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Transcript: The Path Forward: The American Dream with David M. Rubenstein

MR. IGNATIUS: Welcome to Washington Post Live. I’m David Ignatius, a columnist for The Post. Today in our continuing series “The Path Forward,” our guest is David Rubenstein, the co-founder of the Carlyle Group, a great private equity firm here in Washington. He’s now a television interviewer, a historian as in his new book, a philanthropist, and as the Greeks like to say, a polymath--somebody who knows a lot about a lot of different things. David, welcome. Thanks for joining us today.

MR. RUBENSTEIN: My pleasure. Thank you for having me, David.

MR. IGNATIUS: So we’re going to be talking about your new book, "The American Experiment: Dialogues on a Dