level. Recruiting others that you know in a secondary way, they give you job leads and opportunity.

Jeffrey Sonnenfeld: (17:31)
A third one is to rebuild, to show you could rebuild. Whatever went wrong is you need to show some exoneration or contrition one way or the other. But when some prince goes marching around in a Nazi outfit and said, "Well, if I offended somebody... " Or he goes off to celebrity rehab, that doesn't do it. You've got to show authentic contrition or prove you did nothing wrong. Like Martha Stewart going off to prison, I don't think she should've. I think she should've screamed to the mountaintops she didn't do anything wrong, but that's a whole nother story.

Jeffrey Sonnenfeld: (18:01)
Then you've got to prove you can still do what made you great. No matter how you feel politically about President Trump, you go down the West Side of New York, you see his name on top of those building, which he doesn't own. But to get the deals done, they still needed to put those brands. And things where somebody can rise from setbacks. His bankruptcies, which you know, it's the R word, restructuring, where we get in trouble. But that resilience from adversity is quite inspiring to show that you can still do what made you great.

Jeffrey Sonnenfeld: (18:31)
Then you look at, say, Jimmy Dunne of Sandler O'Neill, one of the most remarkably resilient leaders I know. Is they lost a third of their workforce in 9/11, and he went to work right away when everybody thought that they were given up for dead. Even CNBC announced that they were closing. He went on CNBC, never done an interview in his life, and said, "Oh, no. We're not. These are my best friends. We're going to bring this back to life. We're going to help the public safety workers who perished trying to save our people, running into buildings that we were running out of." They devoted themselves, put their partners' wealth back in, paid off the families who suffered the losses.

Jeffrey Sonnenfeld: (19:06)
It is a remarkable story of resilience, but they don't define themselves by the past. They always have a tribute to the 65 people they lost and all the rest, and they took care of their benefits and health care and education for the kids. But they define themselves by the future. That's so important to not look backwards, or you become a culture of mourning.

Anthony Scaramucci: (19:26)
It's teachable, professor?

Jeffrey Sonnenfeld: (19:29)
Yeah. It's teachable.

Anthony Scaramucci: (19:31)
That one is definitely teachable, I believe. That's why I want you to expound on that.

Jeffrey Sonnenfeld: (19:35)
As Nietzsche says, "What doesn't kill me makes me stronger." Look at you. Look at all these resilient leaders out there. I think that that's a really critical lesson.

Anthony Scaramucci: (19:45)
Well, what I'm always grateful for to you is you gave me an opportunity to speak after I got fired from the White House at the Yale CEO Summit. That was very nice of you. One of the reactions-

Jeffrey Sonnenfeld: (19:55)
Well, we knew like Steve Jobs or Bernie Marcus at Home Depot, that you were only going to be better from the experience of having been pushed... Or Michael Bloomberg, all these guys got fired. You name it. If they're great, they probably had a major career setback. The way you handled it was a fantastic model for everybody.

Anthony Scaramucci: (20:13)
Well, it's very nice of you. We can keep going. I'm not even going to allow John Darsie to ask any questions if you're going to keep going on like this, so we can keep going. But I was actually going to bring up a point. It's very sweet of you. I appreciate that. It was a very tough period of time for me. Jeff, there's a lot of young people that listen to these podcasts, these SALT Talks. I guess the lesson here is you got to dust yourself off and you got to not take yourself super seriously. Because once you start doing that, then things can get problematic.

Jeffrey Sonnenfeld: (20:41)
Yes. Don't define yourself by your business card. You can get a new card.

Anthony Scaramucci: (20:45)
Yeah, exactly. Also, you got to roll with life. I've always lived by the adage, Jeff, of the legendary Mel Brooks, relax, none of us are getting out of here alive. So if you can frame it from that point of view, it's make you feel better about what's going on when it's not going well. I was going to bring up something. I was speaking at your CEO conference. I believe it was in the Roosevelt Hotel, actually, which is now being closed. I don't know if you're aware of that.

Jeffrey Sonnenfeld: (21:10)
We should buy it. The place is gorgeous. It's prettier than the Waldorf was, the lobby, that is, the public part.

Anthony Scaramucci: (21:16)
Yeah. There's no question, it's a breathtaking hotel, such a great New York history in there, so many different presidential campaigns trafficking through there, et cetera, mayoral, gubernatorial campaigns. But the reason I'm bringing this up is that I was there and absorbing from your CEOs something I'd like you to comment on. Their relationship with the Trump administration, boy, that was super complex to me. I can give my observations, but I'm more interested in having you give your observations.

Anthony Scaramucci: (21:48)
But I will say one thing that I'd like you to react to. The number one thing when I left that presentation was these guys do not want to be tweeted at. They don't want their corporation, publicly traded, in a presidential tweet, and they certainly don't want their names in a presidential tweet. That was going to create some level of stock market fluctuation and possible communication crisis. I'd like you to elaborate on that. Am I right about that or wrong about that? And then describe in your words the relationship that these CEOs that you're so close to have or have had with the Trump administration.

Jeffrey Sonnenfeld: (22:27)
We've got another two hours, right?

Anthony Scaramucci: (22:28)
Yes. No, you take three or four hours.

Jeffrey Sonnenfeld: (22:34)
As you know, I had a personal relationship not just with Joe Biden but continue, at least until this interview, with President Trump, I think. I haven't had an IRS audit, but at least we get to see somebody's returns. Is that I was the first critic of The Apprentice, that even the New York Times was entertained by it. I was writing a weekly column for the Wall Street Journal at the invitation of NBC, which was then headed by Jeff Zucker, as you know. So NBC would send it to me a day in advance, and Wall Street Journal would print it.

Jeffrey Sonnenfeld: (23:10)
Well, Donald Trump, President Trump, didn't like what I was writing. I called the first episode something like a musical chairs game but a Hooters restaurant. You probably haven't noticed this. He doesn't like a lot of criticism when there's humor at his expense. Have you noticed that? Anyhow, it didn't go over well and he wanted to shut down my reviews. I said, "Hey, that's fine. I don't need to do it." But the Wall Street Journal said, "Let's try another week." And the other week I said, "Boy, I said that first week was the worst portrayal I could imagine of business leadership ever on TV, and Mr. Trump asked me to look at the next week to see if I would reconsider." I said, "All right, so I'll reconsider. He was right. I was wrong. I recant what I said last week. This week's episode is worse."

Jeffrey Sonnenfeld: (23:57)
It got nasty. You can imagine the exchanges and the threats. We ultimately wound up getting together, and as you know, when you're with him, he can be so charming. I had all the outtakes in advance. That's a whole nother story. My wife found them charming too. So we wound up becoming friends from then on because he promised to change the show. Instead of putting engaging, young millennials up for this elimination game format is that he would get these fallen celebrities, which was actually my idea, which he now admits. I didn't think of perhaps Meat Loaf and Gary Busey, but still was the idea of having these fallen celebrities go after each other.

Jeffrey Sonnenfeld: (24:39)
I brought him to one of my CEO summits. And the people that filled the White House Advisory Council, many of those same people who didn't know Trump, they said, "If he's coming in here... " Some of them referred to him as a clown. Some people who the press have seen as very close to him in recent years have said, "If he walks in here at the Waldorf, we're walking out." What happened? He walked in, they walked out. So as somebody who was not quite at that level of corporate leader introduced him, and he was mad. "Why'd those guys leave?"

Jeffrey Sonnenfeld: (25:12)
I pointed that out to him in 2017, and he said, "Well, they're all coming by here now." I said, "Yeah, I wonder why that is." Is they were skeptical of him at our CEO summits. Perhaps, two-thirds or so or more are Republican, and yet it was roughly 70% were surprisingly supporting Hillary Clinton. They didn't support his election, though in 2017 they were quite hopeful. They raced with enthusiasm to those White House Business Advisory Councils, had high hopes on regulatory rollbacks, which they saw. This was large business.

Jeffrey Sonnenfeld: (25:39)
Small business liked him a lot more because he was seen as such a maverick. The regulatory rollbacks and the tax relief they thought was great. However, those one-offs you're talking about which we saw happen in the Republican primaries, we saw throughout his life, those one-offs of Pfizer versus Merck or GM versus Ford, Boeing versus Lockheed, the CEOS did not like that. Then as he started picking on these various companies for doing what they had to do to run their business, whether or not it was Harley-Davidson or Amazon or whatever, that he was calling for boycotts against them. They didn't like that.

Jeffrey Sonnenfeld: (26:15)
So it was after Charlottesville, it's the first time in American history we saw the US business community refuse a call to action when they all walked off following Ken Frazier of Merck's model, walked off the business advisory councils. They started to see him differently and they developed a certain confidence through collective action, whether or not it was on immigration issues or this election, where they have a certain confidence that they recognize, like Benjamin Franklin said, "If we don't hang together, we shall surely hang separately."

Anthony Scaramucci: (26:44)
It's phenomenal stuff, and we could go on for several hours. I'm going to ask you one last question because we have great audience engagement, and so I want to let John answer some questions.

Jeffrey Sonnenfeld: (26:52)
You're sure they're not saying really hateful things that I'm not looking at? Okay.

Anthony Scaramucci: (26:56)
Well, no. No, no. See, we're all sensitized to that sort of stuff, but if you look at my Twitter feed, Jeff, you'll feel very good about the comments they make about you. But this is about executive compensation, and Malcolm Gladwell said a few years ago that it was Curt Flood that opened up the spigot for executive compensation. So for those of you that don't know who Curt Flood is, he was the first baseball free agent.

Anthony Scaramucci: (27:24)
Malcolm Gladwell's position was that as baseball players and athletes started making astronomical sums of money, it left the door open for CEOs who were running very large businesses, arguably more important jobs, to make even more astronomical sums of money. It seems like the spread between CEOs and the average workers and the companies that they're leading has gotten quite high. Why, if you will? What's your opinion of that? Do you think that-

Jeffrey Sonnenfeld: (27:54)
Far be it from me to criticize a far more successful author than I am, but Malcolm Gladwell might've referred to Catfish Hunter more successfully. Also, in fact, if he wanted to stay with baseball, refer to Babe Ruth. And when people questioned Babe Ruth's salary opposed to Herbert Hoover's, it was pretty easy for him to say, "Well, who had a better year?"

Jeffrey Sonnenfeld: (28:19)
We do see often somewhat from left-leaning groups but also in the center and some activist investors about CEO excesses in compensation. That since I've been a professor, which is more than just a couple years, unfortunately, is we've seen roughly a thousand percent, 1,000% increase in CEO compensation, and about a 25% to 35% increase in average worker compensation. People are upset about that and for understandable reasons. The average CEO's making now 278%, 280% more than the average worker, and it used to be 30 times when I started doing what I'm doing. So what's going on there?

Jeffrey Sonnenfeld: (29:00)
Well, some of that is ridiculous and some of it's understandable. We've globalized the workforce, and we have different business units. So some of it, it's apples and oranges comparisons as to who some of those average workers are. Comparing the celebrity athlete to an usher that's working in the stadium is that the magnitude of how many people are executives and how many people are non-executive has changed a lot. There are those two sets of issues.

Jeffrey Sonnenfeld: (29:28)
A third one has to do with performance. I, frankly, don't care how much money Bernie Marcus of the Home Depot or somebody like that made for creating something that wasn't there or Bill Gates, whatever. If there's something of personal risk they put into it and they have really been a big builder as a great entrepreneur, as a great business creator, creating lots of jobs, very philanthropic, fantastic. It's the people who are corporate drones, that are Klingons, that are just getting a large salary because they've hired a comp firm to take a look at benchmarking against other firms in their industry and it doesn't correspond with their performance. That's the trouble, and we see very low correspondence between performance and compensation. We see just a lot of financial...

Jeffrey Sonnenfeld: (30:06)
There's some fairly modest compensated executives with soaring corporate performance, and that's the problem. I'm tempted to name names, but I won't. But one of the world's largest transportation companies, one of the world's greatest retailers have fairly modest compensated CEOs with performance that towers over it. There's one big media baron, which I'm so close to not mention, but he's no longer there. But he was recently. Made more than the next two media barons combined, and their performance towered over his. It didn't make any sense. Anyhow, you got me going. I always avoid this question. Whenever CNBC or somebody wants to talk about compensation, it's such a no-win situation. I avoid it, but for you, I stepped into it.

Anthony Scaramucci: (30:50)
Well, no. Listen, I appreciate it. Look, I want people to make money. I'm all about unlimited upside. At some point you and I will have to talk about the right policies to put in place to make the playing field from an equal opportunity-

Jeffrey Sonnenfeld: (31:01)
We need to work on that.

Anthony Scaramucci: (31:02)
Yeah. We've got to make the playing field from an equal opportunity perspective now.

Jeffrey Sonnenfeld: (31:07)
A livable wage has to be addressed too. You're absolutely right.

Anthony Scaramucci: (31:09)
No question.

Jeffrey Sonnenfeld: (31:09)
And there are some cases...

Anthony Scaramucci: (31:11)
I love the fact that we have the Jeff Bezoses and the Bill Gates in our society and the Elon Musk. God bless them, but I also want to help that kid that's growing up in the blue collar family live the arc of the American dream that we would all love to see happen to he or she.

Jeffrey Sonnenfeld: (31:28)
That's right. As aspirational as they think those high salaries are, the wealth has to be shared a lot more. And again, it has to be linked to performance better. It's tied too much to short-term stock incentives and not enough to long-term investment in that enterprise to create more jobs and to build a stronger business in the US.

Anthony Scaramucci: (31:46)
Well, we got to get there, and you're going to be a big part of that, I believe, in our future. I'm going to turn it over to John Darsie. John tie-less Darsie. There's Shoeless Joe Jackson.

John Darsie: (31:56)
I'm a millennial.

Anthony Scaramucci: (31:57)
And there's John tie-less Darsie.

John Darsie: (32:00)
I'm a millennial. I guess I dress down. At least I'm not wearing athleisure or something, right? But Ken Langone, back to your theme of the value of leadership, he's one that has spoken at SALT several times and has talked about... You mentioned Bernie Marcus earlier, but just the unlimited, incalculable value of strong leadership. And he's always a big critic of these criticisms of executive compensation for companies that really knock the ball out of the park.

Jeffrey Sonnenfeld: (32:26)
Well, John, it's tough enough to match wits with Anthony. I'm so happy you didn't put me in the shadows of Ken Langone. He definitely throws quite a fire of energy out there.

John Darsie: (32:37)
Absolutely. He's not shy about expressing his opinions on the topic.

Anthony Scaramucci: (32:41)
He's not slowing down, Jeffrey. He just turned 85, not slowing down.

Jeffrey Sonnenfeld: (32:44)
No. Johnny Carson once said, "Never follow children and animal acts on stage." If he was around today, he would say, never follow Anthony Scaramucci nor Ken Langone on stage.

John Darsie: (32:53)
This is a joke that I should've left for Anthony, but it's apropos that we transition from talking about Ken Langone to talking about grudges. So Ken Langone famously says he doesn't know if he's going to heaven because he has this just deep hatred in his heart for Eliot Spitzer. But it's an exception to a rule that you write about about the power of not holding grudges. Anthony makes a joke about-

Anthony Scaramucci: (33:14)
Not to interrupt, but I love that about Ken because I'm a fellow Italian. You know what Italian Alzheimer's is, Sonnenfeld?

John Darsie: (33:21)
There you go. Perfect lead in.

Jeffrey Sonnenfeld: (33:22)
You never forget a slight, right?

Anthony Scaramucci: (33:24)
Yeah. You never forget the grudges.

Jeffrey Sonnenfeld: (33:26)
Got it.

Anthony Scaramucci: (33:27)
You can't remember what day it is, but you do remember the son of a bitch that tried to hurt you.

Jeffrey Sonnenfeld: (33:31)
Right.

Anthony Scaramucci: (33:32)
Go ahead, Darsie. Go ahead.

John Darsie: (33:33)
But you've written about the importance of not holding grudges, and especially as President-elect Biden comes into office during a time of deep divisions in the country, he's made it clear that he doesn't want to be involved in investigating his predecessor or preying on those divisions that might've been created in the previous administration. Why is it so important for an individual in a leadership position to set an example of not holding grudges, and how does it help organizations move forward effectively?

Jeffrey Sonnenfeld: (34:01)
I wish I could model it as much as I admire it in others. President-elect Biden is one such great example of that, and the selection of Kamala Harris where a lot of Biden's advisors thought that what was done to him was gratuitous in that... I think it was the January debate last year where she took him on in positions that were quite similar to positions she held and caught him by surprise. And he considered her a friend of the family and things, and he just seemed a little bit winded by that. People were angry about it. He got over it. He understood that hey, this is a contest here. People are using what they can use, and he understood why she did what she did. He admits it surprised him.

Jeffrey Sonnenfeld: (34:48)
A lot of the candidates talked about how afterwards if they did really well in a debate, he would congratulate them regardless of how well he did and talk about what they did that was so effective or what he learned from it at any age. That's really fantastic. I was at one event, since we're just among friends here, where Vice President Biden used a joke that didn't go over well. It was kind of a malapropism was in there. Can you imagine a gaff from President-elect Biden now?

John Darsie: (35:13)
No way.

Jeffrey Sonnenfeld: (35:14)
It wasn't perfect, and people were starting to snicker. Who immediately shut it down? It was Elaine Chao and Mitch McConnell said, "Cut that out. That isn't what he meant. You know what he meant." They said, "He's our friend." Mitch McConnell and Joe Biden know that they have that. When there was a stalemate in the Obama years, it wasn't taking it to Harry Reid or Chuck Schumer or through Mitch McConnell to work things out. It was Joe Biden or President Obama. Joe Biden would parachute in there in the sequester stalemates and things like that. He has a way of getting to people in a very natural basis. He's not a mud thrower.

Jeffrey Sonnenfeld: (35:52)
This frustrated some of us through the primaries because that's just not his nature. I don't know that he's quite Quaker like. He has some temper, but he restrains it. That dignity I think is a great model to not have the negativity guide us into the future. I think among many great qualities that I think we'll see in President-elect Biden's leadership style, it's going to be that forgiving, positive style to find out where there is common ground and move forward from there. He doesn't see compromise as a bad word, and we don't have to look across the aisle. We could look within the Democratic Party.

Jeffrey Sonnenfeld: (36:29)
I had a great political historian today, a guy named David Mayhew. In an earlier class today I wanted to talk about the divides in each party. And he said, "They're not so great. We're exaggerating it because the media would like to do that for drama, but in fact, to negotiate between the people who call themselves progressives, which are really democratic socialists, and the people who are classic progressives, which are the middle of the road people, is not a divide that's any greater than we had the Yellow Dog Democrats or the Dixiecrats or whatever else, that these parties have had complex coalitions always."

John Darsie: (37:08)
Focusing again on that using politics as a context to talk about an issue, I want to talk about transitions. It's another topic that you've written academic papers about, about the importance of smooth transitions and transfers of power within corporations. Obviously, we're in the midst of a sort of messy transfer of power right now from President Trump, who's still contesting the results of the election, to President-elect Biden.

John Darsie: (37:32)
Biden's transition team is having to circumvent the normal official processes for transitions, but people have warned on both sides of the aisle about the dangers to national security, especially in the middle of a pandemic, not sharing information about vaccines and Operation Warp Speed and that type of stuff. Using our current backdrop as context, how can organizations effectively manage executive transitions, and why is that so important for continuity within an organization?

Jeffrey Sonnenfeld: (38:01)
Well, there's a lesson here. Of course, it's a lesson of bad sportsmanship we see and to challenge the rules if they don't work out your way. That's a problem. I think as CEOs have rallied in distress. Thursday night of November 5th when President Trump overreached in a news hour broadcast at a press conference from the White House Briefing Room to suggest I hereby assert powers that he didn't have, that alarmed a number of CEOs, so we pulled together 30 of them. Between 7:00 p.m. that Thursday night and Friday morning, I got a group together of 30 Fortune 100 CEOs that were that worried, thinking we need to figure out how to confirm that this was an efficient, fair and safe election, as his own cybersecurity and election security experts have confirmed that there is no evidence of any fraud out there and to celebrate the winners, as they did immediately.

Jeffrey Sonnenfeld: (38:59)
They set the trail. As these CEOs called for the business associations to do that, the Business Roundtable did that, it seemed, within minutes of when Pennsylvania was declared the very next day. They came out with an excellent statement that was the virtual almost perhaps verbatim model that not only other trade associations used, but also heads of state around the world. You can actually take a look at it, and President Bush. It's almost the exact statement. That conferral of legitimacy was very important from an independent, nonpartisan bodies like that.

Jeffrey Sonnenfeld: (39:29)
I wrote a book about this in terms of the corporate model. Just happened to have this here too and an earlier book called The Hero's Farewell. That doesn't mean that every CEO, every head of state is not necessarily heroic in terms of noble things they do. But in their minds, they see themselves that there is one person in the world truly indispensable, and they know who that is. The monarchs have a real problem leaving office, whether or not it's Sumner Redstone or taking a look at Armand Hammer for anybody who remembers him from Occidental Petroleum or other examples where people, they don't tend to want to leave until there's a palace revolt or they die in office. It's a feet-first exit. That's to some extent what we have right now as a monarch.

Jeffrey Sonnenfeld: (40:09)
There's a different sort called generals, like I don't know, Steve Jobs or others. Howard Schultz did this of Starbucks. They leave and something happens that necessitates a triumphant return to power. As generals, they're often called out of mothballed retirement. A third group, ambassadors, have a wise, tranquil passing of the baton. That's what often the corporate world has looked for. Intel used to do this really well and others. In fact, we've seen this at IBM recently. We've seen it at Pepsi recently. We've seen it at a number of places, at Disney, a fantastic tech successor from within.

Jeffrey Sonnenfeld: (40:42)
The final group is a governor, somebody bound by a term of office, goes and does something else. But there are different types of transitions. The hardest one is the monarch. They tend to be big disruptors as a leader, and when they leave, it's quite disruptive.

John Darsie: (40:58)
We have a question. It may be apropos to the difficulty that monarchs or very powerful people have giving power away. There's a book called The Psychopath Test that contends that a large percentage of CEOs are somehow on a psychopath spectrum. Do you think that's an accurate assessment that people in positions of tremendous power develop certain cognitive disorders, if you will? And what other books do you recommend on understanding leadership?

Jeffrey Sonnenfeld: (41:27)
Well, there's this great book called The Hero's Farewell that just fell on my floor here somehow that I would argue picks up on that point very well. Since it's just us talking and there are no CEOs ever going to see this-

John Darsie: (41:41)
Of course. We're not accusing all members of your community of being psychopaths, of course.

Jeffrey Sonnenfeld: (41:47)
No. But here's what Freud said. Sigmund Freud said, "Society is changed by its discontents," people who are just not happy with the way the world is. Robert Motherwell, the great painter, used to talk about the anguish of creativity is that he talked about artists like himself who would sneak into a gallery at night to touch up a painting on the wall. The beauty of creativity is the act is never quite done. There's also a restlessness in them, so it doesn't make them always the easiest people to live with. But the world is different and hopefully better because of them. But they want to be seen in life as net producers and not net consumers, so they're always on the go. There's no halfway switch about them.

Jeffrey Sonnenfeld: (42:28)
We're lucky to have people that do that. They bring a lot to society that way, but it's a challenge to deal with creative geniuses and big builders. How do you deal with that drive to leave a lasting legacy, because they're not going to live forever. The great psychoanalyst, Otto Rank, talked about in Art and Artist, the book, on how artists and top mythic leaders are more like each other than they are other people in society. It's just because they're fueled by a dream of creation. And when somebody discards that dream, they're shattered. It's called a heroic mission, if you will. It's a quest for immortality.

Jeffrey Sonnenfeld: (43:02)
A separate dimension, though, that makes these leaders different is you can get fused with the job. I think that's some of what we're wrestling with with President Trump is when your name becomes hyphenated with a job, it's a heroic identity. Nobody ever called Alexander the III of Macedonia Alexander the Great until he made up this false lineage to Odysseus and Achilles. He and his mom made it up, but he started to believe it. That's some of what were seeing right now in the White House. You start to believe your own myth making. It gets hard to separate those identities. So the heroic identity and that heroic mission are two things that make leaders really different but really difficult. Anyhow, sorry you asked, aren't you?

John Darsie: (43:42)
No. It's a fantastic answer, and we obviously recommend your books, of course, which are tour de forces on leadership across a variety of different subject matters related to leadership. I want to ask you one more question from our audience, and it's about corporations in this era of heightened social and political justice type of initiatives have started wielding, it seems like, a little bit more power. You have someone like BlackRock, the largest asset manager in the world, that's focusing on ESG sustainability initiatives and starting to be a little bit more heavy handed in what they ask of companies that they're invested in.

John Darsie: (44:19)
You see corporate CEOs pulling out of advertising deals related to content that doesn't meet their standards. How has corporate activism evolved over the last, say, 100 years, 50 years? And how do you think it will continue to grow, and do you think it will continue to grow into the future?

Jeffrey Sonnenfeld: (44:36)
I love closing on that question. There's a circularity to it. 50 years ago the Business Roundtable was created to do that, but you wouldn't know that from recent discourse because it was a year ago, almost a year and two months ago, the Business Roundtable came out with a statement of redefining capitalism more broadly. But that was why they were founded is that Great Generation, as Tom Brokaw called them, the Great Generation. But these people were great builders, great diplomats, great corporate leaders, great scholars, whatever they did, great soldiers. The Second World War generation saw themselves with these sweeping duties, sweeping responsibilities. They were very important.

Jeffrey Sonnenfeld: (45:15)
The Cuyahoga River was on fire in Ohio 50 years ago. The Tennessee Valley of Drums, of discarded waste, toxic waste, was discovered. The Love Canal problem was happening right outside of Niagara Falls of Hooker Chemical Division of Occidental Petroleum. Irving Shapiro, the CEO of DuPont, one of the founders of Business Roundtable, said, "We can't fight this. We need to be a part of the solution." He helped create the Superfund cleanup.

Jeffrey Sonnenfeld: (45:43)
Tom Phillips of Raytheon said, "We're upset with our competitors in the aerospace and defense industry paying bribes to other countries." It was coming out at the time. "We need to even the playing field because we fight fairly, and we think you can be a defense company and not be a dirty company. There's a way to do it." They fought in favor of the Foreign Corrupt Practices Act, which is remarkable.

Jeffrey Sonnenfeld: (46:04)
The whole term corporate social responsibility, which predated ESG, was coined by Reginald Jones, Jack Welch's predecessor at GE. Affirmative action, IBM and AT&T, well, it was the diversity and inclusion concept at the time, more quota driven, but it was pioneered by those companies. Now, they weren't the norm. They broke away from then a more reactionary Business Roundtable and National Association of Manufacturers, but these were 200 companies that said, "We want to be progressive and what progressive really meant."

Jeffrey Sonnenfeld: (46:35)
In fact, the progressive movement always was a very centrist and positive movement. They were the ones who were trying to clean up workplace safety, trying to not have labor battles become violent in the workplace, trying to deal with immigration, with settlement houses and building roads and dams. That's who progressives were historically. That's who business leaders were, but we lost our way. I remember testifying before the SEC at the time of Sarbanes-Oxley that all these trade groups were taking such a hostile view toward needed reform. So they got legislation that was imperfect because they wouldn't help it.

Jeffrey Sonnenfeld: (47:07)
Similarly, it happened with Obamacare. Jeff Kindler, if he was here to defend himself, the CEO of Pfizer, found very little support from the business community to help him make better legislation. So he had to do what he could with what it was. They had become reactionary and obstructionist. They found their voice. Jamie Dimon made things a little bit better and Doug McMillon. It's just off the charts, great things at the Business Roundtable and Ken Frasier, Mary Barra, Alex Gorsky.

Jeffrey Sonnenfeld: (47:31)
You start to look through these CEOs, Bob Iger, whether or not they're members of these associations or not, Bob Iger and Ken Frasier, or not, is that they see that the role of a business leader is a pillar of public trust. Richard Edelman's great data shows that 92% of the public wants to see a business leader as a major source of trust engaged in social issues. Even Morning Consult's data similarly finds almost 80% of the general population says that they're much more proud of their employer if they do engage in these issues, but they have to pick and choose. They're not politicians. They can't get involved in every issue. But when something really matters, they've had a big impact. Sorry you asked that question, too. I happened to like it.

John Darsie: (48:13)
No. I'm very grateful I asked that question. It's a tremendous response. And Jeff, we're so grateful for your time. I like to tell people maybe they haven't heard of, "Whenever there's something important going on in the world, whenever people are trying to solve a big problem, we always bump into you." Jeff is always in the room where it happens, as Lin-Manuel Miranda wrote of Vice President Burr.

Jeffrey Sonnenfeld: (48:37)
It wasn't always my fault though. It wasn't always my fault when it happened.

John Darsie: (48:40)
No, it wasn't always your fault, but you're there to clean up the mess. You have bipartisan influence. You're not a partisan person. You call the shots like they are and people respect you for it. So it's a pleasure to have you on. We've talked about having you hopefully moderate some of these SALT Talks for us and grill some of your corporate members of the Yale CEO community. So we're very much looking forward to that. Anthony, you have any final words for Jeff before we let him go?

Anthony Scaramucci: (49:03)
No. Listen, I appreciate your friendship, Jeff, particularly after I got fired. And for those of you that need a resilience lesson, if you get fired from the White House, you're rolled in broken glass on Pennsylvania Avenue, then salted, and then put through the sewer pipe in The Shawshank Redemption and then lit up on late night comedy, call Jeff Sonnenfeld, okay. He'll cheer you up. That's my message.

Jeffrey Sonnenfeld: (49:28)
Oh. Well, thank you, Anthony. I think that you are an inspiring example of character, and that's what really matters regardless of what the situation is. As Thomas More said as an advisor to King Henry the VIII, "Character is as fragile as having a liquid cupped in your hands. Once you separate the fingers, it's forever gone." No matter what's going on in your life, you've never lost your character, and that's something really to admire.

Anthony Scaramucci: (49:50)
That's very sweet of you. Well, I look forward to seeing you non-virtually at some point, Jeff, and thank you. And we'll get you out to one of our live events, which I can't wait for.

Jeffrey Sonnenfeld: (50:01)
I look forward to it. Thank you.

Anthony Scaramucci: (50:01)
God bless you. Happy Thanksgiving. Well, I'll talk to you before Thanksgiving.

Jeffrey Sonnenfeld: (50:04)
Thanks. I'm honored. Thank you.

Peter Baker: “The Man Who Ran Washington” | SALT Talks #106

“The resentment towards Washington that fuels President Trump's rise is a resentment toward the establishment that Jim Baker was so much a part of.”

Peter Baker is the Chief White House Correspondent for the New York Times, political analyst for MSNBC, and author of Days of Fire and The Breach. Susan Glasser is a staff writer for the New Yorker and author of its weekly Letters from Trump's Washington, as well as a CNN global affairs analyst. Susan and Peter are married, and their first assignment as a married couple was as Moscow Bureau Chiefs for the Washington Post, after which they wrote Kremlin Rising.

Jim Baker sits relatively under-discussed considering the enormous influence he wielded from the end of Watergate to the end of the Cold War. Baker ran five different national presidential campaigns, served as Chief of Staff in both Ronald Reagan and George H.W. Bush’s White House, Treasury Secretary and ultimately Secretary of State from 1989 to 1992 during which time the Soviet Union collapsed. “Jim Baker as a subject turned out to be, I think, sort of oddly relevant to the moment… Donald Trump had yet to appear on the scene in terms of Washington politics at least… our interest was in a big subject about Washington and understanding ‘how had Washington become such a dysfunctional gridlocked place?’”

H.W. Bush urged Baker to get into politics and started Baker’s multi-decade political career that shaped Washington and how it’s operated in the decades that followed. One can trace the kind of deal-making politics, in which Baker played a major role creating, all the way to today’s climate that has seen a rejection of the status quo, exemplified by President Donald Trump’s ascendency.

LISTEN AND SUBSCRIBE

SPEAKER

David-Rubenstein.jpeg

Peter Baker

Chief White House Correspondent

The New York Times

MODERATOR

Anthony Scaramucci

Founder & Managing Partner

SkyBridge

EPISODE TRANSCRIPT

John Darsie: (00:08)
Hello everyone, and welcome back to SALT Talks. My name is John Darsie. I'm the Managing Director of SALT, which is a global thought leadership forum and networking platform at the intersection of finance, technology and public policy. SALT Talks are a digital interview series that we launched during the work from home period with leading investors, creators and thinkers. What we're trying to do during these talks is replicate the experience that we provide at our global conferences, the SALT Conference, which we host twice a year, once in the United States and once internationally, most recently in the UAE in 2019. What we're trying to do during these talks and at our conferences is provide a platform for subject matter experts, as well as to provide a platform for big ideas that we think are shaping the future.

John Darsie: (00:56)
We're very excited today to welcome Peter Baker and Susan Glasser to SALT Talks. Peter is the Chief White House Correspondent for the New York Times. He's a political analyst for MSNBC, and is the author of Days of Fire and The Breach. Susan Glasser is a staff writer for the New Yorker, and author of its weekly Letters from Trump's Washington, as well as a CNN global affairs analyst. Susan and Peter are married, and their first assignment as a married couple was as Moscow Bureau Chiefs for the Washington Post, after which they wrote Kremlin Rising. Peter and Susan today live in Washington, DC with their son. Just a reminder if you have any questions for Peter or Susan during today's SALT talk, you can enter them in the Q and A box at the bottom of your video screen on Zoom. Hosting today's talk is Anthony Scaramucci, the founder and Managing Partner of SkyBridge Capital, a global alternative investment firm. Anthony's also the chairman of SALT, and with that, I'll turn it over to Anthony for the interview.

Anthony Scaramucci: (01:53)
John, thank you. As I'm wont to do, holding up the book here. Congratulations, guys. It's a brilliant tour de force. A lot of post World War II history in this book, lots of discussion about how we got to where we are today, related to the Republican Party, so very highly recommended. I'd like to start with you, Susan. For those of us that are less familiar, I'm not, but a lot of people may be, with James Baker, who is he, what is his more signature accomplishments, and why did you guys choose to write a book about him right now?

Susan Glasser: (02:30)
Well, first of all thank you for having us in this nice, quiet period in our nation's politics. We can just sit back and talk history. You're right, that Jim Baker as a subject turned out to be, I think, sort of oddly relevant to the moment. That was not necessarily our intention when we began this seven years ago. Donald Trump had yet to appear on the scene in terms of Washington politics at least, but Jim Baker, I think already even then, our interest was in a big subject about Washington and understanding how had Washington become such a dysfunctional gridlocked place?

Susan Glasser: (03:08)
The period that Jim Baker helps us tell the story of our politics, really he was at the height of power from the end of Watergate to the end of the cold war. He has this incredible, unique portfolio where he is both a national political figure of extraordinary accomplishment. He actually ran five different national presidential campaigns, and he also rose to become a principal in his own right. That's Washington speak for big mocker who gets a seat at the table. He was not only Chief of Staff in Ronald Reagan's White House, and later in George H.W. Bush's, he's the only person ever to be Chief of Staff twice, but he also was Secretary of the Treasury when they negotiated and successfully made the 1986 Tax Reform Bill, and then he of course became Secretary of State at the end of the cold war, in this momentous period from 1989 to 1992.

Anthony Scaramucci: (04:08)
If he had a world view, Peter, what was his world view and what were his ideological goals, if there were any?

Peter Baker: (04:17)
It's a great question because we think of Baker, of course, as a pragmatist. Look, he was a Texas conservative, small C, but he didn't let ideology stand in the way of getting things done. I think that he had an ideology. His ideology was make things happen, get things done, move the ball down the field. If he had to compromise to do it, that was okay. That's why his story is so interesting today, because we don't see a lot of that in Washington today. Politics is so zero sum that if you're having a negotiation and you give anything away to the other side, somehow it means you sold out. Compromise is a dirty word. But for Baker, compromise was how you got things done. You could be a ruthless knife biter in election season, but when it was over, you sat down with the other side and you worked out deals on taxes, as Susan said, on social security, on the Contra war of the 1980s. He sat down with the Soviets, obviously, and the Germans and the Arabs and the Israelis. For Baker, while he was a conservative, I think the biggest ideology for him was what do you need to do to get things accomplished?

Anthony Scaramucci: (05:18)
You know, for me, when I was reading this book, it was reminiscent of Robert Moses' book, The Power Broker, which I think is ... Sorry, Robert Caro's book about Robert Moses, known as The Power Broker, because it was a tour de force on somebody that didn't have elected office but was really at the center of monumental decisions and policy. One of the things that struck me about James Baker is that he would recoil from speaking out against policy initiatives or decisions that didn't necessarily go the way he thought they should be, or they were more controversial. I'll give the biggest example. He called President Trump crazy in 2016, yet he went and voted for him. He also refused to break away from him in the 2020 election. What does this say to both of you about the allure of power of James Baker himself, but just what Washington's all about?

Susan Glasser: (06:13)
Well, you're right to point that out. That was an interesting counterpoint to our historical research for this book was also the rise of Trump is happening in real time and definitely Jim Baker saw this as a hostile takeover of the Republican party that he felt that he had given his life to building. In so many ways, he's the un-Trump, in terms of both a sense of personal integrity but also just in terms of ideologically. He's still a very committed internationalist who believed in alliances, a free trader, an enemy of deficits, and in favor of telling it like it is. That's the thing about a pragmatist. You have to have a reality-based view of the world if you're going to be a practitioner of realpolitik as opposed to a non reality-based view of the world.

Susan Glasser: (07:08)
Yet he wasn't able, as you said, to fully renounce Donald Trump. For us, I think that's why the book is a study of power and it's not a celebration of it. It's a way of understanding that for someone like Jim Baker, maintaining your access, that really there's no point in pissing on the outside that you really don't get anything done by simply being a critic. It wasn't just Donald Trump. That was his view of the Iraq war when his best friend's son, George W. Bush, was president. Jim Baker was absolutely against that war. He thought it was a terrible idea, but somehow managed to make his concerns and opposition known but without blowing up his bridges to George W. Bush. I think that's another example of how he thought Washington operated.

Anthony Scaramucci: (08:01)
Well, I guess the thing that struck me about the book, you started writing it during the Obama administration. Then the Trump administration starts to unfold on us. I'm wondering, maybe this is for you, Peter, how do you think Baker's style in politics, did it lead us to Trumpism?

Peter Baker: (08:21)
Yeah, that's a really interesting question because there are ... we talked a little about this before going on air. The resentment toward Washington that fuels President Trump's rise is a resentment toward the establishment that Jim Baker was so much a part of. Now, did he do something specifically to lead to Trumpism? No, he's anti Trump in so many different ways, but I think that there is this backlash toward the elites, a backlash toward a Washington that seemed very comfortable and entitled and part of a ruling class that didn't really understand what it was like to live in so much of the country. In that sense, Trump represented a rejection of not just the Democrats, but ultimately the Republicans of the previous era in that sense. I think that people might not have bought what they thought they were buying in voting for President Trump, but there's no question, I think, that a lot of people were motivated by a sense that Washington had gotten away from them.

Peter Baker: (09:19)
What they lost, though, what they didn't see, I think, is that Washington did actually work in a way that it hasn't in the last four years, and the paralysis of the last four years hasn't made anything better for a lot of people out there who resented what had come before. I think Baker is a fascinating figure in that sense of representing what you say, part of the rejection of Washington.

Anthony Scaramucci: (09:43)
I want to take you back to one of the more fascinating stories in the book. James Baker is the campaign manager, effectively, for George Herbert Walker Bush in 1980. Then win the Iowa caucus, but they go on to lose the nomination. Ronald Reagan ascends in New Hampshire and they get to the convention. Tell us about the selection of George Herbert Walker Bush as Vice President, and then the eventual selection by Ronald Reagan of James Baker to be his Chief of Staff. They were adversaries six, eight months prior to that.

Susan Glasser: (10:20)
Well, that's right. It is one of the most amazing chapters really, because of course, without that-

Anthony Scaramucci: (10:25)
Love that chapter, by the way. Just editorializing right here. Just a fascinating human story. Please, I'm sorry I didn't mean to interrupt.

Susan Glasser: (10:31)
Yeah, no, you're right. Absolutely, because Baker actually wouldn't have become Baker without that incredible period of time. He and George Herbert Walker Bush were best friends from the country club of tennis courts in Houston. Baker had gone into politics really at Bush's urging. He turned out to be great at it. He runs this 1980 campaign and he takes Bush from an asterisk in the polls, literally an asterisk, to be Reagan's main rival for the Republican nomination. But they're not going to beat Reagan, ultimately. Baker, here, I think shows this canniness that he later became known for. He understands that the goal at that point is not winning the nomination that they're not going to win, but in a way his campaign is on now to get Bush that vice presidential nomination.

Susan Glasser: (11:24)
There's a real dance they have to do later in the primaries where Bush is out there, he wants to win. Very competitive guy, just like Baker. He's running against Reagan. He uses the phrase voodoo economics, which was one of the most memorable attack lines on Ronald Reagan that there was. Baker's actually mad at him. He's worried that he's going too far in attacking Reagan, and that ultimately that might doom his chances. In the end actually it was Baker and not Bush, who really forced Bush to pull the plug on his primary campaign. Bush and his family weren't ready to do so. They were resentful of Baker for saying now's the time to get out if you still want to keep your hopes alive. They did it. Bruised feelings, and yet Baker ultimately was correct in many ways, you could say, because they had just left it open.

Susan Glasser: (12:14)
Amazingly, at the 1980 convention, the big talk was that somehow Reagan might actually pick Gerry Ford, the former president. That had the entire convention in an uproar, and it actually faltered at the very last minute on these negotiations. What would it be like to have a former president as the vice president? Who would really be in charge? Ford over-reached, essentially, by asking for too much stature, too much authority, and Reagan just couldn't go there. There was nobody left to call but George Bush, who didn't think he would get it, by the way, interestingly, when the call finally came.

Anthony Scaramucci: (12:52)
Yeah. It's an amazing story. I don't want to give up the intrigue in this story, but it's a human story. It's power politics. It's the practicality of the campaign, what they need to do to beat a sitting president, and as we all know, there's only been three sitting presidents that have lost re-election since World War II, Jimmy Carter being among them. Baker was best friends with George Herbert Walker Bush, but they had a very complicated relationship. What was that relationship? How would you define that connectivity between the two of them?

Peter Baker: (13:25)
Yeah. We interviewed President Bush before he passed away. Obviously we interviewed Jim Baker an awful lot for this book, and both of them used the phrase siblings to describe it, that they were like brothers. If you think about it, brothers of course sometimes fight. Sometimes they have a rivalry, sibling rivalry. They're competitive. They want to prove something to each other at times.

Anthony Scaramucci: (13:43)
I'm so mad at my brother for incidents that took place in 1971. I just want to make sure everybody knows that.

Peter Baker: (13:50)
Exactly, but you love him to death, right? He is your brother. He will always be your brother, and I think that was the case of Baker and Bush. They had moments of friction, like what Susan described when they were upset at Baker for pushing them in 1980 to drop out. In 1992, when Baker was reluctant to come back to the White House to help Bush's flagging campaign for re-election, there was some sourness there. When Bush picks Quayle to be his running mate, arguably without telling Baker, that's kind of an act of rebellion against Baker. Why do I always have to listen to him? I know what I'm doing. I'm the President. In fact, when Baker would get on Bush's nerves, what Bush would say to him is if you're so smart, how come you're not President? There was this kind of sibling push and pull.

Peter Baker: (14:32)
The thing that really tells you why this is such a profound friendship that supersedes all that is the last day of George Bush's life, and that was just two years ago. The person who comes to his house three times that day in Houston is Jim Baker, checking in on his friend. The last few moments of Bush's life, he's by his bedside, literally rubbing Bush's feet in the final moments of his life. That's a friendship that goes beyond politics. As Susan said, it preceded politics. Because they were tennis partners and friends, family pals, their families got together in Houston, they had a relationship unlike any President and a Secretary of State, I think, in American history. I think that gave Baker power, by the way, as Secretary of State, but it's also a very human story, as you say.

Anthony Scaramucci: (15:17)
Look, it's an amazing story. It makes you feel proud to be American when you think about the character of both of those men. Baker recognized something about Washington, that there was a perception to power as much as there was real power. You guys addressed it in the book. He also had a knack for playing the media a certain way. I was wondering if you guys could explain that as well.

Susan Glasser: (15:40)
Yeah, no. Image management was definitely one of his super powers. I'm sure as a fellow practitioner, I'm sure you can appreciate some of these skills which really transfer, even though the media world has fragmented into-

Anthony Scaramucci: (15:53)
I'm not that great at image management, Sue. What you see is what you get, okay? I don't have three sticks next to my last name. Go ahead. Keep going.

Susan Glasser: (16:03)
He was a natural at it, from a purely absolutely selfish journalist point of view. You've got to appreciate a man whose motto was never lie to the press. Now, he might spin them aggressively, and he certainly did so, but Baker's skill was actually in managing the press rather than being at war with them. He took that away from his very first assignment on the national stage in 1976 when he became literally in one year, amazing rise, he went from an obscure position at the Commerce Department to running Gerry Ford's campaign. At the convention in 1976, the last disputed convention, here he is, this novice in politics. He's up against Ronald Reagan. John Sears, the campaign manager for Reagan, basically was a BSer, and he was telling the reporters all sorts of inflated vote counts that turned out to not hold up, whereas Baker was much more cautious and earned this enormous credibility with the national press corps. He carried that lesson with him.

Susan Glasser: (17:05)
In the Reagan White House, famously back-biting, one of Baker's great skills that I think enabled him to consolidate power was not only his mastery of the bureaucratic politics of a White House controlling the paper flow to Ronald Reagan, but it also was ... he would have these Friday briefings with the reporters for Time Magazine and Newsweek, and that mattered still back then. They would do these reconstructions of the big dramatic events of the week, and somehow, of course, Baker, as their background source, would always be in the middle of the event as they were portrayed in this first draft of history.

Anthony Scaramucci: (17:43)
It's an interesting segue to this question, because I was thinking about this this morning. He was a ruthless fighter. He gave it his all during the campaigns, but then he reeled it back and became this pragmatic deal maker. I guess what I'm wondering, as we look at President-Elect Biden today, how do you think he's going to handle the progressive wing of his party? Is he going to be this pragmatist like a James Baker? Will he manage things similarly with his team? Where do you think things are going, and what would Vice-President-Elect Biden, excuse me, President-Elect Biden take from a book like this about James Baker to help him manage the government in its current state?

Peter Baker: (18:26)
We should send him a copy. I do think that Biden is instinctively like Baker in the sense that he wants to cut deals. He wants to work across the aisle. That is his natural instinct, and he's from that era, to some extent. He obviously is an institutionalist, I think, like Baker is. He believes in Washington, he believes in Congress, he believes in working together. Whether this environment allows or not, is a different question. This environment is obviously different than it was when Baker was at the height of his power. You're right, I think that Biden will come under enormous pressure from the left within his own party to be much more sweeping or ambitious than maybe his natural inclination would be, and certainly than the Republican-led Senate, if it stays in Republican hands, as it looks like it probably will, would allow him to be.

Peter Baker: (19:10)
I think Biden would like to be a Baker, I just don't know whether he either has the capacity at this particular moment, given the environment, to be, but I think he'll try. I think he'll try. He and Mitch McConnell do have a relationship together. I do think they may not believe on big, sweeping plans on climate change or health care, but I do think that they will avoid the kind of train wrecks we've seen in the last number of years on government shutdowns and debt ceiling crises. That kind of thing, I imagine that McConnell and Biden could probably work their way through.

Anthony Scaramucci: (19:40)
When you think about 2000 and the stress on the country as we were waiting for the results in Florida, and it has been reported, and you guys can tell me if it's true or not, that the White House reached out to James Baker related to the current electoral outcome. How is it different from today, and if that is true, why do you think somebody like James Baker did not accept the appointment that he accepted from the Bush's in 2000?

Susan Glasser: (20:09)
Well, it's interesting. We did speak with Secretary Baker the other day, and we asked him about this because it was reported that Jared Kushner, Trump's son-in-law, he was in search of not Baker himself, I should say, but a James Baker like figure. Actually Baker told us they did not reach out to him directly, but clearly he's much invoked, and the reason is pretty simple. Because he's perceived as somebody who would both have the enormous stature and credibility that was needed to reassure the country at a time like that disputed 2000 election, but also the knife fighter chops to figure out one way or another a legal strategy that would put them in the right. That was what was interesting about Baker the pragmatist back in 2000 in Florida.

Susan Glasser: (20:56)
Many Republican lawyers felt that, as a matter of principle, that they were believers in states' rights, that matters like state recounts belonged in state courts. Baker, essentially from day one, looked at the situation in Florida and he said we're going to federal court. He had a very my job here is to win perspective on that, and he thought that the Florida Supreme Court was all Democratic appointees and it didn't look good for them. He wasn't sure of the outcome in the Supreme Court, but he felt that that was a better course, and he essentially won the argument over those Republican lawyers, even on his own team who were not so sure about it.

Susan Glasser: (21:38)
Look, the bottom line is that was a really different situation than today. Number one, most important thing, as Baker said to us when we talked to him, we never said don't count the votes. What an absurd thing to say. You can't really make that argument in the United States. The votes had already been counted, and in fact there had already been the automatic recount in Florida. The question was what additional recounting should go on, what to do with questionable ballots with the hanging chads and everything. That was very different. Then the other thing, of course, is that you had two candidates in George W. Bush and Al Gore who both believed in the American system, and in fact their main concern for both of them was how do we get to an outcome that everyone can accept, and how do we make sure that we haven't undermined American democracy in this? Of course, we now have the exact opposite situation, where the President himself is the underminer.

Anthony Scaramucci: (22:33)
What do you think happens?

Peter Baker: (22:41)
Now?

Anthony Scaramucci: (22:41)
Yeah.

Peter Baker: (22:42)
Well, look, I think we're going to see still a potentially volatile 70 day period. The President is still president until January 20th. We've just seen today he's fired the Defense Secretary. There's very likely to be more firings, we think, in the days to come. That could lead to a period of uncertainty and instability. I don't think there's any chance, it doesn't seem like, of overturning the election, just to make everybody understand that. The challenges he's put in court, first of all, haven't gone anywhere. Judges haven't been all that open to him. Second of all, even if he won, there's no actual allegation of any specific fraud that would create so many votes that it would overturn his election. They're literally just flailing at this point by arguing about whether the observers should have been six feet away or 20 feet away, things that don't really change the outcome. I think that he just wants to create enough noise out there so that he can explain that he didn't actually lose. It was stolen from him, and on and on. Will he concede? I don't know. You obviously know him better than I do. I'd love your opinion. Will he actually leave gracefully on January 20th? It's a good question, but he will be, I think, not President at noon on January 20th, whatever he decides to do.

Anthony Scaramucci: (23:53)
Well, let me put it to you this way. Since Scaramucci's now an 11 day time period, he will have been President for 132.78 Scaramuccis, and unfortunately right now for the country, we have six and a half more Scaramuccis to go. I think the last six are going to be really tough on the country because the guy's basically a sore loser and a big time baby, so we'll have to see. Some people have told me, that are very close to him, he's going to take a powder in Mar-a-Lago in December not to be seen again in Washington. That is a real crybaby pants. That is just like in elementary school when some kid had the football and was taking the football and taking it home with him. I hope he doesn't do that, but everything he's going right now is providing more evidence to the American people about why people like myself who worked for him said, okay, you can't have this guy be President. He's just not fit to be in that job. I was a little surprised by James Baker, and I want to ask this one last question because when I've met Secretary Baker in the past, he always struck me as a guy that had this centered, principled nature to himself. Yes, pragmatist, but sensible, principled nature. Were you guys surprised at his support for the President here prior to the election?

Susan Glasser: (25:18)
You know, look, we struggled with this really for four years. In a way, eventually it was less surprising to us in the sense that we asked him the same question over and over again and he never gave a different answer. At a certain point, if somebody tells you who they are, you have to listen. For whatever reason, Jim Baker chose, at the age of 90, the identity of a partisan, choosing his party. When we asked him this multiple times this year, that's what he fell back on, is this idea that, well, there are some terrible possible consequences. The left is going to pull the country too far away. It didn't seem very convincing to us, but again, it was a conscious choice on his part, so that told me both about what his views of his power, and that right now we live in such a partisan moment that you basically have to pick an identity and stick with it.

Susan Glasser: (26:16)
The other thing is, look, we talk a lot about his accomplishments in the book as a statesman, as a negotiator, as Secretary of State dealing with the Soviets, but he was a very hard-edged political player and partisan. You look at the 1988 presidential campaign, and you can see a through line from that campaign to the scorched earth politics of today. Baker and Bush, they didn't govern like that kind of partisan because Washington was different then, but they ran a politics where they took Michael Dukakis, essentially a mild-mannered technocratic governor of Massachusetts, and they turned him into a flag-burning, pledge of allegiance hating, criminal coddling enemy of the state. They understood, in very crass terms, that that was actually the only way for George Bush to win when he was 17 points down coming out of the conventions. You can look at that aspect of Jim Baker's record too, the Willie Horton ads.

Anthony Scaramucci: (27:21)
Lee Atwater, James Baker.

Susan Glasser: (27:22)
That's right. He always had this duality to him, and I think that's what we explored in the book.

Anthony Scaramucci: (27:28)
Okay. Well, it's a fabulous tour de force. There's some great history in this book as well. I love the book. My last question before I turn it over to audience participation, is what did James Baker think of the book?

Susan Glasser: (27:44)
Well, he's still talking to us. That's good.

Peter Baker: (27:45)
He is talking to us. Look, he wrote two memoirs of his own, so he had a chance to say what he wanted to say about his own life. I think he cooperated with us the way he did because he realized if you're going to be a figure in history, somebody else has to write a biography about you. He had already written two of his own books. He gave us all the time in the world, he gave us complete access to his archives at Princeton and Rice University, we interviewed all eight of his children, his wife, his cousin, his nanny, who's 107 years old and still around, as well as all the poobahs, the presidents and vice-presidents and so forth. I think it was because he wanted somebody to tell his story who was independent and had credibility beyond his own circle. There are things in the book he doesn't like. His joke is I told them it could be warts and all and I wouldn't object to that. I didn't mean all the warts. That's the joke. But I think overall he thinks it's a fair and accurate presentation. He's told people that we've talked to that he learned things from the book that he didn't know because we interviewed so many other people, I think. If it's a revelation to him, maybe it could be a revelation to other readers too.

Anthony Scaramucci: (28:49)
Well, it's a great book. Thank you guys for writing it. I learned a tremendous amount from it, and I appreciate you joining us. We have our audience. We have pretty vigorous audience participation, so I'm going to turn it over to John Darsie.

Peter Baker: (29:02)
That's great.

Susan Glasser: (29:03)
Thank you so much.

Peter Baker: (29:04)
Thank you, Anthony, appreciate it.

Anthony Scaramucci: (29:05)
My pleasure.

John Darsie: (29:06)
Thank you guys again for your time. It's great to have you on, especially in this moment when everything you're writing about and talking about is so relevant. One thing that struck me in reading the book and in thinking about the Trump era is Trump is a wannabe dictator in a lot of ways, and he has some dictatorial instincts, but he's not particularly competent about Washington. He doesn't understand how things work. He wasn't able to navigate the political establishment, despite some world views that were potentially dangerous for the country. What do you think the example that Trump set within the Republican party about how to be successful, if we got a combination of James Baker and Donald Trump in the White House. Is that something that scares you, and how do you think that would play out if we get somebody who's more astute in terms of understanding how Washington works, that has these instincts that are more illiberal than any leader that we've had as a country?

Susan Glasser: (30:02)
Yeah. I think you're right, that that is one of the very scary scenarios that we just avoided here. Now, other people have asked us a version of this question, like could Jim Baker have made Donald Trump's White House work if he was White House Chief of Staff? My answer to that actually is a pretty unequivocal no, in the sense that someone like Jim Baker wouldn't have taken the job because you couldn't succeed at it, and that really nobody could have been an effective chief of staff, in my view, for Trump because you look at the history of him, both in office and also just him before that, as a businessman, it's clear that his personality, it's just impossible for somebody to have the independence and stature and authority to really do things in a professional way around Trump. That's just anathema to who he is in any job description.

Susan Glasser: (30:58)
That being said, look at history. A lot of the descriptions of ... not all, but many authoritarians or wannabe dictators, they have some similarities in terms of personality type to Trump. Many of them were described as buffoonish or not very successful in terms of organizing things. What's remarkable is that over time, people can learn to adapt. I do think that in a second term, had Trump managed to pull it out, he would have accomplished more and more of what his agenda was and the agenda of people around him. So I do think that was a very, very, very close call and that someone else could be successful with that kind of politics.

John Darsie: (31:49)
Our next question is about foreign policy. James Baker is known as a diplomat, both at home and abroad. He believed very firmly in the power of diplomacy. The Obama administration, in a lot of ways, developed a similar tack. They tried to engage in diplomacy even with some of the countries, like North Korea, like Iran, that others believed we should institute maximum pressure campaigns, which the Trump campaign then did in Iran. If James Baker was Secretary of State today, do you think he would follow the more Republican doctrine today of maximum pressure, more stand offish foreign policy, or do you think that it would look more like an Obama emphasize diplomacy type of presidency, Peter?

Peter Baker: (32:28)
That's a great question. I think it would be a mix in some ways. He would be strategic about the way he thought about it. It wouldn't be a one size fits all solution. There are instances in the world where he would have been in favor of maximum pressure. I suspect he thinks that negotiating with North Korea wouldn't be a fruitful prospect because they weren't going to come up with a deal that would be acceptable, and therefore maybe maximum pressure might make sense, economic sense. But he would be pushing to talk with Iran, for instance.

Peter Baker: (32:56)
In the late George W. Bush presidency, one of the things he did with the Iraq study group was really push both push and Condi Rice to re-open diplomatic avenues with Iran, with Syria, and to try working on the Israeli-Palestinian issue in a way that they were not, because he does believe in diplomacy. Now, I don't think the Iran deal that Obama came up with was actually good enough. He's criticized that, but he does like the idea of a deal, and he thinks had it been done better, that that would have been a better situation for the country than the confrontation that we're in right now.

John Darsie: (33:31)
We have a question that pertains to Russia, and I'm going to turn it into a two part question. The question specifically is that Putin claimed that during the break up of the Soviet Union, assurances were given to Putin and leadership there that NATO would not expand into the former Soviet Union, and he cites assurances that were given by diplomats that included James Baker. Is this true, and do you think the Bush team was the best to handle that era of foreign policy? What now do you think happens between the relationship with the United States and Russia, given that Russia, it's a bipartisan consensus at this point, that they helped Donald Trump get elected. How do you think they pivot their relations and their approach to dealing with the United States, Susan?

Susan Glasser: (34:15)
Yeah. Those are both really great questions. Just quickly on that Baker and his negotiations with Gorbachev. He did use, at one point, this phrase not one inch to the east language. I think the context has often been misrepresented. It's become one of Vladimir Putin's talking points. That's why you hear it a lot now. The context at the time was a question of what was going to happen to East Germany. They were talking about unification of Germany, and there were several hundred thousands Soviet troops in East Germany. They were going to be withdrawn, and the question was if the reunified Germany was going to join NATO, what would that mean in terms of this? Remember, at the time both the Soviet Union still existed, and the Warsaw pact still existed, so it was a very, very different conversation than the modern context in which its often sort of misquoted. Even then, Baker was straying from his official talking points, and it was seen as a mistake. He quickly backed away from that. He never repeated that again.

Susan Glasser: (35:22)
When they actually did sign the deal for German reunification, there was no such language evolved. This has been a little bit of a canard, right? Nobody was talking about NATO expansion beyond Germany at that point in time because, again, the Warsaw Pact still existed. What it tells you is the question of what kind of a victory did the U.S. win in the cold war? That's essentially what it's about, and Vladimir Putin has always held the idea that we imposed some kind of a harsh victor's peace on the Russians, and that he's trying to revise that. The truth is that NATO expansion came much later, in two rounds that began with Bush's successor, Bill Clinton. Interestingly, when we had a conversation recently with Secretary Baker about this, he said that he thought you could make the argument that maybe we had expanded NATO too much or had not really thought through what the implications of that were. That was actually a subsequent era's political fight that he and Bush did not shape the outcome of. That's number one.

Susan Glasser: (36:33)
Just quickly on Russia going forward, I would say this. You haven't heard Vladimir Putin congratulating President-Elect Joe Biden yet, even though most other world leaders, even those close to Trump, like Benjamin Netanyahu, have done so. There's a reason for that. Biden, when he was Vice-President and Chairman of the Senate Foreign Relations Committee, was always very skeptical of Putin and Russian power. In fact, he was kind of the designated envoy during the Obama years to people like Ukraine and Georgia, who were pushing back against revisionist Russian power in the region. I do think you're going to see a kind of renewed partnership with our European allies on the question of how to hold the line against the Russians, what can happen to challenge Putin's view. Putin, with Trump, has taken this triumphalist view that somehow the decadent West has actually been defeated and that his form of illiberalism has won.

John Darsie: (37:44)
Peter, I'll turn to you on this one. You wrote an article in the New York Times recently about the split within the Republican party about what do we do right now? How can we convince President Trump to concede, or do we throw our weight behind him with these frivolous lawsuits attempting to ... they don't even really seem like wholehearted attempts to overturn the results, but just to undermine the results and try to maintain some grip on power. Do you think there's any leadership in the Republican party or anyone close to Trump that is going to be able to intervene and cause him to concede the election, or do you think we're going to continue all the way through until January with Trump claiming that he's the rightful victor and we're going to have a sort of muddled transition of power in a way that we've never seen?

Peter Baker: (38:27)
Yeah. I'd go for muddled. Look, you've seen some leading Republican figures come out and congratulate President-Elect Biden, including former President George W. Bush, including Senator Mitt Romney and so forth, and you've seen some Republicans say to the President in effect, look, you don't seem to have anything there. Stop saying stuff like this, including Governor Christie, who has been an advisor of his over the years. Most of the Republican office holders these days are trying to straddle this uncomfortable line between saying more or less, well, if he has anything, he has every right to challenge anything he wants to challenge, take it to court, but they're not embracing the conspiracy theory. They're trying somewhere between acknowledging the result and crossing the President.

Peter Baker: (39:14)
I think that the President is just ... he has said over and over again, he does not like losing. For him, the idea of being tagged as a loser is unacceptable, and if there's anything he can do, even if he leaves office peacefully and on time, to avoid that tag by saying this is a stolen election, it's not a legitimate election, I think he's going to continue to do that. He said the 2016 election that elected him was crooked, and that he actually won the popular vote somehow.

John Darsie: (39:42)
He's had to recycle. He's recycling the narrative that he had ready to go when Hillary potentially was going to be the winner, and he's recycling it now in 2020.

Peter Baker: (39:50)
Exactly, and I think for him the danger, though, is looking more and more feckless as people just begin to tune him out and ignore him, which is maybe why he fires the Defense Secretary or does things like that to refocus attention on himself as everybody else is trying to turn back to Biden at this point.

John Darsie: (40:07)
Yeah. He's trying to look presidential, and the best way to do that is to show that you still have the power to fire people.

Peter Baker: (40:12)
Yeah.

John Darsie: (40:13)
I'm sure he's tossing and turning today as the news of the vaccine, positive early results of the vaccine get released a few days after the election, I'm sure that will be another point of conspiracy for him. We'll leave it right there. Peter and Susan, thank you so much for joining us. Anthony, do you have a final word for Peter and Susan before we let them go?

Anthony Scaramucci: (40:33)
No, listen, I thought it was a terrific book. I'm going to hold it up again. You guys know that I'm not that promotional, as you guys know about me. I'm going to hold it up again and say thank you very, very much. It's a phenomenal tour de force in literally the last 40 years in American politics, and I greatly enjoyed it. I think this is going to be something that people are going to be reading 10 or 15 years from now. This book has legacy the same way the Caro book, in my opinion, did about Robert Moses. God bless you guys. Best of luck with the book, and thank you for joining SALT Talks.

Susan Glasser: (41:07)
Thank you so much.

Peter Baker: (41:07)
Thank you, John. Thank you guys so much. It's a lot of fun. This is great.

Anthony Scaramucci: (41:11)
Okay. Wish you the best.

Susan Glasser: (41:13)
Thank you.

Peter Baker: (41:13)
Have a great day.

Governor Cuomo: Getting Control of the COVID-19 Pandemic | SALT Talks #99

“You know, the choice between the economy and public health was never a choice… You can't get the economy going until you solve the public health riddle.”

Andrew M. Cuomo is the 56th Governor of New York, having assumed office on January 1, 2011. Governor Cuomo is the Dean of the nation’s Democratic Governors, and currently serves as Chairman of the National Governors Association. Prior to his election as Governor, Cuomo served as the 64th Attorney General of New York. From 1997-2001, Cuomo served as the 11th United States Secretary of Housing and Urban Development under President Bill Clinton.

A deeply divided and polarized nation has presented unique challenges in getting control of the COVID-19 pandemic. Large swaths of the population will refuse to abide by guidance or direction simply because of their dislike and distrust of the political party delivering the message. These issues were exacerbated by President Trumps denial of the facts where he intentionally downplayed the seriousness of the virus. “It was just total government incompetence. It was a denial, in that the President now admits he lied about it… He was afraid that if they knew the truth it would hurt the economy.”

The Biden administration must put almost all of their focus into getting COVID under control and administering the vaccine coupled with stimulus aid to people and states. In the meantime, effective public messaging can allow economies to function while maintaining safe protocols to limit COVID spread.

LISTEN AND SUBSCRIBE

SPEAKER

Andrew M. Cuomo.jpg

Andrew Cuomo

56th Governor of the State of New York

MODERATOR

anthony_scaramucci.jpeg

Anthony Scaramucci

Founder & Managing Partner

SkyBridge

EPISODE TRANSCRIPT

John Darsie: (00:07)
Hello, everyone and welcome back to SALT Talks. My name is John Darsie. I'm the managing director of SALT, which is a global thought leadership Forum and networking platform at the intersection of finance, technology and public policy. SALT Talks are a digital interview series that we launched during this work from home period with leading investors, creators and thinkers.

John Darsie: (00:29)
And what we're really trying to do during these SALT Talks is replicate the experience that we provide in our global conference series, the SALT Conference, which we host bi-annually in the United States and across the world. And what we're trying to do with those conferences, is to provide our audience a window into the mind of subject matter experts, as well as provide a platform for what we think are big ideas that are shaping the future.

John Darsie: (00:52)
And today, we're very excited to welcome Governor Andrew Cuomo to SALT Talks. And we're very grateful for Governor Cuomo's time during a very interesting time taking place in the country. Governor Cuomo is the 56th Governor of the State of New York. As governor, he's fought for social, racial and economic justice for all New Yorkers. Under his leadership, New York passed marriage equality, a $15 minimum wage, the strongest paid family leave program in the country, the strongest gun safety laws in the country, equal rights for women, greater protections for immigrants, the largest investment in education in state history. He cut taxes for the middle class, he implemented a 2% property tax cap. He put more New Yorkers to work than ever before and became the first state in the nation to offer free college tuition for middle class families.

John Darsie: (01:41)
Now, growing up in Queens, Governor Cuomo learned the reality of the middle-class, working-class struggle. He graduated from Fordham University in the Bronx in 1979, and received his law degree from Albany Law School in 1982. After law school, Governor Cuomo headed the transition committee for then Governor-elect Mario Cuomo and served as an advisor to the governor while taking a salary of $1 per year.

John Darsie: (02:07)
At the age of 28 he founded the housing enterprise for the less privileged, a not for profit that set a national model for serving the homeless. And after the 1996 election, President Clinton appointed Governor Cuomo to serve as the Housing and Urban Development secretary. And in 2006, Governor Cuomo was elected New York State Attorney General. In November of 2018 Governor Cuomo was reelected as governor with the largest number of votes any governor has received in both the primary and the general election. Governor Cuomo is also the proud father of three girls, Mariah, Cala, and Michaela.

John Darsie: (02:43)
Just a reminder for you, if you have any questions during today's talk, you can enter them in the Q&A box at the bottom of your video screen. We're also going to turn it over to Anthony Scaramucci, who is the founder and managing partner of Skybridge Capital, a global alternative investment firm. Anthony is the chairman of SALT. And with that, I'll turn it over to Anthony for the interview.

Anthony Scaramucci: (03:03)
Hey, John. Thank you, Governor Cuomo. Thank you for joining SALT Talk. Before we get started, I just want to hold up your book, American Crisis: Leadership Lessons from the COVID-19 Pandemic. I read this book over the last weekend governor it's an exceptional read. I encourage people to read the book if they want to learn about COVID-19, the things that we didn't know in the beginning, the things that we've learned that also some of the things that you did here in New York to keep us safe, which my family and families around New York are very grateful to you.

Anthony Scaramucci: (03:34)
And so I just want to hold that book up and recommend it to everybody. Governor Cuomo, thank you for writing it. I want to dig into something that I think you would appreciate, because we're contemporaries in a lot of ways in terms of the way we grew up. You grew up in a middle-class family and Queens. My dad was a crane operator out here in Port Washington. You and I both know Ken Langone built a monument to those immigrants out here who mined sand in middle class Port Washington.

Anthony Scaramucci: (04:03)
And I was looking through my photos. There's a photo of you, me and your mom and dad from a few years ago and my wife Deirdre. And as I was looking at the photo is thinking of that older generation, Governor Cuomo. Tell us a little bit about that life experience. I remember the accordion, I remember the bocce balls. I remember the traditional Sunday meals, I remember getting smacked with a wooden spoon, tomato paste cans getting thrown at me, but not necessarily from my mother. It could have been from my aunt or somebody down the block. And my mother was like, "No problem. Hit him with the tomato paste can." And so I was just wondering if you could regale us a little bit with your upbringing, and how it had a big impact on you in your professional pursuits.

Governor Andrew Cuomo: (04:46)
Thank you, first, Anthony. It's good to be with you. I've been an admirer of yours for many, many years. I want to just give you a caution at the beginning of this. I'm not the other Cuomo who you talked to who loves those soft balls, that vague conceptual discussion. I'm a more rigorous substantive better athlete, better looking in general Cuomo.

Anthony Scaramucci: (05:15)
And by the way, Governor I don't have the Cuomo nose, so there's no way I could bring a swab like that on to set. Okay, look at this nose. Okay. Every Italian wants this nose Andrew. Go ahead, keep going, keep going.

Governor Andrew Cuomo: (05:28)
How nasty, my own brother, how nasty. Look, we are a product of the socialization, where we grow up. And my upbringing was like yours. Queens, middle class. My father doesn't become governor until I'm in my 20s. So he was just a middle class, working lawyer. The Italian tradition was much like, I think any immigrant tradition now. They were conservative, they had to work hard. It was about family. It was about discipline. It was about faith.

Governor Andrew Cuomo: (06:04)
They made sure the children knew the fundamental values. I worked every job there was, I had to pay my way through college, pay my way through law school. I was a tow truck driver, I was a landscaper, I was a security guard. You name it. I did it. Summers, you worked. We didn't get on a plane and go to Europe. There was no summer home. And I think that was very helpful, in retrospect, it was tough going through it. And the discipline was tough. But they were right. They were fundamentally right at the end of the day.

Governor Andrew Cuomo: (06:44)
It is about education. It is about respect, it is about law and order. It is about respecting police. They were right. And this country gave them a gift and they maximized the gift. And they loved the country for it. My grandfather, I was named for him, Andrea. I'm working now, you can appreciate this. My father's father was a small grocery store owner. And on the side, he did masonry and he would put ornaments in the front of the house. And he made this little stone castle with stones from Jones Beach, he would go along Jones Beach and pick the nice white stones, and he made this little cement castle about five feet high.

Governor Andrew Cuomo: (07:35)
And I have it now, it must be 100 years old and I'm rebuilding it with my daughters. No I'm not half the artists my grandfather was but just to give you a sense of that kind of transition and how we have to stay with it. So I'm very proud of it. Also Queens, Nassau, where you work. It was diverse. It was, you grew up with Jewish people, Irish people, Asian people. That was also very helpful. It broke down all of these stereotypes and differences. You went to school with different people you grew up with, you played with different people. So it took down the fear level of differences, which I think is so resonant in this nation now.

Anthony Scaramucci: (08:23)
Well, listen, we agree on that. And I've had my tussles with the president, this whole notion of low income housing not being in the suburbs. And Governor, I can tell you, those people that I grew up with, we were surrounded by low income housing. Many of those people went on to live the American dream, created great companies, great jobs. And we learn more in an environment like that our differences are really not differences. Once you see each other you see the commonality of each other.

Anthony Scaramucci: (08:51)
I want to go to the book for a second because I really enjoyed the book. It's a quick read, by the way, again, I'm going to encourage everybody to read it. But why did you feel compelled to write it at this moment, you had a lot on your plate, you gave some of the more masterful press conferences, which were really eye-opening to people and I think you've reduced anxiety. And you mentioned in the book, which I'm going to mention, everybody bringing down the fear, opening up the communication makes people more protected from the disease, but also gets them more comfortable so that they can expand back into their normal lifestyles. Tell us why you wrote it and tell us what people should learn from it.

Governor Andrew Cuomo: (09:30)
Yeah, I wrote it for two reasons, Anthony, first, because we still don't know what the heck we're doing with COVID. I mean, we're eight months into this. The numbers in many states are worse than ever. This is something that we should have been able to deal with. This is government incompetence, meets denial, meets division, national division.

Governor Andrew Cuomo: (10:02)
The government was incompetent. I mean, how can you be the United States of America, you can't find masks and gowns. And you can't make Q-tips which is the nasal swabs for the covid test. It was just total government incompetence. It was a denial, in that the President now admits he lied about it. He just decided to tell the American people everything was fine. Don't worry about it. He was afraid that if they knew the truth it would hurt the economy. It was totally implausible. It was a virus, you don't think they're going to figure out that there's a virus when they see people dying.

Governor Andrew Cuomo: (10:43)
But that was his strategy. He thinks he's a PR maven. And that he can sell anything. Yeah, but at one point, the truth catches up to you, and the truth caught up to him. And then it's a function of the division. Because we're so politicized, we're so polarized that we define ourselves by opposition. If you say "Wear a mask." "I'm not going to wear a mask, just because you said wear a mask." If you say, "It's a problem." "I'm going to say it's not a problem, just because you said it."

Governor Andrew Cuomo: (11:22)
I mean, look at where we are with this election, it's 50/50 a more polarized nation you've never seen. Polarized to our own demise. I mean, this is like a family fighting with themselves in the household. And half the family is going to oppose whatever the other half of the family says. I also wrote it because I wanted to make sure I didn't miss anything. I was going day to day with such a frenzy so little sleep. I wanted to rerun the tape to make sure I didn't miss anything.

Anthony Scaramucci: (12:03)
Makes sense.

Governor Andrew Cuomo: (12:03)
So it gave me an opportunity to go day by day.

Anthony Scaramucci: (12:08)
Well, we're at 230,000, unfortunately, confirmed deaths, there's over 9 million confirmed cases. New York, stable, although the infection rate is up in New York a little because it's deeply up in the rest of the country. But again, I want to thank you on behalf of New York for helping us get this thing under control, making us safer. But what do we do now? What do you recommend in the midst of this large surge of infection, governor, how can we get the virus under control?

Governor Andrew Cuomo: (12:39)
Yeah, let me make one quick point before. Just to make the point of the incompetence. cOVID-19 came out of the blue, baloney. We had SARS in 2002.

Anthony Scaramucci: (12:54)
Yeah, you mentioned that in the book.

Governor Andrew Cuomo: (12:56)
Dengue, Zika, MERS in 2012, SARS, MERS, and COVID. All coronaviruses, all came from China. All came from the wet markets in China, what they call zootropic viruses, came from an animal transfer to human beings. China lied about all three, the World Health Organization missed all three. We never solved any of them. We had plenty of warnings. We were just in denial and brother denial does not work, in government, in business and life. You normally see the problem before it comes and overtakes you. Right you see the wave building as you're standing on the beach. So we just totally blew it.

Governor Andrew Cuomo: (13:50)
It hit New York so hard, because the President was saying China virus, China virus, China virus, the virus had moved to Europe, and was in Europe for three months. And we're taking flights from Europe every day. And Italians and French and Spaniards and Brits were bringing COVID to New York and nobody told us. I mean, it was a if you wrote a movie people would say was implausible that the United States was that incompetent.

Governor Andrew Cuomo: (14:22)
Where we are now is yes, the infection rate is going up. New York State, remarkably, had the highest infection rate in the United States of America. We're now the third lowest, only Maine and Vermont have a lower infection rate. And Maine and Vermont, great states, great governors, but they don't have the density we have, they're more rural states. So it goes Maine, Vermont, New York in terms of infection rate.

Governor Andrew Cuomo: (14:50)
What we're doing is I test like a madman, because I want to know the data. I'm tired of the politics. I'm tired of the anecdotal. Give me the data. And we test about 120,000 tests a day, more than any statements. We test to such a level that I can tell you what neighborhood has an outbreak. It gets as tight as two miles in Port Washington has an outbreak.

Governor Andrew Cuomo: (15:22)
And then we focus on that micro area, we call them micro-clusters. And we lock down that area with restrictions, bars, restaurants, etc. But only in a two mile area. So you're not affecting the economy overall. But you are controlling the virus, we're controlling the virus better than any other state. But when you see a little flame, you're chasing... I feel like I'm looking at a field of dry grass. And embers are flying. And the only strategy is when you see an ember land and start to smoke, run over there and stamp it out. And then look at the other end of the field and stamp it out. So we're doing these very limited close downs in very limited areas. Otherwise, our economy is open.

Anthony Scaramucci: (16:22)
Well talk about that decision making. Because you've made a very good case for the logarithmic, rational decision making to create that intersection between clamping down the virus, stopping it, but not stagnating the economy. And also talk about the schools, if you don't mind. I have two young children in the public school system. And just let us into your thought process and how you interacted with health and public safety officials and making this stuff work for the state.

Governor Andrew Cuomo: (16:54)
You know, the choice between the economy and public health was never a choice. You would say, the President would say Republicans would say, let the private market decide. The private market is deciding. What the private market is saying, what consumers are saying is, "I don't feel comfortable going into a theater and sitting next to someone." If I said today, we have limited restriction on restaurants. If I said "100% of the restaurants are open, go ahead. Nobody would go." If I said "Broadway was open, go see a play today. Tickets are free." They would not fill the theater. You can't get the economy going until you solve the public health riddle.

Anthony Scaramucci: (17:48)
No question

Governor Andrew Cuomo: (17:48)
Because people get it. And the federal government made it a binary choice, it was never a binary choice. So ironically, to the extent New Yorkers feel more comfortable about the virus, and they know we have a low infection rate, and they know we are smart and aggressive on it, it has actually facilitated the opening of the economy. And what I do is we have so much data Anthony, I can tell you day to day, what the infection rate is doing where. And then rather than open close, if I have to I make a minor modification. I slow down in a very small area, which is frankly, from the state's point of view, it's such a small area, literally, we have like three neighborhoods now that we're slowing down. But the economy is open. There are some restrictions, but the restrictions are not what's stopping people. It's the consumer choice. People have decided what they're comfortable with. And that's what they're doing. And that's what they're going to continue to do.

Anthony Scaramucci: (19:06)
Makes sense governor and this a great part of your book, and so I want you to address it. You're in the fog of war, in the beginning parts you know hardly anything, you're open to that, then you're learning stuff. So now you're making this adaptation and pivot, which we all have to do as entrepreneurs, you have an entrepreneurial governing style. So therefore, if you had to look back governor and say, "Okay, this is what we got. This is what we got wrong. This is what we need to be thinking about, God forbid for the next pandemic." What would be some of those things as you're making the evaluation analysis, you more or less addressed it in the book, but I'd like you to expound on it a little bit.

Governor Andrew Cuomo: (19:46)
What we got wrong. The virus was coming here for three months and we never know. And I was listening to the federal government and that was a mistake. We were told the spread was only if people had symptoms, when they cough, when they sneeze, etc. Three months later, they say that was wrong, asymptomatic spread. That was a terrible mistake. Because then we weren't testing people who didn't show symptoms. And people who didn't show symptoms were showing up at work, showing up in nursing homes. That's how it came into nursing homes.

Governor Andrew Cuomo: (20:26)
Staff that didn't know they were sick, and they went into nursing homes. We were told that you could get it from a surface, surface transmission. So I disinfected all the subways and all the buses, never been done before, millions of dollars. Then we're told it's not surface transmission. What should we have learned? We have no health screening at our airports. They stop you if you bring in a bag of fruit, but you can walk in with a virus and there's no screening whatsoever.

Anthony Scaramucci: (21:05)
But they do have that screening at airports around the world. You and I have both seen that in different... Yes. Right.

Governor Andrew Cuomo: (21:10)
Yes. Only we don't have it. There is no ready test. We had no testing that we could have at the airport. We couldn't even make the tests. We couldn't make any of the medical equipment, we didn't have any stockpile. We didn't have any staff that we could deploy. We talk about Homeland Security, after 9/11. We put together this whole mechanism. Yeah, except you have no public health, national security.

Governor Andrew Cuomo: (21:41)
I'll tell you a great irony. When I'm in the president's cabinet under Clinton, they give the cabinet a briefing, God forbid you become president because there's a war and they send you down to the war room, one of the top terrorist threats, the supposed release of an airborne virus, which would create panic. The terrorist threat was they didn't even have an airborne virus. But it was so scary that if they could publicize the threat, you would create panic and chaos. And that itself would become destructive.

Anthony Scaramucci: (22:21)
Of course.

Governor Andrew Cuomo: (22:22)
We weren't even prepared for that.

Anthony Scaramucci: (22:27)
Governor. During the height of the crisis here, obviously, the crisis hasn't gone away. I'm not making light of where we are today. But it seemed like March and April, was sort of the apex for New York at least. And I hope it will be the permanent apex. And you had to work with the federal government, you had to interact with President Trump and you had to build a bipartisan understanding. And so talk a little bit about that, because we have tremendous partisan rancor in our country. And yet you were able to do things for New York with the federal government from the opposition party. How did you do it? How did you go about it? What are some of the recommendations you have for your fellow citizens in terms of dealing with that rancor?

Governor Andrew Cuomo: (23:12)
Yeah, first dealing with the President. You're right. We have great polarization in the nation. And that's one of the main problems, I think that we have, period. It's pervasive. I didn't have a bipartisan problem with the President. I had a Republican Senate for eight years. I got a lot done with the Republican Senate. I don't see it as politics. I see it as dealing with people. You're a Republican. If I had a backdrop, yours says salt, mine would say pepper. So we're not supposed to get along.

Anthony Scaramucci: (23:49)
No, no, sir. Yours actually couldn't say pepper because I own pepper. I thought somebody was going to do that to me. Gov. So I went out and bought thePepperConference.com. Just want to make sure you know that.

Governor Andrew Cuomo: (24:00)
Oh, because I was going to hold up my own...

Anthony Scaramucci: (24:06)
Which is good to know, I'm going to sue you for patent infringement. There you go.

Governor Andrew Cuomo: (24:09)
But, look, you and I are reasonable people. And we have issues that we differ on. But we have issues we can talk, we can communicate. The President, I had opposed on many of his policies since he became president. I knew him before that, by the way. He was a supporter of mine. He contributed to me, I knew his family, they contributed to me. He becomes president. He moves very far right, which he had to in the presidential. And then it's almost like he became an apostle of it.

Governor Andrew Cuomo: (24:47)
I had fought with him as governor, we get to COVID. I called him up. I said, "Look, forget all that. It's a new day. It's a new moment. We have to work together. This is an historic moment in this country. It's going to be your legacy. It's going to be my legacy. Let's do this together. We happen to have the worst problem in the country because of that ambush from Europe. And all those European flights are landing at JFK, etc." The problem was not politics. He is an impossible human being to deal with. And I'm in the business of dealing with human beings.

Anthony Scaramucci: (25:22)
I didn't know that Andrew, I only got a shot out of a cannon. And we've got a whole time limit, 11 days named after my last name, but that's fine. But I didn't know that. But go ahead, keep going.

Governor Andrew Cuomo: (25:33)
He really is impossible. Now, it's interesting, because the extreme personalities, and you know this from your business, are normally in some ways easier to deal with. A narcissist is almost the easiest to deal with. If you get yourself out of your head, and you're just trying to communicate with the other person, and you're seeing it through their way.

Governor Andrew Cuomo: (25:58)
So in some ways, he was easy, because he is a classic narcissist. And he needed to be applauded, he needed to get credit, he needed to be... You had to genuflect. "Oh, thank you, thank you, thank you. If it wasn't for the president." I did all that. But he is really unreasonable, almost to the point of a disorder. And at one point, he was in such denial of the virus, that we just were at loggerheads because I was saying, "We can't deny it, I have people dying. I can't keep praising you when you are in denial." And eventually it just didn't work.

Anthony Scaramucci: (26:50)
Well, and now he has his legacy. And it's an interesting situation that we're living with right now. There may be a Biden administration coming. And I'm sort of thinking that there's going to be, in fact, I would just tell everybody on this SALT Cast that at least the prediction markets have it at 92%. So let's for this sake of this question, you're a policy adviser to Vice President Biden, who's now the president elect, what would be some of the priorities that you would want to have in the first 100 days? What would you advise him?

Governor Andrew Cuomo: (27:26)
Do I get four?

Anthony Scaramucci: (27:28)
Yeah, anything you want?

Governor Andrew Cuomo: (27:29)
COVID, COVID, COVID, economic stimulus, we have to get COVID under control. We don't get COVID under control, we don't get that vaccine right, nothing else matters. You're not going to erase fear just because you say the economy's open, go back to work, it's not going to happen. We have to really deal with COVID. And we have to be smart. And we have to deal with it as a nation. This whole theory of 50 states handle it on their own. It's bizarre, this is a national pandemic.

Governor Andrew Cuomo: (28:08)
I've never heard of delegating it to 50 states, how do I deal with the virus, I have my virus under control. I have New Jersey up, Connecticut up, Massachusetts up, they're all coming into my state. It's like trying to control a virus in your home when people are walking in and out. So we have to get COVID right. And we have to get serious about it. And that's going to be a whole reboot of COVID. The vaccine has to be right. They have no [crosstalk 00:28:37]-

Anthony Scaramucci: (28:37)
Can I stop you one second governor? Do you believe what the Vice President said in one of the debates? He said, "I want to stop the virus, but not stop the economy." So do you believe that we could do that without having a work stoppage or a closure like was going on in the United Kingdom? Or do you think that has to come together for a period of time?

Governor Andrew Cuomo: (28:57)
If you're smart, you can do it. That's what we're doing in New York. It's the testing. And it's the data. How do you run your business, you run your business on data.

Anthony Scaramucci: (29:09)
Correct.

Governor Andrew Cuomo: (29:10)
I get 120,000 tests a day, I get a map of the state and where the 120,000 cases are. And I look at the clusters and I attack the clusters. But you have to have that data. To have that data, you have to have accepted the concept that COVID is an issue. Why am I doing more testing than any other state? Because many of these other states follow Trump's logic. Don't test because if you don't test you won't see the cases. What does that mean? On that theory don't arrest anyone and you have no crime rate?

Anthony Scaramucci: (29:55)
Well, because governor as we both know, they're using it as a political tool. They're suggesting... He said more than once last week, "Well, on November 4, you won't ever hear of COVID again." And he's suggesting to people "Don't wear the mask. And come to my super-spreader events because it's a hoax." Is more or less is how he said it.

Anthony Scaramucci: (30:13)
Now, he'll claim that he was attacking the media, but go look at his statements he more or less believes that. So I guess my question is how do you and you did some of this in your speech, you gave a very rousing, empathic speech at the DNC over the summer. How do you effectively engage the other half of the country that actually believes President Trump that it is a hoax? Or is that something to be taking seriously? How do you put those two together? Because you and I both know, if we don't do that, you're not going to be able to tamp it down properly.

Governor Andrew Cuomo: (30:45)
It's a relationship that has to be restored. And I'll tell you why I think Biden is the right guy. I don't believe Trump created the divisions. I don't. I don't think he's that impactful. I think he sensed the division. And then he played to the division because he's fundamentally a marketing guy.

Governor Andrew Cuomo: (31:09)
We know him from New York. He was never a businessman. He was never a builder. He's a marketer. He saw the anti-semitism, he saw the racism, he saw the fear of the immigrants. He saw the controversy around guns. He saw the controversy around abortion. And he divide and conquer, the oldest strategy, divide and conquer. He saw a crack, he put a wedge in that crack, and he hammered that crack, and he exploded the crack. And then he polarized the crack by saying black and white, COVID, no COVID, everything was binary.

Governor Andrew Cuomo: (31:55)
People get that at one point there are facts. 237,000 people are dead. That's a fact. People know people who died. That's a fact. I think Biden is going to be the turning point, to stop us from focusing on differences. And for stopping definition by opposition to focusing on the commonality. It's a virus, you had a virus, you know how to treat a virus, when your kid has a virus in your house you know what to do? The kid stays in the bed. You tell your other children don't go into that room. She stays in the bed until she's better. And don't let her get out of the bed too soon.

Governor Andrew Cuomo: (32:44)
I think there's a common sense to this, that Biden can communicate to people. It won't happen overnight. But there are things that he can do immediately, mandate that government tests. Because I hate to keep coming back to this, Anthony. But if you don't know, what in your portfolio is the low performing stocks, you don't know how to manage the portfolio. How can you manage a virus if you don't know where it is, which is right where we are in this country now.

Anthony Scaramucci: (33:20)
No listen, it makes sense. I want to shift gears [inaudible 00:33:23]. A few last questions, Governor. I want to shift gears to something I heard you say, and you address it a little bit in the book, but I've heard you say it in your press conferences. There's a difference between a peaceful protest and let's call it violent looting. I think that was actually your exact words. And I want you to tell us, the synthesis of your decision making about federal and local law enforcement, and how to make the majority of the citizens of New York, New York State, New York City feel safe when there's racial tension and there's flare ups like after what happened unfortunately, with the very tragic incident with George Floyd.

Governor Andrew Cuomo: (34:05)
Public safety is job one Anthony, public safety is job one. In your business integrity is job one. You can go up you can go down but it's integrity [crosstalk 00:34:17].

Anthony Scaramucci: (34:16)
We agree on that, 100%.

Governor Andrew Cuomo: (34:19)
In my job, it's public safety is job one. There is a difference between peaceful protest. This is America. God bless people do it to me every day. If there's not a crowd in front of my house arguing about something, then something's wrong. Peaceful protest is one thing. crime is crime. And crime, go back to the Italian, zero tolerance for crime. And you have people... It's actually interesting, you're can have a peaceful protest. You then have people come and like hijack that protest or use the protest to commit crimes.

Governor Andrew Cuomo: (35:03)
That's a crime, arrest them and treat them as the criminals that they are, period. And I think one of the things Trump did very well was make it sound like the Democrats don't respect law and order. Now you do have a nuance here. The George Floyd, Eric Garner, goes back to Rodney king. You do have unfairness towards African Americans in the criminal justice system. You do. And that George Floyd situation was horrendous and the other 30 situations were horrendous.

Governor Andrew Cuomo: (35:42)
They have to be addressed. They're offensive to every American. I don't care if you're black, if you're white, we don't kill people on the street with four cops. We don't do that. That has to be addressed. But you can address that without saying "I'm anti-law and order." You have a bad Catholic priest who abused as a child. It's terrible. It's disgusting. It has to be punished. Doesn't mean I turn my back on the Catholic Church. One bad cop, doesn't mean all cops are bad. So in this environment that nuance is hard to communicate.

Anthony Scaramucci: (36:28)
No, I accept that, Governor, the city has been under economic stress as a result of COVID-19. You and I, unfortunately, sir, are old enough now to see the oscillation of that city. We saw it in the 70s. We saw its resurgence, we saw it in the 90s back in resurgence. Tell us a little bit about the city that you and I love. Many people on this call love. What's your prediction for what happens to the city over the next three to five years?

Governor Andrew Cuomo: (36:59)
Well, it will come back, if we bring it back. We have gone through this before, by the way after 9/11. After 9/11, nobody would come back to New York City because it was going to be a terrorist target if you remember, we can never go back, [crosstalk 00:37:19].

Anthony Scaramucci: (37:18)
Battery Park, that whole area you were very discounted real estate. All those people did very well by being contrarians.

Governor Andrew Cuomo: (37:27)
Oh, yeah. There's part of that. But it's more than just COVID. First, you have to be honest, in your acknowledgement of the problem. It's COVID and the density of the city's scary. It's been this civil disobedience, it's homeless people on the streets. It's a sense that crime is out of control. It's all of that. And you have to address each one of those things.

Governor Andrew Cuomo: (37:59)
I think the main factor is COVID. But we have to purposefully address all of those issues, and show the city and the revitalization and the rebirth. We have an economic problem, not just in the shortfall for the city and the state. This period did something, you realized you can stay home and do Zoom meetings, where before they were just unacceptable. You realized that you can have employees not show up at the office, and not pay for all that commercial space and be just fine.

Governor Andrew Cuomo: (38:39)
So there's going to be an economic, lifestyle transformation that's going on here also. But New York City, I'm going to be part of a very aggressive resurgence, revitalization campaign. I just want to get through the announcement of the vaccine, which I think is going to be the light at the end of the tunnel. I think [crosstalk 00:39:05]-

Anthony Scaramucci: (39:04)
When do you think that comes Governor? If you have a guess.

Governor Andrew Cuomo: (39:08)
I think three four weeks.

Anthony Scaramucci: (39:10)
Okay.

Governor Andrew Cuomo: (39:11)
We're then going to need a vaccine distribution plan, which this administration again, since they don't know how to govern, they don't know how to manage. They have no way to distribute this vaccine right now. Just to give you an idea of what this vaccine requires. We did 120 million COVID tests over the past eight months nationwide. Okay, that's everybody doing everything they could. Everybody was pulling out all the strings. 120 million tests. We have to do 330 million vaccinations. And the current vaccines required to dosages, that's 660 million vaccinations. In eight months, you only get 120 million cover tests, which is just the Q tip. And as my brother pointed out, it's easy, on a nose like mine, because you couldn't miss it. You have a six inch span, anywhere you go you hit it.

Anthony Scaramucci: (40:13)
As long as it doesn't hit your brain you're okay.

Governor Andrew Cuomo: (40:15)
That's right. Now you have to tell people roll up your sleeve, I'm going to give you a vaccine. Some people don't trust it. A vaccine is scary. Some people are going to say hold it, "I don't want the first one. Let Anthony take the first one and then I'll call him up in a month and find out how he's doing." Pfizer comes out with the first, Moderna comes out with the second one, this one comes out with the third one. There'll be all sorts of talk about which is better, you should wait. So it's going to be a very massive government undertaking.

Anthony Scaramucci: (40:48)
All right, so I got two last questions for you. I got a fun question and then I'll end it on a more serious question. What is it with the Cuomo family and the cars? Your brother shows up at my house in this like Blue 68 Pontiac Convertible. I know you've got some fancy cars. I'm an Italian, came from Long Island, you know I'm in love with cars. What is it? Is it in the DNA? Is it part of ancestry free.com? Or is it how we grew up? What is the deal there?

Governor Andrew Cuomo: (41:17)
It is the middle-class, working family culture first of all, it was what you could do... You know you were not going to play golf with Dad, you're not flying off to Europe. So you had cars, were accessible. That was what young people did in the working class neighborhood. And it was machismo and who got the girl, the guy with the best car got the girl. Racing was competitive and machismo.

Anthony Scaramucci: (41:57)
All right, so what are you driving now, Andrew? I mean, I saw a picture of you in some really fancy vintage car. What is that car? Make all these people listening in feel a little jealous about the goddamn car, go ahead.

Governor Andrew Cuomo: (42:10)
All right, but we have to separate what my brother does versus what I do. He has a bastardized 68 Firebird. It is bastardized.

Anthony Scaramucci: (42:20)
Ladies and gentlemen. He's not here to defend himself. But go Keep going. Keep going, governor.

Governor Andrew Cuomo: (42:24)
This is a fact, this is a fact, I'm not a journalist. I speak facts. It is bastardized. It has a different engine than the car came with. It has a different suspension than the car came with. It's a different color. Plus, he committed the cardinal sin, which he had professionals restore it. He didn't do that engine. He didn't do that suspension. He paid someone else to do it, which totally violates the whole...

Anthony Scaramucci: (42:53)
That's an old school, cardinal sin violation. There's no question. My uncle Sal would flip out over something like that.

Governor Andrew Cuomo: (42:59)
Yes. If you have to pay someone else to do it you don't deserve it. If you don't know how to do it yourself you don't deserve it. I hate these guys who go buy a resto-mod. Look at me, I'm driving a 66 Corvette that I paid $100,000 but I can't change my own oil. Then buy a Volvo. I, 68 GTO, all stock, all restored by me.

Anthony Scaramucci: (43:28)
How many cylinders, 8 cylinders?

Governor Andrew Cuomo: (43:29)
Navy blue, 8 cylinders, 400 navy blue blacktop. I just finished the 1967 Corvette, numbers matching, same engine, same transmission. Perfect, restored perfectly, me. I have a 75 Corvette which I've had since college, I bought as a wreck. A total in college, restored that. And then I have a 1996 Bronco, which was the last year for the full size Bronco.

Anthony Scaramucci: (43:58)
Sure, I remember that car.

Governor Andrew Cuomo: (44:01)
Which I have also. But I do all the work. I do the engines, I do the transmissions, I do the rear ends, everything is me. As opposed to my brother with his bastardized blue. That blue didn't even come in 68. Text him, say, "You know what I'm thinking? I don't think that's a Pontiac color in 68." Because it's not.

Anthony Scaramucci: (44:26)
You've already got... You already took my spot on his television show. I'm not sure if I want to text them that. Okay, I got one more question for you, which everybody's dying to know. You are a rising star in the Democratic Party. In May of 2019 you told the hill that you're seeking a fourth term for governor. Your pops once said, "I have no plans and no plans to make plans." What our Governor Andrew Cuomo's plans.

Governor Andrew Cuomo: (44:54)
My plan is to do what I said that the people. We have known each other a long time. And it goes back to where we started. You're nothing but your word. And you're nothing but your handshake. I said to the people of this state during COVID, when there was a lot of speculation I was going to run for president, I was going to run for vice president and I'm going to do this, I'm going to do this. If I let that percolate Anthony, then I would just be another politician. And they wouldn't trust me. You're just another politician looking to better themselves, you have an agenda.

Governor Andrew Cuomo: (45:27)
I said, "I have no plan. I'm going to stay here. I'm going to see us through this challenge." And that is going to be two years, three years, you're right, to bring this state back and this city back. And that's what I'm going to do. Period. That was my word, that's the job they gave me. Govern the state, get us through COVID. And then the second chapter is going to be the rebuilding.

Governor Andrew Cuomo: (45:58)
I'm friends with Joe Biden. I know all those people. I was in the cabinet. I have no desire to go back. But I do want to be helpful to him. I want to make one point to you, to bring us back to the conversation we had 20 years ago. The choice, talk about binary choices, health or the economy. The Republican, Democrat choice is not a socially moderate or socially progressive version versus economically irresponsible.

Governor Andrew Cuomo: (46:36)
I'm a Democrat. I'm so socially progressive, don't discriminate against LGBTQ. That's marriage equality. I felt discrimination as an Italian. Don't discriminate against black people, or Jewish people, or Muslim people. That's socially progressive, I respect a woman's right to choose. My economic record? More responsible than any Republican governor in history.

Governor Andrew Cuomo: (47:07)
Today, 10 years of being governor, your tax rate is lower today than it was 10 years ago. Your tax rate, every tax rate in this state, lower today than the day I took office. Lowest level of economic, government expansion in history. I have a self imposed 2% cap, I will not increase government spending more than 2% year to year. I won't allow property taxes to go up more than 2% year to year. More fiscally responsible than any Republican in the history of the state of New York. How can you be both? Because you can. You don't have to choose. You can be socially progressive, don't discriminate, respect women, and be economically responsible and manage, and understand it's about a strong business sector. And I've done both, which is what I told you I would do 20 years ago.

Anthony Scaramucci: (48:19)
And I love it, because 20 years ago, we did have the conversation. Because when people say they're fiscally liberal, you got half the country hating the word liberal. And when they say that they're fiscally conservative, they have half the country hating the word conservative. And so your choice of words are masterful because what you're trying to do, and you've done a great job in the state of doing it is intersecting and fusing people together where they can find common ground together.

Anthony Scaramucci: (48:44)
And so with that, I applaud you, Governor Cuomo, I want to tell you, a personal thanks for me. On behalf of the Skybridge staff and the SALT staff for joining us on SALT. The book is great, An American Crisis: Leadership Lessons from the COVID-19 Pandemic. If you need a nose job, though, sir, just look at this thing. If you need one, just let me know. Because I could make a really good referral for you. But if you don't need one, that's fine, too. You look fine on the cover of the book. I just wanted you to know that.

Governor Andrew Cuomo: (49:15)
I mean, look, do I have a rough hewn look? Yes. I think it plays into my persona and my character, being the real deal. I am no pretty boy, Anthony. I leave that to you and Christopher, you want the real deal? See me.

Anthony Scaramucci: (49:36)
I'll take it. I'll take it. You can have that look. Okay, I'll take mine. Okay. God bless you, Governor. I'm sending you a lot of love from the bottom of my heart. And thank you so much for being with us today on the SALT conversation. I'm going to turn it back over to John Darsie. He's going to say goodbye to some people.

Governor Andrew Cuomo: (49:50)
Can I say one word?

Anthony Scaramucci: (49:52)
Of course.

Governor Andrew Cuomo: (49:53)
I just want to say I've known you for 20 years. I admire what you've accomplished, what you've achieved, and more, I admire how you've done it. I admire your character and your quality. God bless you.

Anthony Scaramucci: (50:10)
Well, I appreciate it. It means a lot to me. And you know that, I keep mixing between Andrew and Governor because of our closeness. I don't mean any disrespect by that. But Governor Cuomo, thank you so much.

Governor Andrew Cuomo: (50:20)
Thank you.

Anthony Scaramucci: (50:21)
Appreciate it.

John Darsie: (50:22)
Governor Cuomo. We're very grateful for his time and for him joining us on SALT Talks today. A guy, no plastic surgery, no hair dye, fixes his own cars. That's the kind of guy we like to have here on SALT Talk.

Anthony Scaramucci: (50:33)
No Botox, no Botox. You can mention that too.

John Darsie: (50:36)
I didn't say it. I didn't say it. The hair dye I wasn't directing that towards anyone specific, but that's our kind of guy here.

Anthony Scaramcucci on the 2020 Election | SALT Talks #97

“I think what you have to do in life is you have to enjoy the journey and you have to handle the ups and downs like a gentleman or a gentlewoman, and not let it overly distract you from the long-term gains, or the long-term goals.”

Anthony Scaramucci is the Founder and Co-Managing Partner of SkyBridge Capital. He also the founder and chairman of SALT Conference, a leading global conference that brings together leading investors, creators and thinkers to discuss big ideas in the world of finance, technology and public policy. He is the author of four books: The Little Book of Hedge Funds, Goodbye Gordon Gekko, Hopping Over the Rabbit Hole (a 2016 Wall Street Journal best seller), and Trump: The Blue-Collar President.

Growing up in the blue-collar town of Port Washington on Long Island offered Scaramucci the chance to hone his business skills that set the stage for rest of his adult life. Selling Newsday magazine subscriptions around age 12 to help with his family’s bills served as formative experience. “There was a seminal moment for me, and I believe this happens to everybody, you figure out somewhere between 11 and 17 what you're doing for your life… For me, I love sales.”

All of Scaramucci’s success has been built on the back of a long history of failures and setbacks. He credits his resiliency to the solace he takes knowing he’s just as happy living modestly as he did as a child. Those lessons were called upon most publicly in the days following his firing after an 11-day tenure as White House Communications Director in the Trump administration, creating a new unit of measure: 11 days = 1 Scaramucci.

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SPEAKER

anthony_scaramucci.jpeg

Anthony Scaramucci

Founder & Managing Partner

SkyBridge

 

EPISODE TRANSCRIPT

John Darsie: (00:07)
Hello, everyone, and welcome back to SALT Talks. My name is John Darsie. I'm the managing director of SALT, which is a global thought leadership forum and networking platform at the intersection of finance, technology, and public policy. SALT Talks are a digital interview series that we launched during this work-from-home period, with leading investors, creators, and thinkers.

John Darsie: (00:29)
And what we're trying to do on these SALT Talks is replicate the experience that we provide at our global conferences, the SALT Conference, which we host twice a year in a normal environment, traditionally in Las Vegas, and then most recently in Abu Dhabi, and we're looking forward to getting those conferences back up and running as soon as it's safe for our constituents, but look forward to doing some virtual events later this year and early next year as well.

John Darsie: (00:52)
So, with SALT Talks, what we're doing, the same thing we're trying to do at our conferences, is to provide a window into the mind of subject matter experts, as well as provide a platform for what we think are big ideas that are shaping the future. And today's guest is one that we've been working really hard to get for a long time. We're very excited about having him on SALT Talks. His name is Anthony Scaramucci. Mr. Scaramucci is the founder and managing partner of SkyBridge Capital, which is a global alternative investment firm. He's also the founder and the chairman of SALT, and I'll spare you more biographical information about SALT, because if you're here, you probably already know.

John Darsie: (01:28)
Prior to founding SkyBridge in 2005, Anthony co-founded the investment partnership Oscar Capital, which he sold to Neuberger Berman in 2001. Prior to starting Oscar Capital, he was a vice president in the private wealth management division at Goldman Sachs. In 2016, Anthony was ranked number 85 on Worth Magazine's Power 100, which is a list of the hundred most powerful people in global finance. In 2011, he received Ernst & Young's Entrepreneur of the Year award in New York, in the financial services category. He's a member of several high profile organizations, including the Council on Foreign Relations. He's the vice chair of the Kennedy Center Corporate Fund Board. He's a board member of both the Brain Tumor Foundation and the Business Executives for National Security. He's a trustee of the United States Olympic and Paralympic Foundations.

John Darsie: (02:18)
He's the author of four books. The Little Book of Hedge Funds was his first book, followed by Goodbye Gordon Gekko, Hopping Over the Rabbit Hole, and then most recently, Trump, the Blue-Collar President, which obviously came prior to a little bit of an about-face that he did on the president as we head into Election Day tomorrow. In November of 2016, speaking of President Trump, Anthony was, after serving on the Trump campaign, he was chosen to the president-elect's 16-person executive committee on his transition team. So, when people talk about how he was there for 11 days, so he knows nothing about the president or the administration, I sort of laugh, because they're discounting the fact that he was on the campaign for nine months, and also played an integral role in the transition team as well.

John Darsie: (03:03)
Anthony is a native of Long Island, which is where I'm standing today, and where he's sitting today as well. He holds a Bachelor of Arts degree in economics from Tufts University in Boston, and a JD from Harvard Law School. A reminder if you have any questions for Anthony during today's SALT Talk, you can enter them in the Q&A box at the bottom of your video screen. And usually I'll turn the interview over to Anthony, who acts as the moderator, but today, I'm the moderator, and Anthony is the one who's going to be roasted, so I'm looking forward to this.

John Darsie: (03:31)
And just like we do with all of our guests, Anthony, I want you... I read a little bit about your biographical information, but for people who maybe don't know you as well and haven't read your Wikipedia page, or they have and they're looking for a little bit more insight into how you grew up and how you became the Anthony Scaramucci that we know today, please tell people about your upbringing, your professional background, and how you got to where you are today with SkyBridge.

Anthony Scaramucci: (03:54)
So, let me just... I've got something in my eye right here. Let me just get this out of my eye and then we can begin the interview. Hold on a second. Okay. I think I got it out of my eye.

John Darsie: (04:05)
The roast hasn't even started yet. I'm taking it easy on you so far.

Anthony Scaramucci: (04:07)
So, it's interesting. So, John's wife... I think this is an important part of the story. So, John's wife's uncle was one of my best friends in high school. He stole my high school girlfriend, but that happens in high school, big deal. But we stayed friends, it's 40 years later. But John's older sister, who happens to be Sammy's mom... This would be Samantha Darsie, John's wife.

John Darsie: (04:33)
My mother-in-law.

Anthony Scaramucci: (04:34)
Yeah. She basically said to me that I was a townie in Port Washington. Okay? So, these guys obviously grew up on a manor somewhere, but I was obviously a townie. And so, when I thought about that, I was like, she's 100% right. I was a total townie. I grew up in a blue collar neighborhood. You could drive by that neighborhood today, it's all blue collar people and blue collar houses. My mother won't leave the neighborhood no matter what, so God bless her. And the place where my dad worked is now a golf course, but it was a huge sand mine, and he worked there for 42 years. And what's interesting is [inaudible 00:05:08] actually... I helped him with it, but he really put up all the money. He built a monument of all those immigrants, Irish and Italian and Welsh immigrants that built that mine.

Anthony Scaramucci: (05:19)
But it was a great town to grow up in because it was a good mix of wealthy people, middle class people, lower middle class people, low income housing, the sort of low income housing that Donald Trump says he doesn't want to put in suburbs, which is actually valuable to the suburbs for so many given reasons. And so, there we all were. It was a great public school education. But there was a seminal moment for me, and I believe this happens to everybody, you figure out somewhere between 11 and 17 what you're doing for your life. And so, I have a son who's 28, just graduated from Stanford Business School, he wanted to get into technology and biotech and the future, and so he went out to Silicon Valley. Now lives in Venice Beach, California, is building a telemedicine company. My 21-year-old son is like, "Dad, I love music and videography." He's working in the music industry. For me, I love sales.

Anthony Scaramucci: (06:11)
And so, when I was 13... I was probably a little younger than that. When I was 11, my dad got his hours cut back, and there was some economic anxiety now, so I went out and got myself a Newsday paper route. So, if you're riding along Long Island, I was delivering newspapers. And then I convinced Mr. [Fusco 00:06:28], may his soul rest in piece, to give me like 50 free papers on Wednesdays. And so, John would know where this is because he lives out here. There's this place called the Dolphin-Green Apartments. It's on Main Street in Port Washington. And at that time, it was just really Irish and Italian ladies, and they all knew my mom. My mom was like Siri before there was a Siri. If you wanted to know who was having an affair in Port Washington, call Maria Scaramucci, she could tell you. She had everybody's feet... She probably knew people's fingerprints, even.

Anthony Scaramucci: (06:55)
So, I would go into that apartment building with the free newspapers. I would knock on doors, hand out free newspapers, and then I would hit these Italian and Irish women up for subscriptions to Newsday. And so, I built a fairly large Newsday practice, and I gave the bulk of that money to my parents, and I kept some savings for me, and that's how my whole business career started. And I was like, "Someday, I'm going to have my own business. I'm going to make sure that I get myself educated." It's probably too long-winded, but I'm trying to run the clock out here on John Darsie. But go ahead, John. Keep going.

John Darsie: (07:26)
You're trying to avoid the hard questions.

Anthony Scaramucci: (07:28)
No, keep going.

John Darsie: (07:30)
I think it's helpful, and I think going later into your life, I think when people ask me to describe-

Anthony Scaramucci: (07:33)
But the fact that your mother-in-law called me a townie, I still... It's not like I forgot it or anything like that. I just want to make sure that you know that I'm still talking about it 35 years later.

John Darsie: (07:42)
Well, she's not wrong, but we'll move on from that. When people ask me to describe you in one word, a lot of times the word I use is resilience, and you've over the course of your life been able to train yourself to be resilient in a lot of different scenarios, and your path to success hasn't been a straight line. You describe yourself as being a middling student in high school. You got to Tufts and the academic light bulb went off. You obviously have enjoyed a lot of academic success, including going to Harvard Law School. You were fired from Goldman Sachs in the investment banking department before you went on into the private wealth management division. SkyBridge almost failed in 2008 before you pivoted and grew the business to what is now the largest RIC structured fund-to-funds in the country. And you were fired from the White House after 11 days, let me remind you about that.

Anthony Scaramucci: (08:31)
I failed the bar, too. You forgot the bar exam. I failed the bar exam.

John Darsie: (08:33)
You failed the bar twice. I forgot about that. The list is too long.

Anthony Scaramucci: (08:35)
I took the bar twice, yep.

John Darsie: (08:36)
We would run out the SALT Talk if we listed all of your failures and setbacks, but you've been able to bounce back and achieve success on the heels of all of those temporary setbacks.

Anthony Scaramucci: (08:46)
It's really hard to believe I actually elected to do this with you. I'm going to come right through the window there.

John Darsie: (08:52)
If you were talking to an entrepreneur, how do you train yourself to be resilient, and what are other key lessons you've learned in business amid those failures or temporary setbacks?

Anthony Scaramucci: (09:02)
Well, here's the thing. When you grow up the way I grew up, for whatever reason, you're starting from scratch, so you're like, "If I got to go back to scratch, big deal." I always tell my kids, if I have to live in a one-bedroom apartment with a white tee shirt, it won't be a wife beater, I'm not that politically incorrect, it'll be just a regular Fruit of the Loom tee shirt, I could have a six-pack of Schlitz and a rabbit ear television to watch the Met games, I'm fine. And so, I think what you have to do in life is you have to enjoy the journey and you have to handle the ups and downs like a gentleman or a gentlewoman, and not let it overly distract you from the long-term gains, or the long-term goals.

Anthony Scaramucci: (09:42)
And so, I got fired from my first job for probably the right reasons. I sucked at that job. I would like to tell you I was good at the job. I actually sucked at it. And so, what happened was, I wanted the cool job coming out of school, and the cool job at that time was Goldman Sachs, and it was Goldman Sachs Real Estate, Investment Banking. That's 31 years ago. So, I hustled for that job. I got the job, but the problem was I wasn't prepared for the job, and it really didn't fit my skillset or my personality. So, 18 months into the job, the Gulf War started, and we were in a recession, and the firm decided to start laying people off.

Anthony Scaramucci: (10:17)
And a guy by the name of Mike Fascitelli, who went on to become the CEO of Vornado Realty, was my boss. He called me to his apartment on [Jane 00:10:25] Street. It was Friday night, February 1st. Not like I forget anything. It was Friday night, February 1st, 1991. I was 27 years old. He said I was fired. I was like, oh my God, because I had a lot of school debt, and I didn't really know if I was going to actually be able to figure everything out. He handed me an $11,000 severance check, John, and I was really bummed out. And then by that morning, I got up, I went for a run, and I was like, "All right, that job sucked. I wasn't good at it anyway. Let me see if I can go find myself another job. There's got to be another job out there."

Anthony Scaramucci: (10:58)
We were in a recession, so that was creating some anxiety. And then I didn't have a cellphone back then. It was 31 years ago. So, I was pumping quarters into payphones at Grand Central. And then one of my buddies said, "Well, there's jobs open at Goldman in the sales area, in institutional sales." And so, then I called Mike. And this is a lesson for young people who are listening. Don't burn bridges. I called Mike, and I said, "Hey, I got an opportunity upstairs on the 28th floor. Could you help me out?" And he did. And so, Mike and I are still very close to this day.

Anthony Scaramucci: (11:33)
It's the same thing when I got fired from the White House. When John Kelly fired me from the White House, first of all, I did something completely stupid, regrettable, but did it, and so I'm totally accountable for it. So, another learning lesson for young people. Don't go like this and try to blame other people. I admit to something stupid. I trusted somebody. The great irony is the reporter, his family was a 50-year friend of my dad. His father had worked with my dad on Long Island Construction, and so I did the stupid thing, I was transposing that relationship onto my relationship with the guy's son, and that was very, very stupid of me.

Anthony Scaramucci: (12:07)
And so, he wrote this salacious article. It wasn't even exactly what I said, but then when they finally played the recording, you realize it wasn't that nuts. It was just me being my typical antical self. I said some funny stuff about Steve Bannon. And by the way, everything I said about Steve Bannon was more or less true. The guy's a total whack job, so we can talk about that if you want. But, I'm fired, and so General Kelly and I got off on the wrong foot, but look at us now. We've had him on the SALT Talk, we've had him in Abu Dhabi with us, we had him in Las Vegas. I talked to him last weekend. We have a terrific relationship. I'm going with General Kelly to Iowa in January where we're going to be speaking together, and I had him at the Biltmore Hotel in January of this past year, so him and I are on a speaking tour together, and it's been a lot of fun.

Anthony Scaramucci: (12:54)
And so, what do you do? You've got to make lemonade out of lemons, man. You don't sit there and cry about it. I just want you to imagine... and my son, my oldest son, he put together a 15-minute composite video of me getting my ass kicked by late night comedians. It's sort of humiliating, right? It was 15 solid minutes of Jack Oliver and Seth Meyers and all these different people. It was absolutely brutal. But thank God, for some reason it's never gotten on the internet, thank God. But, yeah, I looked at it, I said, "Okay, this is a rough situation. I'm going to get bounced. I got roughed up in the press. And so, I'm just going to go back and do what I know how to do, and try to speak honestly about situations," and I think that's a lesson, John. Look, we got our asses kicked in March. You don't see me complain about it.

John Darsie: (13:39)
Just keep going forward.

Anthony Scaramucci: (13:41)
Some people fired us. Other people hired us. My attitude is always live below your means, always save a little bit of money, and this way, when you get a little older in life, you have a little bit of a cushion, and then some good things happen. My buddy, Steve Cohen, is buying the Mets. I own a piece of that. That's great. And you have to stay balanced, and you have to look at the long run, and try not to burn bridges. So, your obvious question is going to be, "Well, what about you and Trump?" It's nothing personal with me and Trump. It's fine. He's just not fit to be the President of the United States. That's all. It's not a personal thing. It's just, to me, I think there's something off with the guy. It's too dangerous for the country.

John Darsie: (14:15)
Let's frame the whole thing. Let's frame the whole thing. So, you support Scott Walker as the Republican nominee. He fails. You support Jeb Bush as the nominee. He fails. You join the Trump campaign, despite the fact that you don't share a ton of values with Trump, but you thought he could be a pragmatic, post-partisan president. You go to his rallies, and it opens your eyes to what's going on in the country. There's a lot of blue collar people like the people that you grew up around in Port Washington, like your dad grew up around in Pennsylvania, who are really struggling, who feel like they're not part of this American growth story anymore.

John Darsie: (14:50)
And you wrote a book about it. Even after you left the administration, people say, "Oh, you turned on Trump because he fired you." Actually, that's not accurate. You stayed loyal to him and you actually wrote a book praising him and his work in appealing to the blue collar base of the country. But something happened. It was a process, really, that took place, that you eventually sort of rescinded your support of him, and you're now obviously campaigning against him and for Vice President Biden. So, what was that process like? What did Trump tap into-

Anthony Scaramucci: (15:18)
Okay, so this is unlike Sandra Smith on Fox News, you're going to let me explain it. It's just very simple. It's not a personal thing. Imagine the two of us are on the board of a publicly traded company. We select somebody to be the CEO, and then they demonstrate four years of this type of behavior, this type of policy decisions, and they're going off on their Twitter feed the way that he's doing. You're like, "Okay, this is not the right guy for us." It's not the right guy.

Anthony Scaramucci: (15:43)
And so, what happens in our country, it's not a hiring decision, it's a popularity contest or something, and then the media sets up this narrative that we have this great culture war, that this is a battle doing capitalism and socialism, or communism. It's a bunch of nonsense. It's not true. It's not capitalism or communism. We have a political construct in our country where we have a safety net for people that are indigent, but we have by and large a bureaucratic, capitalistic system, but you have to have some regulation and you have to create some opportunity for people that are starting at uneven places in the starting block. I grew up in Port Washington. That was a great public school. If I grew up in an inner city somewhere, maybe I wouldn't have gotten the same education that I got.

Anthony Scaramucci: (16:27)
And I think that that's the unfairness in our society. Life, of course, is unfair, but a good quality government is designed to try to create equal opportunity. I'm not about equal outcome. A candidate for the vice presidency, Senator Kamala Harris, she tweeted out something yesterday, people said, "Oh, that's communism." Go look at the tweet. Someone's starting behind the other guy. All she's trying to say is that a good government, an energetic government, it's not a left or right policy. It's a right or wrong policy. Let's even up the educational system so that people no matter where they're born, they can have a shot at things. That's good capitalism, if anything. That's not bad capitalism.

Anthony Scaramucci: (17:07)
So, my evolution with the president is very simple. He fired me. No problem. Stayed loyal to him. Went out to advocate for him. Now he's separating women from children. He's putting the kids in cages. Okay. You can't argue for that. I'm sorry. So, I denounced that. Then he's in Helsinki, he's saying that he believe Vladimir Putin over the intelligence agencies. Okay, you can't really abide by that. Then he's calling the press the enemy of the people. Him and Steve Bannon are ginning that up. Well, I'm a big believer in the free press. And by the way, I do not have standing with the free press. They beat the living hell out of me, and I have no problem with it. God bless, I talk to the reporters that beat me up as much as I talk to the reporters that don't beat me up, and my attitude is, you're a public figure, take the hits, who cares?

Anthony Scaramucci: (17:51)
But the thing about the press, John, it's very important people understand this, without the press, you don't have the innovation or the economic engine, because you're teaching young kids to speak and think freely. You're doing that in the first and second grade. They go on and create Facebook or Google or Apple Computer or an AI software technological platform. If you're censoring the internet like they do in China, or you're telling people they can't talk about politics, you start to narrow out their way of thinking, and they have to steal your intellectual property. They don't have the bandwidth to create it. And so, it's an important element of the country's success.

Anthony Scaramucci: (18:27)
So, I wrote an article, The Press is Not the Enemy of the People. The president called me on Easter Sunday, super pissed at me, and he said, "Oh, the press is the enemy of the people." I said, "Well, they're not. Read the article." "I don't have to read the article. I read the headline." I go, "All right, fine. Don't you want the independents? Don't you want the moderates?" And this is a very telling thing about the president. "No, I don't want them. I'm going to focus on my base, and I'll let everything take care of itself." Okay. I said, "Look, that's a bad recipe. That's not going to work." He hung up the phone. He was sore at me. It was the last time I spoke to him. And it's fine.

Anthony Scaramucci: (19:00)
And now we're going into the summer time, and he's going after the squad. So, these are four women that are in the Congress, some are African-American, some are Muslim-American, some are Hispanic-American, going after them. He's writing that they should go back to the countries they originally came from. What are you doing? Can't talk like that. That is racism. That is racism. That is American nativism. You can't talk like that. So, I said, "Hey, I'm on the show." I said, "I'm sorry, I'm not going to approve that. I don't sanction that."

Anthony Scaramucci: (19:31)
Rudy Giuliani, you know this, and Rudy has said this. I go back 30 years with Rudy. I wrote him a check when I was 25 years old when he ran for mayor the first time in '89 unsuccessfully. I said to the mayor, I said, "Come on, man. You can't accept that. Your grandparents, your Italian-American grandparents were told by racists and nativists to go back to the country they originally came from. You're going to accept that? You can't disavow your personal story and all your personal integrity to accept that sort of stuff." But Rudy said, "Yeah, no, I'm going to accept it." Rudy's going full bar right now. I don't know. I feel bad about it. I choose to view Rudy the way he was when I was a kid and he was cleaning up New York City. I don't like to look at him the way he is today.

Anthony Scaramucci: (20:13)
So, here we are now. Then the president goes after me, okay? That's fine. I'm a public figure. Ha ha, he he, you can tweet about me. And then I got to go after him, because you know my personality. I'm not going to sit there. So, I think I called him Fidel Adolf Trump. I think you were there. I had to get the fat shaming in. I called him the Notorious FAT. And then I think I got knocked off Twitter for 12 hours. You probably remember that. It was my first and only time that I've been knocked off Twitter. And then, he went nuts, and he goes after my wife. Who does that? He's going after my wife, the President of the United States. Who does that? I raised and gave the guy millions of dollars. I was on his executive team. When everyone thought he was losing after Access Hollywood, Chris Christie and I went and raised money at the Hunt and Fish Club for his transition, who no one thought he was going to have. We were out there raising money for it, giving money to it. He goes after my wife? You got to be nuts.

Anthony Scaramucci: (21:07)
So, I'm not Ted Cruz. You know that. I think Ted Cruz knows that. Most people know I'm not Ted Cruz. You're going to come after my wife, after her and I almost got divorced after me working for you. You know Deidre. She hates Trump. She probably doesn't hate him as much as Melania hates him, but it's up there. It's up there.

John Darsie: (21:23)
Nobody hates Trump more than Trump hates himself, and we've talked about that, but I'm losing my editorial independence now.

Anthony Scaramucci: (21:29)
Well, that might be true. Now he's coming after my wife. He knows her and I were in a battle over our marriage, almost got divorced. It's just this ruthless, insensitive, unempathetic nonsense. That was it. So, I got up in August of last year, and I said, "This guy's crazy. There's something wrong with this guy. He's irrational. He alienates people that could be allies of his. He doesn't have a unifying message. And he's crazy." And then people said to me I'm crazy, he's going to soundly win reelection. I said, no he's not. He's not going to win reelection because he's nuts. And there'll be a crisis that happens and he'll mishandle the crisis.

Anthony Scaramucci: (22:04)
Now, just quickly, and you were in this meeting, we had a senior cabinet official come to SkyBridge. Sat on the couch last October. And the senior cabinet official said-

John Darsie: (22:15)
And this is a real senior cabinet official, not a New York Times senior cabinet official.

Anthony Scaramucci: (22:19)
No, this was somebody named in the cabinet, a well-known name that everybody knows. And he said, "We're not going to be able to handle a crisis because the president, respectfully, can't manage anything." And so, if a crisis comes, you don't have any orchestration, any delegation, you're not running it off the Fred Greenstein, the Princeton professor, or the Richard Neustadt, the Harvard professor that studied the Eisenhower and Kennedy administrations. There's no managerial process in the executive branch, this cabinet official said. And a result of which when a crisis comes, it's going to be a disaster.

Anthony Scaramucci: (22:54)
And when the Soleimani strike happened, I was like, "Okay, this is the crisis that was being referred to." Thank God that abated. That seems like it's a hundred years ago now. And then we got COVID-19. And then he did exactly what people that are close to him that are honest about it would say that he would do. John Kelly, H. R. McMaster, myself. What would he do? He's insecure with the experts. The expert comes in, gives him the expert opinion, and he's insecure about it. They're talking in full sentences, and they got well educations and stuff. He's insecure. So, now he's got to do the opposite of what they're suggesting, because as General McMaster used to call it, it was an intuitive reflexive response to try to show the person that he knew better and that he was smarter than them.

Anthony Scaramucci: (23:44)
Okay. Maybe that will work in opinion-based stuff, and maybe it will work in foreign policy in certain areas, maybe. I want to be as fair as possible. But it's not going to work in science. You're not going to be able to say, "Okay, listen, the South Koreans are going to do the following to handle the epidemic, and they're listening to their epidemiologist. Now they have 20 deaths per million. And the United States is going to do the exact opposite and we're going to have this total chaotic response, and we're going to tell supporters of the president that they shouldn't wear masks, and we should just run rampant through the country," when we have guys like Anthony Fauci saying, "Well, if you do that, we're going to have tens of thousands of unnecessary deaths."

Anthony Scaramucci: (24:26)
And so, you got the crisis. The crisis impacted the president's personality. The president mishandled and lied about the crisis. And then he did, which is the most ironic thing, he wrecked the economy. And so, we can pretend that he's better for the economy than Joe Biden, but he's not. He's not better, because you got to handle the crisis. You got to make the people healthy first before the economy's going to respond.

John Darsie: (24:49)
Well, let's talk about that. Let's talk about that. You've been very vocal in the media talking about how you think Joe Biden is the better candidate for the economy and for markets, in spite of the fact that he's talking about raising income taxes for people making more than $400,000 a year, in spite of the fact that he's talking about raising the corporate tax rate. When you talk about pure corporate cash flows and you look at the stock market as a reflection of things that are going on in the economy, even though it's not exactly a reflection of the economy, why do you think that sacrificing tax rates for corporations and wealthy Americans is worth it and is offset by other normalcy that Joe Biden will bring to the table?

Anthony Scaramucci: (25:32)
Okay. Well, the first thing, you have to either believe or not believe. I believe that the president is threatening the institutions of our democracy and the checks and balances in the system. You don't have to believe that. Just go look at what he's saying. Look at his rhetoric. And Michael Cohen, myself, and others that know him know that he doesn't joke around. So, he's trying to subvert the process, and he would like to jail his political opponents, and he would like to stay in the White House. All of this despotic nonsense is stuff that he really believes.

Anthony Scaramucci: (25:59)
And so, when you've got the President of the United States in the middle of an election saying, "Well, I may or may not accept the peaceful transfer of power," you're like, "Okay, hold on a second. What made us a beacon of hope for mankind and a shining city on a hill is that we did that, and that we had an understanding in the country that we were going to do that peacefully. You can't talk like that from the American presidency anymore that you can tell people that were born in the United States, like members of the squad, three of them were born here, one's a naturalized citizen, to go back to the countries that they originally came from."

Anthony Scaramucci: (26:27)
So, it's classically un-American what he's doing. And so, I would stipulate to all my friends in business that he's very dangerous to the rule of law, and one of the cornerstones that has made American business so successful for hundreds of years is the predictability of the rule of law, the understanding that there is stare decisis, that there's precedent in the law, and that when we enter into legal contracts with each other, they're binding, and there will be some impartiality to that process. Moreover, if someone does something criminal in the country, we'll give them the right to defend themselves, and we'll presume that they're innocent, but there is some fairness there if you are harmed that someone will have justice sought against them.

Anthony Scaramucci: (27:16)
And so, you can't have this nonsense. So, without that, and then the next layer is, well, we got to be healthy. So, we can't have someone lying about the science or not having any managerial skills to handle a crisis, or having such insecurity that they can't even talk to people in the room. They have one run-on sentence where they talk to themselves in this stream of consciousness nonsense, where you've got real experts in the room that can tell you how to do something. And so, you keep going. Okay, well, his tax rates are better than Joe Biden's. Well, we don't know that necessarily. The Obama administration did not raise taxes for several years because the economy was too weak. I don't think that you're going to see a tax hike immediately. I just don't see it, because the economy can't afford it. The economy's in bad shape.

Anthony Scaramucci: (28:04)
The flip side, though, is we had Stephanie Kelton, who's a modern monetary theorist on our SALT Talks. I read her book, The Deficit Myth. She makes a compelling case for deficits not mattering. But she then also says in the book, chapter six, or five, that deficit's do matter, that you can't run it ridiculously where you're running a 50, 60% deficit per year on your operating budget. You don't want to rack up $100 trillion of debt. And so, the great irony here is that the president's done that. If you look at the Obama administration and what they were doing, it's more classically Republican than the Trump administration.

Anthony Scaramucci: (28:45)
So, there's a tremendous amount of hypocrisy, and then you have the news organizations that are fragmentized, and they're speaking into echo chambers in our society now, John. And so, there's a lot of people... I'm saying this. The flaps are going down over the readers. They don't want to hear it. Other people say, "Okay, that makes sense," and then they'll disagree with me on something else, and then bam, we've got the whole demonization thing going again, where we can't just be Americans having civil discourse and honest disagreements and working towards a consensus to come up with the right ideas. We have to have this black or white demonic thing, where if you don't agree with me, you're the devil, and this guy doesn't agree with me, he's the devil, and it's a battle between communism and capitalism. It's not. It's not a battle between communism and capitalism.

Anthony Scaramucci: (29:30)
Moreover, there's no culture war. On certain news media, they've got people believing that Trump is the last white man standing from the latte drinking hoards of Hispanic and African-American transvestites that are going to come up over the transom and take over the culture. That's how they talk to those people. It's not going to happen. First of all, I don't dictate how people live if they're living in the city of New York or South Dakota or Texas or California anymore than those people dictate the way I live here on Long Island. That is the most unbelievable gift of being American, that you have that level of freedom.

Anthony Scaramucci: (30:07)
And so, let's break down all of these myths about what's going on, and then this will clinically get the people involved. Is Joe Biden the perfect guy? No. I'm not saying he's the perfect guy. But he's a better guy than President Trump would be in this situation.

John Darsie: (30:21)
So, let's talk about that. So, there's two separate questions here. There's, what do you think the ultimate outcome of the election is going to be, and how do you think it's going to play out tomorrow on Election Day, despite the fact that in a lot of states, the turnout so far in early voting and in mail-in voting has already exceeded the total vote for 2016? But tomorrow is still Election Day. How do you think, ultimately, the election's going to play out? What's the map going to look like? Who's going to win? And then, how do you think things are going to play out tomorrow?

Anthony Scaramucci: (30:54)
Okay, so I'm not talking my book. I'm looking at it clinically-

John Darsie: (30:55)
Yeah, but this is objectively. This is not you rooting for Biden. This is objective view.

Anthony Scaramucci: (30:56)
Yeah. I'm looking at it the way a money manager would look at it, an analyst. Forget about who I want to have win. How do I think it's going to play out, is I think it's going to be consistent with where the polling is. There's an outlier poll called Trafalgar. They got more things right last time than they got wrong. They're calling it closer than, say, the RealClearPolitics average. And the RealClearPolitics average made a few Midwestern States... I think they missed them by a few points, but it was still roughly inside the margin of error.

Anthony Scaramucci: (31:29)
And so, if you look at the polling, you give the president the benefit of the doubt of the margin of error, he's going to lose the election. He's going to get routed by Vice President Biden. But, the other thing that I'm looking at are things like the Bet Fair Market, the Predictive Market. I'm a money manager, so I like following the money. Joe Biden, as of last night, is a two-to-one favorite. Now, there's gamblers on this call, there's people that understand odds. A two-to-one favorite is a very strong favorite. So, when Nate Silver's saying it's a 90% chance, sure, there's a 10% chance, but let me put it to you this way. I'd have to take a coin out of my pocket and flip it heads four times in a row for Mr. Trump to win. That does happen. So, he could win reelection, but the more likely scenario is that one of those will come up tails as I'm flipping, possibly more than one.

Anthony Scaramucci: (32:20)
And I don't see it happening. Anything can happen. But he doesn't have the groundswell that he had last time. And he happens to be the polarizing candidate this time, not Vice President Biden. And you've got a pandemic going on, and what Carville would say, 28 years ago, James Carville, "It's the economy, stupid." Today's mantra is it's the pandemic, stupid, because the pandemic is tied to the economy, and 67% of the Americans say they would trust Vice President Biden with the handling of the pandemic than President Trump. So, he's going. And so, the question is, how wide of a margin is he going, and then, what is he going to do, what kind of antic is he pulling?

Anthony Scaramucci: (33:02)
Now I'm going to say something some people are not going to like. I don't think he's playing to win this thing. If you look at his speeches or the rallies, what he's saying at these things, he's not really trying to open the tent or trying to get people to vote for him as much as he's trying to create a ruckus. I think he's trying to set himself up for a post-presidency that could be filled with media appearances or filled with some kind of political power related to this movement that he's created. And I also think if he's in trouble anywhere, he's going to want to use that political power to help him and his family if there's potential investigations that he's worried about.

John Darsie: (33:39)
So, Axios reported in the last couple days that he's telling people that if there's any hint that he might have a chance to win tomorrow, he's going to declare victory, and he's going to throw everything into a little bit of chaos. So, he would need to lose probably North Carolina or Florida for us to have a definitive proof by tomorrow night, Election Day, that he's likely lost the election. Do you expect him to lose states like North Carolina or Florida, or do you expect this to drag out for a couple days as we count all the ballots in a place like Pennsylvania?

Anthony Scaramucci: (34:11)
So, you're looking at the same polls, everyone on this call is looking at the same polls, so I don't have any insight there. I did a call with the Lincoln Project yesterday, and they think definitely that he's going to lose tomorrow by wide enough margins. I don't remember them specifically saying anything about Florida or North Carolina. But Bill Crystal, somebody I'm close to, he's done polling in Florida, independent polling, and thinks that the Vice President is up anywhere from 3-5%. So, that's still inside the margin of error. But if I had to guess, because of what's going on with seniors and suburban women, I'm guessing he's going to end up losing Florida, and that will be a very big deal. He won't be able to manifest any of these ideas that he's coming up with with Axios.

Anthony Scaramucci: (34:57)
If for some reason he doesn't lose Florida and it gets a little heated and more contested, he'll try to do things, but if you've got states certifying the elections and therefore bringing in the electors, one strategy that's been proposed is that he goes and sues everybody and says that the state legislatures should be picking the electors, and there's more state legislators that are Republican controlled, and try to subvert the electoral college and get the state legislators to pick the electors instead of the American people, and some vagueries about that. Even though he has such acolytes and he's had such amazing sycophants in the leadership of the Republican Party, I choose to believe that somebody like Mitch McConnell at that point will say, "All right, man, you've got to go."

Anthony Scaramucci: (35:43)
And this is a real lesson in demagoguery, because a demagogue can't do what it's doing without the help of people. You've got to have willing accomplices to do that. So, if you want to lie about the Ukraine and you want to see if you can get a blackmail scheme going with the president of the Ukraine, that's great. Okay. But, what are you going to do? You're not going to be able to... I don't know. You have 52 people that voted against it. Mitt Romney voted for it, understood the law. We've gotten ourselves into this politicization situation which is I think unfair for the country.

John Darsie: (36:20)
So, let's talk about something you do know about. You talked about you don't have any more data related to polling than anyone else has, but Pennsylvania is an area that I think you have a particularly keen sense of. You spent a lot of time in 2016 campaigning alongside people Like Don Jr. in Pennsylvania. Your dad's family is from the Scranton, Wilkes-Barre area. And Pennsylvania is seen as a key battleground here, because if Biden wins Michigan and Wisconsin and Minnesota the way people expect him to, then if he wins Pennsylvania, then he wins the election. What types of people do you think are ones that maybe voted for Obama in 2008, voted for Trump in 2016, and might be voting for Biden in 2020? What does that coalition look like? Why have they turned on Trump potentially, and why would they be attracted to Biden in this race?

Anthony Scaramucci: (37:10)
Well, they would be attracted to Biden because they would understand the way my dad understands having grown up in Wilkes-Barre and in that Scranton area that he's one of them. So, he actually has pathos and empathy for their struggle and empathy for the economic situation that many of those people are facing in terms of living paycheck to paycheck. I think Mr. Trump won those areas because Secretary Clinton, whether you like her or dislike her, I'm not picking on her, she probably didn't connect with those people, and those people have felt that establishment leaders have more or less left them to themselves. There's been a vacuum of advocation.

John Darsie: (37:48)
Despite the fact that she's from Pennsylvania.

Anthony Scaramucci: (37:50)
Yeah. She grew up in Wilkes-Barre as well. When I listen to Secretary Clinton speak, she sounds like my Aunt Eleanor, because my dad grew up... It's interesting. My dad grew up about four miles from where Secretary Clinton grew up, and 15 miles from Joe Biden. So, I know the area well, but I think the northeastern part of that state's going to go for Joe Biden in a way that will cause the state to flip over to Joe Biden. He may not get certain southwestern areas of the state or Pittsburgh, that still seem like they're for Mr. Trump. They believe in the cause of Mr. Trump.

Anthony Scaramucci: (38:25)
But here's what I would say to those people. And I have been saying this, because I've been doing local radio in those markets, and I've been doing local television, is that he's an avatar for your anger. He's been expressing what you're angry about. But he has not been offering a policy solution. He's had four years to offer a policy solution to what you're upset about, but he hasn't done that. And now he's threatening your elderly parents with the COVID-19 crisis. So, we may want to switch jockeys here and see if we can try something different.

Anthony Scaramucci: (38:53)
And by the way, Joe Biden is one of the, what I would call, a blue collar democrat. And so, I think you may get better policy response from Joe Biden than you would from President Trump who... He did a really big corporate tax cut, which I would say helped the stock market. It's unclear how much it helped wages at the bottom end. It didn't necessarily trickle down. But maybe Joe Biden can provide something that's more substantial for those people, and I think that's the right message.

John Darsie: (39:21)
So, you mentioned trickle down. Trickle down economics was a hallmark of Reagan Republicanism. And ideologically, I think we're starting to see a tipping point right now in the Republican Party. So, I think you still consider yourself a Republican, and you voiced a lot of concerns about the direction of the party. You've had people like the Lincoln Project, a group of what I would consider moderate Republicans who are trying to engineer a restructuring of the party. But 90% of Republicans support President Trump. Stuart Stevens wrote a great book, he's part of the Lincoln Project, about his role and how the Republican Party really is being exposed for its hypocrisy over the last 30 or so years.

John Darsie: (40:03)
How has the pandemic or even unrelated to the pandemic, how have things changed recently in terms of how you look at things like a social safety net, or how you look at things like access to healthcare, how you look at things like education? And when this is all over, and let's assume that Trump loses by as much as the polls suggest that he's going to lose by, how does that party restructure itself, and how do we basically build two parties where both of them believe that everyone's vote should be counted in an election, for example?

Anthony Scaramucci: (40:34)
Well, there's a lot of different potential outcomes for the party. Let's assume that he loses for a second. If he doesn't lose, party's going into a nuclear winter. It's going to become a white aging demographic. It's going to become a party of people that are buying catheters and My Pillows from Fox News commercial ads. That's what the party's going to be. And they're going to get trounced in 2024 and 2028. If they have a reckoning like they did in 1980 and they bring in leadership that has a wider bandwidth that can open the tent and can make the party look demographically more like the rest of the country, and they can reach out to people with different ideas that are necessarily, in my opinion, entrepreneurial ideas...

Anthony Scaramucci: (41:17)
The GI bill was an entrepreneur's ideas. Yes, it was a government program, but look at how many entrepreneurs sprouted out from that. The understanding of how to make big tech companies more innovative by potentially breaking them up, that's an entrepreneur's ideas. That's been going on for 15 years, looking at technology companies or businesses that need to be broken up so that there can be more innovation and more opportunity. The Andrew Yang stuff about universal basic income. You and I talked to Fareed Zakaria last week about a tax cut on the income. It's an earned income tax credit-

John Darsie: (41:56)
The earned income tax credit, yeah.

Anthony Scaramucci: (41:57)
... is what it's called. And so, there are ideas that you could present to people that all of a sudden, people that want better lives for themselves and their families, want more aspirational economic activity, want more self-reliance, also can get excited by. And so, if you're going to go down the rabbit hole of we're just going to have lower taxes and high deficit spending, this is the great irony about Trump's base. I think it's very important people understand this. Trump's base is the opposite of what you may think. They are religious conservatives, but they are by and large fiscally liberal, meaning that they want the Medicare, they want the Medicaid, they want the social security benefits, the workers' comp benefits, the unemployment benefits.

Anthony Scaramucci: (42:41)
And so, Trump understands that. And I've had conversations with him about it in 2016. People think that these people are fiscally conservative and they're religiously and socially conservative. They're not. They're the opposite of what people think. And so, I just think it's important that the Republicans have to figure out what the matrix should be to increase the size of the tent. If they go with Trumpism in 2024, I think they're going to get annihilated.

John Darsie: (43:07)
All right. We're going to go into SALT Talks overtime here because we have so much audience participation. I want to talk about, and this is an audience question, about your point about Trump somehow connecting with the forgotten man. He's been left behind by globalization. You wrote about this topic in an op-ed I believe this week. There's a lot of other social observations about income and wealth inequality, race inequality issues, the white grievance that's coming out of people who are now so fervently anti-immigrant. So, how do we make the argument for those people and bring them back into the fold rather than calling them deplorable and basically saying we're just going to ignore them in future elections? How do we bring them back into the fold and make that argument that the American dream still exists and is still attainable for them?

Anthony Scaramucci: (43:56)
So, obviously that's the question. And so, for me, I would want to offer those people a package of services from the government, and some of it could be education, some of it can be jobs training, education for their children, jobs training for themselves, and some liftoff package. It could be a UBI structure or it could be an earned income tax credit structure. But all of a sudden now, they've got some sense of fairness, and they've got some sense of fiscal stability. The amazing thing about the rejection of UBI by the very wealthy is that they're doing it for their kids. Every wealthy parent is giving UBI to their kids to help them get started. They say, "Oh, it's going to cost a lot of money. It's going to be deficit spending." Not necessary. It could be set up in a public/private partnership, where corporations get tax credits to help people, and all of a sudden those people are now inspired to go work for either of those corporations, or work on their own.

Anthony Scaramucci: (44:53)
What we're doing right now is because we're beating the living hell out of each other, we're not sitting down with any level of policy wonkishness to really go through what would work. And so, what I submit, and you've heard me say this publicly, we don't have a 10-year plan for America. We don't have a 15-year plan for America, a 20-year plan for America. We have a no-year plan for America. And so, while our adversaries and our competitors around the world are planning strategically, we're sitting here beating the living daylights out of each other during cable news segments.

Anthony Scaramucci: (45:24)
So, we could come up with a plan, and all of a sudden we can go to those people and say, "Okay, this is a better plan for you. We don't want you to be clinging to the state. We don't want you to be on the 'dole.' We don't want you to have us telling you how to live your life. We want to put money in your pocket and allow you to figure out a way to spend that money in the best interest of yourself and your family. We don't want it to be a top-down structure, but we want to give you some supplementation from the bottom to help lift you up." And I think that's the direction that the Republican Party has to go in, and still maintain a broad sense for propitious regulation and a broad sense for free market principles.

Anthony Scaramucci: (46:06)
But let's stop the hypocrisy you can't say, "I'm a free market guy," and then you want gas and oil credits, "I'm a free market guy, but Wall Street's blowing up, shoot me a trillion dollars to save my investment bank." You've got to look at it holistically, and you've got to say, "Okay, there's elements of the free market, and there's elements of incentives that work for people." That certainly inspired me. I believed 35 years ago if I worked hard, got educated, took some level of rational risk, I would create some amount of financial independence for myself.

John Darsie: (46:34)
Are you worried about deficits? You talked about Stephanie Kelton. We had her on a SALT Talk a couple months ago. She's one of the leading evangelists for modern monetary theory. The Republican Party seems to be concerned about deficits when there's a democrat in office but not when there's a Republican in office. But, we don't know what the long-term effect of these rising deficits and our rising debt will be. Are you concerned about that, or do you think as John Maynard Keynes would say, which we also had Zach Carter on who wrote a great book about Keynes as well, do you think the investment that we make today is going to be worthwhile in terms of the short-term deficit, in terms of the long-term prosperity that it's going to create for the country?

Anthony Scaramucci: (47:14)
I'm worried about deficits, but not in the classic sense that we were trained to worry about deficits. When Dick Cheney said deficits didn't matter, I didn't realize he was a modern monetary theorist when he said it. So, I've done a lot of work on it. I've read Stephanie's book. We interviewed Stephanie. What I would say is that the balance sheet of the United States is big enough to handle what we're doing right now. You've got 28% of the land in the United States is owned by the US Government, and there is natural resources under that land that's probably $60 trillion. So, if we were a company, and-

John Darsie: (47:50)
It's probably undershooting it, to be honest.

Anthony Scaramucci: (47:52)
Okay, I'm probably undershooting it. I'm just giving you a rough market base estimate. Maybe it's $100 trillion. But, the point being is if you've got a $30 trillion debt and you've got $60 trillion worth of assets, and you've got a $22-23 trillion economy with a robust tax base, you can handle the deficit spending. Where Stephanie and I disagree intellectually is that what ends up happening is if you get too much deficit spending, what ends up happening is the Central Bank always moves to monetize the debt. And so, this is why digital currencies are en vogue now, but let me just give you this example.

Anthony Scaramucci: (48:28)
We became a fiat currency in mid-August of 1971. So, that's 49 years ago. At that point, as a result of the Bretton Woods deal in 1944, one ounce of gold was worth $35 USD. When we pulled the pin on the gold standard and we let the dollar float, you tell me, John, I haven't seen it this morning, but it's probably like $2,000 an ounce now. So, we went from $35 an ounce to $2,000 an ounce. I'm just giving you the virtual realtime examination of how we devalued our money, how we monetized the debt. The house that I'm living in now, you would have to buy this house... It would be probably 1/20th of the price that I paid for this house.

Anthony Scaramucci: (49:16)
And so, it's an example of monetizing. When you monetize, the rich stay rich, because they own assets, and their assets are going up in price alongside of the amount of money that's being printed. Nobody cares. But the poor can't catch up. And if you look at the wages of the poor, they're down. My dad's wages, and I told Mr. Trump this in 2016, my dad's wages, his 1976 wages in 2016 were down about 26% in 40 years. So, you've got to fix that. That's fixable, but you've got to be very careful with too much deficit spending, because that's one of the negative side effects of it.

John Darsie: (49:59)
So, let's talk about foreign policy for a second. We have a question about the Middle East as an example. So, Trump has unsurprisingly taken a lot of credit for the Abraham Accords, which is, they call it a peace deal between Israel and the UAE. I think that's a little bit of a misnomer. Those two countries were not, in fact, at war, but it's a normalization of relations, which is a very positive thing. And we did our SALT Conference in the UAE, and have a lot of friends in the region, and it's a very positive development. We have a lot of friends in Israel as well.

John Darsie: (50:29)
But if you bring Vice President Biden into that seat, the presidential seat, how do you expect the current foreign policy of the United States to change, and also, how do you think it would be different relative to what President Obama pursued in terms of his foreign policy, not just in the Middle East, but all over the world? One area that you see plenty of people who served in the state department or in the Department of Defense, they had some frustration with some of Obama's foreign policy. And obviously there's elements of Trump's foreign policy that are problematic, and we won't get into different allegations of why that might be the case. But, what do you expect Biden foreign policy to be, and what do you say to people who are concerned about a shift there back into some of Obama's foreign policies in the region?

Anthony Scaramucci: (51:17)
So, John, what I would say, and it would be a very broad stroke here, what I would say is that learn something from President Trump. I want to be fair to him. He made the bold decision to move the embassy to Jerusalem. It didn't have the impact that other consensus people thought it would. I accept that there's been a 15-year relationship between the UAE and Israel, and with UAE and Bahrain, and they've had a good working relationship. But to formalize it, I want to give Jared Kushner and President Trump credit for that as well. I think that they helped nudge that along. I think that's very, very good for peace and stability. That air traffic, those commercial ideas transferring is very good for peace and stability.

Anthony Scaramucci: (51:59)
A critic would say, "Well, where are the Palestinians? Why are they not at the table?" You and I went to that peace initiative in June of 2019 in Bahrain at the Four Seasons, and we listened to what I thought was a very well thought out economic plan for the Palestinians, but unfortunately, it's not married to the dignity of political rights. And so, you're not going to be able to say, "Okay, I'm going to make you rich, but you're going to be enslaved by me." That's not going to work. So, you have to figure out a way to give dignity through the political process and then marry it to this economic aspiration. And that has to be solved for still. Those are very complex problems.

Anthony Scaramucci: (52:40)
One of the things that happened to me as a result of getting into politics is that you study the thing, or you read a daily briefing, like, "Oh my God, this is way more complex than I originally thought or the way it's reported in the news." And so, it's very complex. But I want to give the president credit for those things. And what I would say to the Vice President is be careful with Iran. President Obama went in a direction of empowering them through the Nuclear Deal. And some people in the region felt that that was sort of like empowering the bully in a neighborhood. And so, you're trying to get the neighborhood bully to come to the table so that you can stop the neighborhood bully from bullying people, but you may in fact be empowering the bully as opposed to disempowering them.

Anthony Scaramucci: (53:22)
So, I would want them to be cautious with Iran, and I think our friends in the Persian Gulf would say that. I think our friends in Israel would also say that. But, I think the good news is, is that there'll be more strategic thinking around our relationship with China, and more strategic thinking around the Western Alliance, and how to strengthen the Western Alliance and hit it in a positive reset as opposed to the sort of stuff that President Trump has been doing, by attacking Western leaders and Democratic leaders and praising dictators. I just think it's a bad reflection on the United States.

John Darsie: (53:58)
So, let's leave it with just a couple final questions about tomorrow. So, I think that's what everyone is focused on right now, is how the election's going to play out. We have a question from a member of our audience about the shy Trump voter. So, in 2016, there was a large swath of undecided voters and shy Trump voters. Do you think that phenomenon is going to play out again to the point that it could lead to massive margin of error in the polls, which is what would be necessary for Trump to win, or do you think that's a misnomer and conditions are a little bit different here in 2020?

Anthony Scaramucci: (54:30)
So, I think they are different. I do think that we've got more polling data around those differences. Even with more polling data around the differences, let's build in a few percentage points for the shy Trump voter. Let's say, and I'll use the Nate Silver example, let's say the polls are as wrong as they were in 2016, and then let's add two points to that, and when you make those two points be favorable to the president, he still loses. So, it may be there.

Anthony Scaramucci: (55:01)
But, listen, he'll have lost this election primarily because of himself. Ultimately, at the end of the day, if he had just said, "Okay, wow, got a crisis, let's look how the South Koreans are handling it, this seems like best practices. How are those guys handling it? Well, okay, you know what I'm going to do? I'm going to keep the American people safe. I'm going to get out on the phone, I'm going to tell them this is exactly what we're going to do. Listen to these experts. We're going to do this in an appropriate way so that we can get the virus under control so that we can experience economic growth when the virus is over," he would've won resounding reelection. But he didn't do that.

Anthony Scaramucci: (55:38)
And so, he wrecked the economy, and he created this self-loathing, self-destructive setup for himself. And so, if he loses tomorrow, and I predict he will, he'll have to answer to that at some point in his mind. He'll have to say, "Okay, well, how did that go so badly for me?" And when it didn't necessarily have to.

John Darsie: (55:59)
Well, we're going to leave it there. We could obviously cover a lot of different ground related to SkyBridge, SALT, and the election, but given everything that's coming up tomorrow, we figured we'd focus on that. Thank you, Mr. Scaramucci, for joining us today. I took it pretty easy on you. I thought it was going to be more like a roast, but you talked too much, so I didn't get my barbs in.

Anthony Scaramucci: (56:17)
I tried to filibuster you. There was someone that asked about telemedicine and tinnitus. So, unfortunately, I experience tinnitus, so just 30 seconds on that. No cure for that yet, but there will eventually be a cure for that, and so we just got to stay patient. I worked on a construction site as a kid, and you weren't protecting your ears the way you should've, and I'm sure a lot of us have been to rock concerts over the years as well. But we will get a cure for that.

Anthony Scaramucci: (56:42)
All right, John, thank you. May keep you around. I don't know, I was thinking about firing you after the Fareed Zakaria situation, where you were just ripping into me, but you were pretty gentle on me today, so we'll probably keep you around.

John Darsie: (56:53)
All right. Sounds like a plan. Well, we have you hosting Governor Cuomo now on Thursday, so that should be an exciting talk. Hopefully by Thursday we have a picture of who the next president's going to be, and I know you're hoping it goes in one direction, but-

Anthony Scaramucci: (57:05)
I think we will. I think we will. One way or the other, but I do think we will.

John Darsie: (57:07)
I know our office is in-

Anthony Scaramucci: (57:11)
And then we've got to work on healing the country, my brother. All right, man. Thank you.

John Darsie: (57:13)
All right. Take care, Anthony. Thank you for joining us on the other side of the ledger, to where you normally sit on SALT Talks. It was a lot of fun, and maybe we'll do that again in the future once we have an outcome for the election. Maybe in the first quarter we can talk about what Biden's first 100 days might look like and preview some of our conferences that we have coming up in 2021 as well.

Voice of Cannabis Series - Episode 4 | SALT Talks #93

“I believe Biden would sign any piece of [cannabis] legislation that comes his way.”

Jason Wilson is Principal at Fourth Wall Advisory, a strategic marketing advisory firm, and a Cannabis Banking Expert. Joining Jason is David Culver, Vice President of US Government and Stakeholder Relations for Canopy Growth Corporation; Patrick Martin, Principal & Director of Midwest Public Strategies for Cozen O’Connor; Erik Huey, President of Platinum Advisors; and Melissa Kuipers Blake, Shareholder at Brownstein Hyatt Farber Schreck.

A Democratic trifecta in congress and the presidency is the best case scenario for the advancement of the cannabis industry. Initially, expect to see a Biden White House use executive orders that address the decriminalization and rescheduling of cannabis. Though, the start of the administration will be consumed with the COVID-19 pandemic. Support for cannabis has grown steadily over the years and has become a bipartisan issue. In congress, legislation will likely focus on passing a new version of the MORE Act. Such a bill will likely make it to the floor for a vote, but would struggle to earn the 60 senate votes needed (if the filibuster remains intact). “There’s a lot of parallels here from 2008 in the marriage equality issue with Obama… We could have the same thing with Biden and Harris [supporting cannabis].”

LISTEN AND SUBSCRIBE

SPEAKERS

Patrick Martin.jpeg

Patrick Martin

Principal & Director, Midwest Public Strategies

Cozen O’Connor

Erik Huey.jpeg

Erik Huey

President

Platinum Advisors

David Culver.jpeg

David Culver

VP US Government & Stakeholder Relations

Canopy Growth Corporation

Melissa Kuipers Blake.jpeg

Melissa Kuipers Blake

Shareholder

Brownstein Hyatt Farber Schreck

EPISODE TRANSCRIPT

John Darsie: (00:11)
Hello everyone and welcome back to SALT Talks. My name is John Darsie, I'm the Managing Director of SALT, which is a global thought leadership forum at the intersection of finance, technology, and public policy. SALT Talks are a digital interview series that we launched during the work from home period with leading investors, creators, and thinkers.

John Darsie: (00:32)
And what we're really trying to do during these SALT Talks is replicate the experience that we provide at our global SALT Conferences, which we have an annual conference in the United States and annual international conference, most recently that was held in Abu Dhabi. And we're looking forward to doing likely a virtual Abu Dhabi Conference in early 2021.

John Darsie: (00:51)
But what we're really trying to do is provide a window into the minds of subject matter experts for our audience, as well as to provide a platform for what we think are big ideas that are shaping the future. And we're very excited today to welcome the fourth episode of our voice of cannabis series, where we bring together leaders and innovators from the front lines of the cannabis industry to talk cannabis politics, cannabis regulation, and the business of cannabis.

John Darsie: (01:17)
Today's episode is called the State of Play Before Election Day. And it's in partnership with Fourth Wall Advisory, which is a strategic marketing advisory firm. A special welcome to our newest panelists today, Melissa Kuipers Blake. Who's a leading lobbyist and seasoned political strategist, focusing on the field of cannabis.

John Darsie: (01:36)
Hosting today's talk again is Jason Wilson, who's a principal at Fourth Wall Advisory, and a cannabis banking expert with more than 15 years of experience in the asset management, finance, and structured product space. Jason has a track record of bringing hard to access asset classes to market. He's been working in connection with the legal cannabis industry for the past decade. And with that, I'll turn it over to Jason for the interview.

Jason Wilson: (02:00)
Thanks John, really appreciate it and great to be here for our final episode. Obviously lots going on, we go back to the VP debate, and I think when Senator Harris mentioned that if the Democrats win cannabis will be decriminalized or legalized, and man, did we ever see the markets move and the chatter start based on those comments?

Jason Wilson: (02:22)
Here we are a week to go to the big election and lot at stake. There could be several scenarios, several outcomes, so much going on. Eric, why don't you to kind of give us a state of play? What's the chatter? What're the expectations? Where do you see things going with it a week to go to the election?

Erik Huey: (02:41)
Perfect. Well, thank you, Jason, and thanks again to SALT and the team for having us back on for this discussion. Here we are a week out, it always seemed like people were saying it's a long ways away. It's too early to start to think about this. We're now seven days out, we're within striking days of this.

Erik Huey: (03:00)
And the reality is, we've already been in election month. This is the first election in American history where more people will have voted prior to election day than vote on election day. And the numbers that we're seeing are astronomical, 66 million people have already voted. 25% of them did not vote in 2016.

Erik Huey: (03:20)
And it States like Texas, that's 84% of the 2016 vote is already voted. In Georgia, 71%. We're seeing increased turnout among blacks, Latinos, and young voters. So people are getting to the polls early, there's a lot of reasons for that. A lot of it's COVID related, and safety-related, the numbers so far have leaned heavily democratic. A lot of that is due to, I think, voter enthusiasm, but also President Trump's comments about mail-in voting.

Erik Huey: (03:50)
Mail-In voting constitutes about two thirds of the votes so far, and in-person voting constitutes one-third. This could be the largest turnout we've seen perhaps in American history as a percentage, certainly the largest in terms of raw numbers and undoubtedly the largest in 100 years. So where are we? Right now, it's Joe Biden's general election to lose. He has had a very durable, steady lead for the entirety of the summer, all through the conventions into September, through October, in any October surprises.

Erik Huey: (04:27)
And here we are a week out and he finds himself up by nine points, almost 10 points nationwide in the poll of polls, the numbers I'm going to use are RealClearPolitics 538 poll of polls. So it's a polling average, he's up nine to 10 points. Hillary Clinton at this point was only up five, so that differential alone could be the Delta, but where [inaudible 00:04:50] as we know, the electoral college is how we judge who've won and lost.

Erik Huey: (04:54)
And the even though we may see a differential four, or maybe even five million of votes in favor of Joe Biden, the electoral college still could would determine this. So we look at where he is in the swing states, Michigan he's up by eight. Biden is up by seven in Wisconsin, Florida two, one Iowa, Pennsylvania five. Arizona, North Carolina, and Georgia up by three, two, and one.

Erik Huey: (05:22)
Trump is not out of the margin of error in any of the swing states and he's only up in Texas and in Ohio. What Joe Biden has done, he's grown the map, forcing the Trump team on the defensive nationwide and enforcing them to fight battles that they didn't expect to fight in places like Georgia and Texas, and spend money that they don't have, that the Biden advantage is two, if not, three to one, going into these final race weeks.

Erik Huey: (05:46)
And this is going to have an impact on down ballot races. So the Democrats, it's a non zero chance that Trump could win. We've seen that in 2016, but he does not have magic powers. This is a very different election in 2016, and it looks right now like Joe Biden is going to win well by over 300 electoral college votes.

Jason Wilson: (06:10)
Patrick. I mean, you're in the Midwest, we're talking about battleground States, and we also have the Senate to play here. I mean, that could flip, right? Where do you see this coming on emergence?

Patrick Martin: (06:21)
I share an optimism like Eric expressed, that the vice president is in a strong position, but mine is a very cautious optimism. And part of that is sort of living out more in the middle of the country, my in-laws and family are in Michigan. We spend a lot of time in Indiana and other states in the Rust Belt. And there is just a very different America and a lot of parts of the country than what you see in Washington, D.C., New York, San Francisco, and other large urban areas.

Patrick Martin: (06:53)
The battleground states are really close. And I think there has to be accounted for a percentage of people that are going to vote for President Trump, that don't tell pollsters that they're going to, or don't even answer calls when they get them from pollsters. I would also look at history as a guide, one thing we did in 2016, which is why I think a lot of us got the election wrong is, we didn't think that it mattered that you had sort of an insurgent outsider running against someone going for a third term, because we just thought that the fact that Donald Trump was Donald Trump was the offsetting factor.

Patrick Martin: (07:33)
And really all of the factors pointed to a Republican President having a really good chance in 2016, we just didn't think that it could be Trump. So let's look at recent history on incumbents who are defeated when seeking a second term. In the cases of both George H. W. Bush in 1992, and Jimmy Carter in 1980, you had incumbent presidents dealing with crisis at home and abroad, that suffered very, very contentious primaries within their own party in seeking the nomination for a second term.

Patrick Martin: (08:07)
And you had disruptive forces within the base that would be sort of a lack of support among core constituencies. I don't see any of that right now with Donald Trump, I mean, facing a crisis with this pandemic and the subsequent recession, but his base is firmly behind him. They were behind him in the primary, and the Republican Party is enthusiastic and energized about him as any political party has ever been about [inaudible 00:08:34] in my lifetime and probably my parents' lifetime.

Patrick Martin: (08:38)
I would make note of that. I would also just point out the obvious point, we are an evenly divided country, we're very divided. And I think you're going to see turnout that is very enthusiastic on both sides, because both sides feel like there's just a lot at stake for the country, and for people sort of way of life, and what they value and find important.

Patrick Martin: (08:58)
On the Senate races, which you mentioned, Jason, that's really important. I would point to an often repeated stat from 2016, but no Senate candidate in 2016 won a state that the presidential nominee of their party didn't win. We just don't see a lot of tickets splitting anymore. And as I look at the Senate map, I think that continues to make the Democrats path of the majority very challenging.

Patrick Martin: (09:22)
We'll have to see what the early vote numbers look like as we get close to the election, and kind of when all the votes come in, but I would say Biden is a favorite, but it is very tenuous in the same path that was available to President Trump four years ago, remains available to him today. And I think that's where things stand.

David Culver: (09:41)
Jason-

Jason Wilson: (09:42)
Go ahead David.

David Culver: (09:43)
Sorry, can I just jump in here with a quick comment, and also a question for either Eric or Patrick? Because I think their comments, both of them are spot on. First of all, I just want to say for the record that it is stunning to me that Joe Biden is in Georgia this week campaigning, and that that state is actually in play.

David Culver: (10:01)
A Democrat has not one that States since 1992, and I think Patrick alluded to that earlier, and that's something to keep a very close eye on in addition to some of the others that are running neck and neck. The second is that, there's been a lot of chatter about the staggering amounts of money that the Biden campaign has raised, and it is indeed record-setting, and staggering.

David Culver: (10:21)
The most important things in my mind though, in terms of the money is not the ad buys, but rather the paid GOTV, and also the paid legal, which there are hundreds of legal challenges across the country already. We know that this could potentially drag out until the second week of December. But they have actually the legal structure and pay in place. These are not volunteers, these are paid professionals.

David Culver: (10:44)
I think that actually is going to have a big impact, and I also feel like the paid GOTV is something that's not getting a lot of chatter, but it's really critically important. But one thing that I wanted to raise though, is that also this week, the one pollster from 16 that got it right, suggested that this time around it's actually a 5% kind of quiet Trump favoritism, right? Everything that we're seeing should be minus five, or plus five for president Trump. I'm just curious Eric, Patrick, if either one of you could comment on that, and if you think that that's actually real, and how that could potentially impact next week.

Erik Huey: (11:24)
Well, I would say, any one poll, you have to look at the biases of the poll, and the biases of the pollster, which is I think, why it's important to look at the averages, and where it's heading, and where the polls have been breaking. And the polls have been breaking not toward the incumbent, which is normal in elections. The challenger is where the undecideds break at the last minute.

Erik Huey: (11:45)
The polls are breaking to Biden, and Donald Trump doesn't have the advantage of A, running against Hillary Clinton who was extraordinarily unpopular. And he also doesn't have the advantage of running as an outsider. We've had five years to get to know him, and he's the only president incumbent in polling history who's never hit 50% approval.

Erik Huey: (12:06)
Right now, his approvals is at 43%, his disapproval is 53%. More than half of Americans disapprove of the job he's doing, and that's significant. Conversely, Joe Biden is over 50%, he's up by nine points, he's at 51, 52, 53 in these polls. And he's over 50 percentage points in key battleground South states, which Hillary never was. That doesn't mean he's ahead, that means he's winning those states.

Patrick Martin: (12:34)
I would agree with that, the polling certainly looks a little bit better for Biden right now. I think we're going to need to see over the weekend, as things tend to tighten in the last week leading up to the election. What sort of the real clear politics average looks like, the aggregate of all polls, but David, your point on spend the money is incredibly important. You and I both worked for Red State Democrats in our previous life.

Patrick Martin: (12:57)
And there is only so much you can do in some of these States to stay competitive with the Senate level during a presidential year. And so I think how resource data to GOTV, and to potential legal challenges, you've got like eight to 10 races that are all within the margin of error. You are going to have some really razor thin Senate results, and who ultimately can win, and prevail on legal challenges there, could ultimately tip the balance to either the Democrats or the Republicans.

Patrick Martin: (13:26)
I would just add one more thing on the silent Trump vote, and what percentage that is, I don't know. And I've certainly found the comments you mentioned very interesting as I listened to them as well. I would point out where my family lives, it's just sort of a general suburban type area. I think we're in the Chicago suburbs, but thank Philadelphia suburbs, Milwaukee suburbs, [inaudible 00:13:49] suburbs.

Patrick Martin: (13:51)
We will take a walk around our county, and there are a lot of Joe Biden signs. And this is Paige County, this used to be sort of ground zero for Republican support. There are almost no Trump signs, but there are a lot of Republican Congressional signs, there are a lot of Republican local elected official signs. And I don't think those people are voting for Joe Biden, I just don't. I just think that they don't want to put a Trump sign in their yard for fear of being shamed by their neighbors or whatever else.

Patrick Martin: (14:18)
And so I do think that is because of our politics, because of Facebook, and how tribal everything has become. There are a lot of people that are going to vote for Donald Trump, that people just don't really factor in. And I think that will be reflected in the overall results next week. I don't necessarily think it's going to be enough to tip the election, but if it is, I will be disappointed, but not surprised.

David Culver: (14:40)
Jason, just finish on my point here-

Melissa Kuipers Blake: (14:41)
[inaudible 00:14:41].

David Culver: (14:43)
Sorry, Melissa. But I'll just add quickly before Melissa jumps in. In my mind, this is a pure toss up, because of the silent Trump vote. And I appreciate my good friend, Mr. Dewey's enthusiasm, but I see this again. If you look at the battleground States, it's just a pure toss up, Melissa, please.

Melissa Kuipers Blake: (14:59)
Thanks David, and I would agree with that. I've worked in Republican politics since 1996, starting in Florida, and throughout the country. And there's been some very interesting dynamics there over the last few weeks with general support for Trump coming from places that are not traditional, including the Bernie voters.

Melissa Kuipers Blake: (15:16)
And if you talk to a Bernie voter, they don't have any interest in supporting Joe Biden. And they're not going to sit home either. And I had a conversation with an old boss a couple of weeks ago, who said his daughter who's 17, can even vote as a Bernie supporter, and has got a Trump sign in her car, and is doing everything she can to get Trump elected.

Melissa Kuipers Blake: (15:37)
There's these pockets right throughout the country where you look at the coast, and I think you can determine where they're going to end up. But you do look at the middle of the country, I'm living in Denver, and yes, Denver Boulder Metro are pro Biden, but when the minute you leave that city center, you find a lot of Trump signs. And not only did we see that, you see a lot of Trump flags, and parades, and this passion. And I've said to many clients over the last couple of days, this election is a lot about passion for Trump. You either don't like Trump by a lot, or you really like Trump by a lot. The energy is not around Biden.

Jason Wilson: (16:13)
It's fascinating, right? You said, there's this whole lightening rod, and there's this passion, and it's an incredible election experience. There's two crisis going on in the country right now. I mean, outside of the whole Trump issue, look at the fact that we have obviously a social justice crisis right before our eyes, 2020 has been a horrible year to remind us of all of that, and then layer on COVID on top of that.

Jason Wilson: (16:42)
We've been hearing a lot of chatter as how cannabis, tax revenues, job growth, we have a super majority of Americans living in states that have already legalized. We saw some progression with the Farm Bill passing, and hemp related products, but we still have hiccups at the federal level. Melissa, how's that coming into play? Obviously there's this divisiveness over whether Trump's president again or not. But is cannabis... Is there any electability to that at all? How's that affecting the voter's minds?

Melissa Kuipers Blake: (17:16)
Thanks, Jason. It's a great question, and it's funny, cannabis has been legal since 1996 in California. The first medical marijuana state, fast forward to present day, we've got 33 medical States, 11 adult use States. I would suggest the tipping point came first in 2012 when Colorado and Washington decided to legalize adult use. So yes, many states, I think 20 some states had medical by then, but to take that forward-looking step and say, we're going to have this as a recreational product.

Melissa Kuipers Blake: (17:45)
And then fast forward to 2019, where nearly 20 states legalized medical and recreational. And there's now been this tipping point, and after next week we may have five more states, which would put us at 38 States that have legal cannabis. And the question for any politician at any level is simply, well, if this is something my constituents want, why am I going to be opposed to it if I want their vote?

Melissa Kuipers Blake: (18:08)
And there's just this groundswell that has been building up over time with recreational markets coming online, and this acknowledgement by many members of Congress that while they may not have voted for it, and many of them didn't particularly on the Republican side, like Cory Gardner right here in Colorado. They do acknowledge that this is important to their state.

Melissa Kuipers Blake: (18:26)
And another very interesting piece of the cannabis conversation is how it's legalized. You have individuals who do ballot measures, and they end up putting cannabis in the constitution like we have here in Colorado. Well, interestingly enough, Republicans will say to me, as I speak to them about cannabis, "Well, we can't really defend ourselves with the second amendment in the constitution, and then deny cannabis, can we?" Because it's all about the constitution for us.

Melissa Kuipers Blake: (18:51)
Not only are they supportive, but they're leading the charge because it's cloaked in the state constitution. And those are conversations that we've had in Washington, I do think we're at a tipping point. Certainly in the next Congress and I know we'll talk a little bit about the scenarios and what that might look like after next week, but cannabis is becoming normalized, it's becoming socialized, is being put in the categories of alcohol and tobacco. And this is just another third pipe bucket of things that folks can use, should they desire for medical or adult use?

Jason Wilson: (19:20)
Yeah, and I mean, we're seeing it. Cannabis dispensary is being allowed to remain open during COVID as essential business. Obviously sales are going up, it clearly poised to do well in a post COVID type economy. You mentioned some scenarios, and obviously there's a number of them. I mean, there's a lot of people we're hearing even on the show a little bit expecting maybe a Democratic sweep.

Jason Wilson: (19:48)
Obviously we could see the Senate flip, we could see maybe... I don't know, we could talk about this, do the Republicans surprise the heck out of us. And do the Democrats lose control of Congress? I guess the best situation for the cannabis industry really is a democratic sweep. David why don't you speak to that a little bit? What would it mean if the Democrats flip the Senate, take the White House, keep control of the house?

David Culver: (20:22)
Good question, Jason. I think of all the scenarios, as you said, in my mind, this is by far the best for the cannabis industry. And I think that I should qualify that by saying that, no matter what happens on election day, and no matter what the makeup of Congress is, and who's in the White House next year, the momentum behind cannabis is going to continue.

David Culver: (20:43)
I've been at this for almost two years with cannabis growth, and the amount of momentum it has been staggering that I've seen, and I don't know that we're necessarily pushing the ball down the Hill, but we could get to that point early next year. Let's think about this, if it is a dumb sweep in two ways, first of all, if Biden Harris are in the White House, the political rhetoric that you've heard out of the campaign thus far has been around executive orders and decriminalization, and also rescheduling.

David Culver: (21:16)
We've never seen anything in writing particular, we don't know exactly what those executive orders would look like. And the proof of course, will be in the putting them in terms of what exactly does that mean generally or both of them would mean? But we'll need to see something in writing if that's in fact, the course that they go down.

David Culver: (21:32)
Now, they're going to be very focused right at the beginning on COVID. And it's going to suck all the political oxygen out of the room. And the bigger question in my mind, related to the cannabis, and other issues that they want to tackle is, how much can they do in that first 100 days, that's non COVID related. But let's assume that they do act relatively quickly on this, and then we would see those two executive actions early next year.

David Culver: (22:00)
But the bigger question though, in my mind is that, we're in the political silly season right now. And does that position that they have currently stick? I know that there's a number of us in the cannabis industry that we'll continue to chat with the Biden Harris campaign, and talk to them about policy, and whether it makes sense to reschedule cannabis, or to take it off altogether, if they'd be willing to go that far post the election.

David Culver: (22:25)
Those are some things to watch this fall and obviously pay very close attention to the rhetoric. But from what we know thus far, those two executive orders could be the action out of the White House. The second and parallel track is action on Capitol Hill. If we have Nancy Pelosi leading the house, and Senator Schumer leading the Senate, we know that cannabis legislation is going to move through a regular order. And by that, I mean that it'll be re-introduced in both houses, there'll be a number of bills, but most likely in my mind, the focus for next year is going to be prominently on the MORE Act, and the 2.0 version of said bill.

David Culver: (23:09)
But I do think that the legislation will be reintroduced, it'll go through the committee process. And then it's a question of whether or not it has to get over the filibuster in the Senate or not. If it has to hit that 60 vote threshold, then this becomes a much harder exercise to get it through Congress. If it doesn't, if the Democrats remove the filibuster, which they haven't shut the door on doing, then we could see this thing sail through a bit easier, because it would be a matter of picking off a more moderate Democrats that are questionable on cannabis versus trying to find another 10 more moderate Republicans to it through.

David Culver: (23:45)
And then final point I'll make is that, the big question then of course will be if Congress does act on a full descheduling package, what does the Biden Harris team do? Do they sign it? Do they not? That's kind of the million dollar question in my mind, we just don't know. But I will say that having Senator Harris as a part of that ticket, she's the sponsor of the MORE Act.

David Culver: (24:10)
I do think that there's a lot of parallels here from 2008 in the marriage equality issue with Obama, and oddly enough then Senator Biden, who was very pro marriage equality. And we all know how that one played out. We could have the same situation with Harrison Biden going into next year, once elected. But we'll have to wait and see.

Jason Wilson: (24:32)
Melissa, what happens in a status quo situation? I mean, Trump stays in the White House, McConnell's controlling the Senate. What happens in that outcome?

Melissa Kuipers Blake: (24:45)
I think you'll continue to see Pelosi and her house team pushed the issue. The Republicans in the Senate have consistently said, we need this to be a house issue, and then we can negotiate the details of it. I don't expect that that would change. And I'll get to why in a second, when we talk about Senator McConnell. But in terms of the house, I think Pelosi and Senator representative Perlmutter would put together the SAFE Banking Bill again.

Melissa Kuipers Blake: (25:07)
They would probably combine it with the MORE Act and work with Chairman Nadler and his team. There's no doubt there would be some social equity language, very front and center on that legislation. They passed an omnibus or a comprehensive Cannabis Bill, it comes over to the Senate. And the question is, does it hit with a big thud as it has over the last several years?

Melissa Kuipers Blake: (25:28)
And I think now in a new environment with Trump having been reelected, that might actually get some traction, and there's a couple of reasons why I think that. Members are no longer up for reelection that are in very difficult races, they have a little more leeway, right? So they have six years before the re-election to make nice with voters at home, assuming voters at home are opposed to cannabis.

Melissa Kuipers Blake: (25:50)
Based on our earlier conversation about potentially 38 States that are legal. I think the senators have a little more room now to say, I may not agree with this issue, but it is now legal and I have to honor my voter intent. When you get to the president, and he's a lame duck now, and there's a lot of appetite for the president to move forward on the State's Act, he said it publicly, he said he would sign it if it got to his desk, and that's what we've been working on for the last several months and years.

Melissa Kuipers Blake: (26:16)
The concern there for him right now is of course, evangelical voters. And how do they feel about cannabis? And the last thing he can do is erode that base, knowing how much as we previously discussed, he needs those voters to turn out right now. In a lame duck scenario, I think the president has more room, his closest advisers, including Ivanka and Jared have had very meaningful dialogue with the industry about this issue, so I think there is a path forward.

Melissa Kuipers Blake: (26:39)
And back to McConnell for one final second. You talked about the banking efforts on hemp and how hemp is a priority for Kentucky. The problem is, McConnell... Cannabis is not a priority for Kentucky yet. We're hoping that will be a factor in the coming years. But McConnell is really a bubble up leader. And what I mean by that is, he doesn't say to his Republican conference, here's what we will and will not do.

Melissa Kuipers Blake: (27:02)
What he says is, if you have a critical mass of an issue that this is important to you in your home states, you come to me and we'll find a way to make it work for the collective good for the majority of the Congress. But the last thing he'll do is put his members on record on an issue that might only matter to one or two senators. So this all goes back to this grassroots effort, this groundswell, to get enough senators interested to go to Senator McConnell as the leader and ask for some room on the issue.

Jason Wilson: (27:29)
Eric, think about Biden Harris victory, but the Democrats can't slip the Senate, how much friction can be tied, how's that going to change the analysis of these outcomes?

Erik Huey: (27:43)
Let me first say that Senator Harris' remarks in the VP debate were C-change for the Biden campaign, and her remarks or her ability to make those remarks, they've moved from sort of her personal beliefs to the official position of the campaign, were the result of a lot of work by the cannabis industry and outreach by the cannabis industry, including a number of folks on this call, most notably David Culver.

Erik Huey: (28:14)
I believe that she could not have made those remarks without that outreach. We've seen this campaign move, and I think it will continue to move. I think president Biden, if elected would sign any piece of cannabis legislation that comes his way, whether that's the MORE Act, whether that's the State's Act, or whether that's SAFE Banking, or some sort of Cannabis Omnibus, Can-Omnibus if you will, they could come his way.

Erik Huey: (28:41)
Will it get through the Senate? As Melissa rightly pointed out Speaker Pelosi, and there's zero chance that the Democrats will lose the house. They will all in all likelihood probably lose five seats in places that they shouldn't have won, and then probably pick up five, or 10 more. So it'll be about a wash, but they may actually gain seats.

Erik Huey: (29:01)
Speaker Pelosi, and she will be Speaker Pelosi, we'll continue to move this legislation. And then if it comes to the president's desk, President Biden will sign it. So the question then becomes, can you get it through the Senate? And Melissa just sort of outlined what will likely happen on the Republican side, on the Senate. If there is intransigence and this continues to be a political winner for Democrats, then to David's point, you could see some executive actions by the Biden administration where they D schedule.

Erik Huey: (29:39)
And I view all of this, any one of these actions, whether it's SAFE Banking or the MORE Act it's sort of like the day the Berlin wall fell in cannabis, because shortly thereafter, that one event meant that Czechoslovakia fell. It meant that all of the dominoes, if you will, toppled. Any one of these trigger events, even through executive action, I think will completely open this up for the industry, which is exciting.

Jason Wilson: (30:05)
It is incredibly exciting, and fascinating to see how this all comes into play, but we have to keep in the back of our mind. And I want Patrick to speak to this a little bit. Sure as many of us are of Democrat victory. I mean, what happens in the other scenario where Republican stay, let's assume. It's not even status quo, let's assume that that Senate remains Republican controlled, Trump stays in the White House. And I mean, maybe the house flips and ends up under Republican control. Patrick, what are your thoughts on that? What would that mean for the cannabis industry if it went that way?

Patrick Martin: (30:51)
Well, I think the scenario Jason, that we discussed, I call it the least likely scenario, at least in my view. Or the least likely scenario, I think would be the Republicans take back the house. But the second least likely scenario in my view would be President Trump is reelected, but the Democrats flip the Senate. It would go against everything I know about politics for that to happen, but I spent a little time [inaudible 00:31:16] how it would work.

Patrick Martin: (31:17)
And I'll just propose this as a potential scenario, rules are being broken in politics all the time. As sure as I am, that it won't happen you never know. But in 2016, the Republicans were able to maintain their Senate majority primarily, because President Trump helped pull a lot of their incumbents across the finish line, and states that were really competitive at the presidential level.

Patrick Martin: (31:39)
It was a little different in 2020, is you have some Senate races taking place in swing states, but not nearly as many as there were in 2016. So this type of scenario where the Democrats control both houses of Congress and Trump gets reelected, you would have to have a certain type of situation where the Democrats gained the majority through these competitive really well-funded Senate races in Arizona, North Carolina, Colorado, maybe even Montana.

Patrick Martin: (32:06)
But that in the swing states that don't have competitive Senate races since the table, and that's like a Florida, Pennsylvania, maybe the Republican Senate candidate in Michigan does really well, or Peter's pulls it out, Wisconsin, Nevada States like that. And there would just have to be sort of an alignment, but in [inaudible 00:32:27], it would present a really complicated political dynamic where you would have to balance a democratic controlled Congress who is going to have [inaudible 00:32:36] disappointed base of their party, that the president was reelected.

Patrick Martin: (32:40)
But also the opportunity that you have a very ideologically flexible president, and is there the potential to get things done without him having to worry about running for [inaudible 00:32:53], you could see some real back and forth on what can we attach SAFE Banking to that we would just force him to sign, with some things like that. The two things I'll add to Melissa's comments, one, President Trump has said, he'll sign things and won't sign things all the time and then changes his mind.

Patrick Martin: (33:11)
It's really hard to know sort of what he'll ultimately do at the end of the day. I worry a little bit about his interest in signing cannabis legislation without any political upside, given that he's already been reelected. And the other thing is Melissa pointed out correctly, there are some really important advisors around him who I think was making progress on this issue. There is one very important advisor with a personal vested interest that he doesn't do anything and that would be Vice President Mike Pence.

Patrick Martin: (33:41)
He needs that evangelical support, he absolutely wants to run for president in 2024. And you could see him going to the president and saying, "You cannot do this to me, I cannot have this administration stamping support on cannabis when I'm going to be seeking the support of evangelicals in the 2024 primary." And you'd have powerful voices on both sides weighing in with him and then it's just like, it is every other day in Washington, right now. It's trying to get into Donald Trump's head to figure out what he's going to do, and I don't think I'm going to go there, I'll leave that to others.

Jason Wilson: (34:14)
Let's assume we have a lame duck session coming our way. And we obviously have a number of bills that are out there right now. Eric, assuming a lame duck session, do we see any progress? I mean, maybe it's the SAFE Banking Act that can get some traction. What do you see happening in the first few months post election?

Erik Huey: (34:37)
Well, I think that it depends on the election results, right? In the shape and the contours of a lame duck package, particularly if it's a stimulus relief package are going to be governed by the outcome of the election. In other words, if the Democrats sweep, leader McConnell will want to get as much into this package as he can, because he knows that he'll be coming out of the majority in January.

Erik Huey: (35:03)
If he holds onto the Senate, he will have more leverage certainly. And they might come to some sort of a conclusion. I think it depends on the parameters of this, assuming that it's a small let's fix PPP, let's do some funding around state and local, and a couple of the other things that we want to do, extending unemployment benefits up to 400 or $500 a week.

Erik Huey: (35:26)
That's a skinny package, that sails through without any of this. If it's a much larger package in the lamb duck, that's where you could see some pressure from Speaker Pelosi, who could be newly empowered and currently minority leader Schumer to say, "Hey, we've had SAFE Banking pass the house of representatives, it's part of the Heroes Act. So let's just include that in this package, there is no real natural constituency on the other side, this is going to grow jobs, not only in large cities, but throughout America, in communities, large and small, urban, and rural." And they could push that.

Erik Huey: (36:15)
I think it remains to be seen, at the same time you're going to have Progressive's, and a lot of Democrats say that no matter what passes in the lame duck or thereafter, you've got to have a social justice component to this. If you do not have social justice, we simply aren't tackling this in the right way. And you've heard me say this before, but we have 8 million people who are in prison right now for cannabis offenses.

Erik Huey: (36:39)
We arrest somebody every 17 seconds in this country for cannabis, black Americans are four times more likely to be arrested the cannabis. Our cannabis policies, historically through 1971, and rescheduling, were designed to put black and brown men into cages. So moving forward on any aspect of this, we'll have to have social justice, whether that's in the lame duck or next year.

Jason Wilson: (37:05)
Well, and obviously the MORE Act speaks to that directly, but obviously we didn't have any movement on it this year and we've pushed it back. David, where do you see the MORE Act going? I mean, is it going to come back in its current form? Is there going to be modifications? How's this all played out?

David Culver: (37:25)
Let me get MORE in a second, I want to just add one other comment about the SAFE Banking Act, which is, I agree with everything Eric said. I think that that is a very possible that we see a legitimate action in both houses on SAFE Banking in the lame duck period. Primarily because it's been endorsed by so many groups across the country, and also because this is a health issue now.

David Culver: (37:46)
You have all of these dispensaries, which have been deemed essential that are dealing with cash money all day long every day. That's a problem, and that's got to stop. I do think that access to the banks is really critical from a public health perspective. Now, onto the MORE Act. First of all, in terms of the lame duck, leadership in the house of representatives has made iron cloud promise to the bill sponsors, that they are going to vote on the MORE Act this fall.

David Culver: (38:17)
We don't know exactly when, and of course, as Eric alluded to earlier, the election impacts could potentially impact this MORE Act vote. But it was polled prior to the election, there was some nervous members inside of the caucus about voting on this bill prior to the election. So they pulled it, they promised to do it in the lame duck, I do think that we will see this historic vote come in November or December before they adjourned for the year.

David Culver: (38:45)
I don't think that the bill, as it was introduced in April of 19, is going to change very much, Jason. I think it's going to be relatively the same package as was introduced. And as members of Congress have co-sponsored. But going into 2021, I think, but I'm going to call it the MORE Act 2.0, I don't know exactly what it would be titled, but I think it's going to be different.

David Culver: (39:10)
First of all, you're going to have a very, very loud group from the left, especially if it is the Dem sweep. Either way though, you're going to have a very loud voice from the left, and there's going to be a lot of incumbents on the Hill that are looking to embrace the cannabis issue, especially those that are in the Senate and up for re-election in 2022. So I'll let you go back and do your homework on that one, but there's a lot of powerful folks in the Senate on the Dem side that are going to be looking for issues that will appease the left to make sure that they are not challenged from the left. And there's no better way to do that than cannabis.

David Culver: (39:46)
The second thing I'll say is that, the MORE Act punted the entire regulatory structure for cannabis to the tobacco model. And I think in my mind, that's something that I spent a lot of time thinking about and talking about, that's going to be the big change. What does that regulatory structure look like inside that bill that's specific to cannabis? What's the tax structure to look like that would allow for a transition from the illicit market into the legal market?

David Culver: (40:13)
The burden isn't set too high at the beginning, but perhaps ramps itself up over a period of time. How do you regulate medical cannabis versus recreational? All of these questions, I think HIll leaders are starting to look at. And I think that when we see the MORE Act in 2021, it's going to have a new and robust regulatory structure. It's still going to have all of the social equity provisions that Eric alluded to earlier.

David Culver: (40:38)
And I think if we do need a new Senate Bill sponsor, if Senator Harris is Vice President elect, then I think you should look to that class of 2022, and or other members that are concerned about their left flank. So that in a nutshell is kind of how I see them MORE Act for next year.

Jason Wilson: (40:59)
You touched briefly on the regulatory aspect and there's been in the last few weeks, there's been a fair amount of discussion regarding the States Act, actually, maybe being the best paths of regulation. Melissa, you're in Colorado and obviously been in the middle of this for almost the last decade. I mean, what's your view for a sec the States Act.

Melissa Kuipers Blake: (41:21)
I think the State's Act is really quite gorgeous in its simplicity, and essentially saying if cannabis is going to remain on the schedule one list, but if you're in a state that has legalized cannabis, then the federal law and the punitive nature of remaining on schedule one would not apply to you. And when you present that to a legislator, particularly in a Republican Senate, they are interested in hearing that conversation based on the 10th amendment and state's rights.

Melissa Kuipers Blake: (41:50)
The concern was the State's Act in the house and I understand it, and I hear it loud and clear, is there's not a social equity component. The question lies, is there a trifecta possible between the States Act, the SAFE Banking Act and social equity language. And I think that is where many of us in the industry and in on the Hill are looking, is there a global deal to be cut? If so, what does that look like?

Melissa Kuipers Blake: (42:14)
And I'll say, Republicans are generally okay with a social equity or social justice component, what they are generally not okay with is expungement language, where you're going back in time and changing previous marijuana convictions. And they tend to give me the same response, which is, well, if the speed limit was 50 miles an hour 10 years ago, and you got a ticket and now it's 65, are we going to go back in time and give you a refund on that ticket and change your points?

Melissa Kuipers Blake: (42:41)
No, but we will look at it going forward and that whether it's good or bad is the general law and order view of Republicans. So to the extent they're willing to entertain a Cannabis Bill, I do think there would be language similar to perhaps the first Step Act and looking at a second Step Act, which I think is coming as well, and that would be led by the president.

Melissa Kuipers Blake: (43:01)
Could we perhaps include social justice language and the second Step Act, as it relates to cannabis, and then have a separate bill that deals with the mechanics to David's point, of how is it going to be regulated? What are the banking guidelines going to be? What are the rules of engagement? Does it look more like alcohol, or tobacco, or something altogether different?

Melissa Kuipers Blake: (43:20)
There may be a hybrid of a couple of bills, although I think an omnibus for those of us in the lobby co would be a much better way to do it. But I think the State's Act for people, for even on the Democratic side, who don't necessarily like cannabis, and many of them don't. I think that's one of the misconceptions is that all Democrats like cannabis and they're supportive of it.

Melissa Kuipers Blake: (43:38)
There are many Democrats I've talked to who have family reasons, and personal stories that are very sad and tragic, and they want nothing to do with legalizing cannabis. It's a matter of finding a reasonable path, not necessarily a partisan path. And the thing that I've learned the most over the last decade or so is that, this is really not a partisan issue. It appears to be, but the more you dissect it and the more you talk about it, it's actually quite bi-partisan.

Jason Wilson: (44:06)
It's amazing, right? I mean, we have all these different pieces of potential legislation that come into play, and so many steps. I mean, even just to get in the regulatory structure, right? Absolutely fascinating how this is going to work, 2021 is going to be a banner year, but the one thing we do seem to know for sure. And you mentioned it earlier and also briefly is that, we're going to see quite likely and real quite potentially five more states legalizing. We have five ballot initiatives this year. David, do you want to touch on those states and what's happening there?

David Culver: (44:37)
Yeah, for sure. I like to think about... Let's see, what five when we rattled them off for the listeners Arizona, South Dakota, Montana, New Jersey, and Mississippi. And there was a lot more that were under consideration at the beginning of this year, COVID got in the way of some of them, but fast forward to a week before the election, and now we have these five states, which are fabulous. But we also have a number of states that their governors have come out publicly and been very vocal about the fact that they would like their state to act as well.

David Culver: (45:16)
There's been a number of reasons, but the primary driver of course, is the giant budget gaps that states are facing. The way that I like to think about these five ballot initiatives, and they are critically important, and hats off to all of those that are working in those five states especially our friends at the Marijuana Policy Project, they've done a really good job on all of these thus far. And I think that the numbers that I received this week are all looking good.

David Culver: (45:44)
But there are four main things in my mind when I think about this. Number one is normalcy. Melissa alluded to this earlier in her comments, the more states that legalized, whether they're medical or recreational, the more normalized cannabis becomes. Number two, is going to be the economic impact that I alluded to earlier. States are looking for jobs, they're looking to fill their tax coffers, which have been devastated because of the pandemic.

David Culver: (46:10)
And these are real discussions that they're having inside of state capitals about how did they do it? And cannabis could be a brand new industry for their state and could generate an amazing amount of positive economic impact, which the state is going to want to capture, because we don't obviously have interstate commerce at the moment. And if you do legalize in some way shape or form your state capitalizes on every aspect of it.

David Culver: (46:32)
Number three is, the impact on federally elected officials, right? If a state that has two Republican senators is to legalize, then like South Dakota, I'll pick on them. Melissa alluded to this earlier, those members in the Senate are going to have to scratch their heads and think about their policy position, because it's going to be important that it somewhat mirrors what their public wants, what their constituents want.

David Culver: (47:02)
And then the final thing is the regional impact. And we may want to get into more discussion on this with the other panelists, but if you think about a state like New Jersey, which is population heavy, which is surrounded by New York, and Pennsylvania also population heavy. If New Jersey does legalize, when I think they're going to, then what does New York do? What does Pennsylvania do? And you've heard the Pennsylvania Governor and Lieutenant Governor, very vocally calling for a legislative solution to this before the end of the year, and or next year.

David Culver: (47:34)
You've also heard just this week, Governor Cuomo come out saying we are going to legalize next year. And they need to do that because they need to fill their tax coffers, and they need to get the jobs, and they don't want their neighboring state of New Jersey to reap the benefits of this. That in a nutshell is how I think about it, and I think that... I mentioned earlier that the momentum is going to continue in the cannabis space next year, no matter what happens next Tuesday. And a lot of the reason I say that is that we are going to see more and more states whether through ballot initiatives, or through legislative action, look at cannabis very, very seriously next year.

Jason Wilson: (48:12)
I mean, you mentioned Pennsylvania and Governor Wolf. He's been very vocal and very critical. Patrick, I mean, I got to believe it's New Jersey, obviously that initiative moves ahead. That Pennsylvania moves to legalize this year as well, what would that look like? What would that mean?

Patrick Martin: (48:33)
I mean, there is a real possibility that the adult use can get done in the lame duck in the Commonwealth of Pennsylvania, but the real issue is the Republicans just aren't quite there yet. And it may be that we're looking to next year for a better opportunity for this to happen in Pennsylvania, that the electorate is certainly very, very popular both the amount of coal program and the prospect of adult use.

Patrick Martin: (48:58)
And also the budget shortfall that David mentioned as a result of COVID, that localities, and municipalities, states are cash strapped, and they are desperately trying to find ways to fill that budget hole. But to your point, Jason, each of these states regionally getting closer makes it much more likely that everyone's going to kind of tiptoe up to the finish line.

Patrick Martin: (49:23)
I mean right now it's like all three of these states all want to ask the same girl to prom, and neither of them are just willing to kind of take that final step and do it. And I can speak from the experience here in Illinois, that a factor that really, really helped in our legislative debate, and ultimate passage was the fact that Michigan had this on the ballot. And so you had a state regionally close by, that wasn't just saying, we're going to legalize it or use for legislature.

Patrick Martin: (49:51)
They have a Republican legislature that wasn't really an option, but because it was on the ballot, folks here knew there's going to be a set date that we're going to know if this is going to be legal in the state of Michigan. And ultimately it did pass. Amongst all the other factors that helped it along, that was a big one and my evidence would be, Illinois has a democratic governor overwhelmingly democratic legislature, but so does New York. The fact that there hasn't been sort of a forcing action from another state and the region, I think has made it possible to block it a little bit for all the reasons we've all followed in the states.

Jason Wilson: (50:29)
Melissa, may I ask you. You're in Colorado. Can we look at Colorado as, I mean, obviously, one heck of a model. And we're speaking specifically, I mean, not just revenues, can you walk us through what's happened from sales, from revenues, what that's meant to communities, and what's the reaction been since? I mean, how has this been perceived years later? Talk to us a little bit about it.

Melissa Kuipers Blake: (50:54)
What's happening in Colorado. Happy to share that. When adult use was on the ballot in 2012, nobody thought it would pass including the governor, including the attorney general, including a lot of observers, including myself. Who've watched polling and watched campaign events here for a long time. It passed it and got more votes than Obama in 2012.

Melissa Kuipers Blake: (51:15)
And the next day after the election, we all looked around and thought, "Oh, okay, well, I guess we have to do something about cannabis." So Governor John Hickenlooper at the time put together a commission of people, quite frankly, that he trusted from across all levels of government, and private sector to really literally write the first cannabis laws in the country. So that entire year of 2013 was our legislative session dealing with the implementing bill, and the legislature included certainly a state tax that would have to go to our voters based on the way we have something here called TABOR, Taxpayer Bill of Rights, where voters have to approve all tax increases, even if they already approved the underlying tax measure.

Melissa Kuipers Blake: (51:53)
We passed the legislation through the legislature in 2013, put it on the ballot in 2013, had the taxation approved, which allows for state sales tax and wholesale tax, and gave local governments the discretion to either opt in or not to cannabis, and either to tax, or not based on the voter approval in 2013. Fast forward to January 1st of 2014, we go live, you saw the lines on the news of people waiting to buy the first legal cannabis, probably after years of buying illegal cannabis. So it was a big day.

Melissa Kuipers Blake: (52:23)
And from that point forward, I will tell you, the sky has not fallen here. And a lot of people thought that it might that, what were we doing, what would this mean for kids? A lot of the studies and a big one called the Healthy Kids Survey that the state Colorado Department of Public Health does every year, has come out and essentially said, "Teen youth is not up with regard to cannabis, it in fact remains flat if not down after legalization.

Melissa Kuipers Blake: (52:48)
The public service announcements are working, the education is working, the dissection of medical use for cannabis from adult use is working. And there's a lot of public relations and PR campaigns by the state around those two issues. At the end of the day, let's talk money, right? What has this done for Colorado? Well, I can give you some COVID related information.

Melissa Kuipers Blake: (53:09)
The pandemic has been very good for the cannabis industry here. When you tell people they can't leave their house, they buy alcohol and they buy cannabis. In June, I'm sorry, in May of this year, we had a record setting month at $149 million in sales. That was big news. Well, only to be followed by June, where we had $158 million in sales. And that's because cannabis is allowed to be delivered now as a condition of the pandemic in the shelter in place orders. Under a bill passed last year, you can deliver medical, but you couldn't deliver adult use, so we were able to find a way to have delivery for both.

Melissa Kuipers Blake: (53:43)
What does this mean overall? In the last six and a half years, the State of Colorado has collected $1.5 billion in sales tax, as a result of cannabis being legal. And those numbers are only going to continue. And of course that includes licensing fees and other things, but the majority of that is sales tax. To David's point, to states, and cities, and counties that are looking for revenue, yes, there is a cost of doing business. You've got to have money to set up the ultimate regulatory structure, but after that, you can find ways to pave your roads and to do a lot of things.

Melissa Kuipers Blake: (54:15)
Ironically, here in Colorado, the first 40 million of the cannabis dollars that come in every year go to capital construction for K-12 schools, and that was in our ballot measure. There's a lot of ways to dovetail these dollars, and to find ways to really fix the holes that cities, and counties, and states had before the pandemic, but certainly have now.

Jason Wilson: (54:34)
And every state obviously is taking a different approach, I mean, from seeing what's happening in Illinois versus California versus Florida, I mean, different types of markets from open markets, limited licensed markets. I mean, it sounds like it's been overall regardless of model, it's been a positive experience regardless of where we've had a legalization.

Jason Wilson: (54:58)
At this point, we should probably move to kind of, I guess, final thoughts, final remarks. What we want to do at the end of our voice of cannabis series was to give everyone an opportunity to have 60 seconds, maybe just give it his final thoughts on where the industry stands, how that ties in with the election, what we can expect in 2020, and 2021 going forward. I mean, from my perspective and maybe David, you can lead off, but a lot of that will have to tie into kind of industry unity. I mean, there's no question that genie's out of the bottle.

Jason Wilson: (55:32)
And we have state by state legalization, sounds like we're going to be quite possibly 40 states, if we look at the ballot initiatives and then some legislative states that might legalized through a legislative process. Clearly there's a demand sales are growing in virtually every jurisdiction, the tax revenues are there, but I still look back at the Farm Bill and what people thought that that would do for the CBD/Hemp industry. And it's going back a few weeks ago to where [Axle Bandy 00:56:07] was saying from New York. We still have all these interstate commerce issues, I mean, we don't have... There's this conflict between the DEA, USDA, FDA.

Jason Wilson: (56:19)
The industry together has to really figure out how to make proper regulatory change. So this does become a true industry. And so that's what we're hoping to see, legalization or decriminalization huge part of that. Outcome is going to determine how that happens, but I really feel like it's going to be up to the cannabis industry itself to have the biggest industry partners really make sure that we get regulation in place to make this truly scalable, while addressing all the social justice issues.

Jason Wilson: (56:54)
That's what I'm excited to see, is that how we can solve, check all these boxes, and make this work. David, why don't we take it over to you, maybe we can follow up with Eric, Patrick, and then Melissa, if you don't mind wrapping up the close out. And we're not going to have QA today, so I'll just leave it to you for you to give us your final 60 seconds, or so each. Thanks again, everyone for joining us, and thanks to our panelists here. I'll turn it over to you, David.

David Culver: (57:23)
Thank you, Jason. Well, first and foremost, I just wanted to thank Melissa for joining us. You were an excellent panelist, and we certainly hope that you will join us again at some point in the future. But thank you so much for being with us today. Jason, look, I may be the most boring commentary on this particular wrap-up session, but I'm going to beat the same drum I always beat. And you summed it up quite nicely.

David Culver: (57:46)
Which is number one, we must be unified as an industry going into 2021. We have got to find alliance amongst everybody that's out there so that we can march and lock step to get something done. I spent 16 years in beverage alcohol industry, when we were not aligned as an industry, we failed period. When we were aligned, we won and there was some really major pieces of legislation in the states and also in the federal level that we were able to accomplish as a result of that unity, that's number one.

David Culver: (58:17)
Number two, to the regulatory structure, again, we've got to get figured out on the federal level. If we in advance of legalization, in advance of cannabis being de-scheduled, what does that regulatory structure look like, and what is specific to cannabis? What models specific to cannabis that actually works? All of the big brains in the cannabis space are working on this right now, including those folks that are on this panel right now, and leaders on the Hill.

David Culver: (58:43)
But we've got to get that right going into 2021, otherwise, it's going to be a mess when we do legalize, and like my good friends in the beverage alcohol industry, we're going to spend the rest of our careers, cleaning up a mess that we made prior to legalization. Those are my two comments, and thanks so much again to you, and your team, and the folks from SALT for having me today.

Jason Wilson: (59:08)
Thanks David, it's been absolute pleasure working with you throughout this series. Eric.

Erik Huey: (59:17)
I've got two messages, one to voters, and one to policy makers. The message to voters is vote. You must get out and vote if you care about this issue. In conjunction with other issues that are important to you, you've got to make your voice heard. We're getting up to the point where you can mail on your ballots, but go down and vote in person where you've got early voting vote. Vote only in-Person where on election day you have to vote. This is exceedingly important generally, but particularly as it relates to this industry.

Erik Huey: (59:47)
And then my message to policy is, a friend and weed is a friend indeed, which is to say, this is a political winner, whether you're a Republican or a Democrat, cannabis is going to be good for your district in terms of jobs and economic development. It's time to put away the vestiges on both sides of the aisle, and embrace the fact that we're past the tipping point, and we are here. This is the future, it's time to catch up.

Jason Wilson: (01:00:18)
Awesome. Thanks Eric. Thanks a ton, Patrick, are you back?

Patrick Martin: (01:00:23)
I'm here and my final sort of thought on all of this is trying to look ahead to what happens after the election. And one of the scenarios we discussed which is if it turns out that it's a great democratic year and Democrats end up in control of everything, there is going to be a view, I think amongst the activist community on among voters, that there is going to be sweeping immediate change on cannabis.

Patrick Martin: (01:00:51)
And I think all of us who have spent time working in government and politics knows, that it almost never works that way. And that there is going to be some time that is going to have to go by before we start to see the change that I know all of us want to see. You're going to have a new Congress and president potentially have the same party dealing with responding to the pandemic.

Patrick Martin: (01:01:16)
It's very possible that the US Supreme Court strikes down the Affordable Care Act in which they would ask to be a massive legislative response to shore up the nation's healthcare system. And while I think that you will see positive movement on cannabis, it's not going to be like a light switch on day one if Democrats control Washington.

Patrick Martin: (01:01:34)
And so I would urge all of those who care about this issue to make your voices heard, to continue to push elected officials to act, and to be responsive, but to also understand that governing sometimes doesn't happen as quickly as we would all like. But hopefully through the work of David, and others in the industry that will result in a thoughtful approach to legalization, and a federal regulatory structure that works not just for all of us right now, but for generations to come.

Jason Wilson: (01:02:04)
Now, fully agreed and well said, it's definitely not going to be a light switch. This is just the beginning of a very fun kind of time with lots of change to happen. We'll wrap it up with Melissa again. Again, thanks Melissa, I know we got you on here in short notice, but it's been really great to hear what you have to say and get your perspective. So we'd love to hear your wrap up.

Melissa Kuipers Blake: (01:02:27)
It's been my pleasure, Jason, and thank you so much to you, and SALT, and David for the invitation. A couple of thoughts, I mean, we've talked about how cannabis is here to stay. And I think this is no longer a flash in the pan that certain states have legalized. This is definitely coming and it's coming right for Washington.

Melissa Kuipers Blake: (01:02:42)
And Washington is going to have to figure out how to talk about cannabis, particularly members who don't like it, don't know how to talk about it, don't have it in their state, which is where we as lobbyists and we as companies can come in as that resource and say, "You don't have to like it, we just have to help you understand it." And there's a huge educational point that has been happening. I can tell you even five years ago, I would call certain members, moderate Republicans who wouldn't even give me a meeting on cannabis, now they're calling me asking for a briefing for the staff.

Melissa Kuipers Blake: (01:03:08)
Things have changed, they want to be educated, they want to understand, they're all caveat with, I don't want to be the lead, but I do want to know how to talk about it, and I do want to know where this ship is going. I think we are very much at that tipping point and certainly what happens in the next week in the election will inform that. It's not just about cannabis though, it's about other industries that are looking at cannabis, and wondering what it means for them, including alcohol, including tobacco, including pharmaceutical, including pharmacies who might be interested in dispensing medical marijuana products.

Melissa Kuipers Blake: (01:03:37)
I can't tell you how many phone calls I've gotten over the last seven to 10 years saying, "Hey, can you fill me in on what you know about cannabis? Where's the industry going for my other particular industry that these folks are talking about?" This is a big deal, I think the world is watching, it's very exciting, I've never worked on a public policy issue as dynamic and exciting as cannabis legalization. And it's going to be here for a long time. Thank you so much again for having me, and I really appreciated everyone's time, and my very talented panelists today.

Jason Wilson: (01:04:06)
Awesome. Thanks Melissa, and thanks SALT, and thanks everyone for joining us today. We look forward to seeing what the election, the end of 2020 and 2021 brings. Thanks again.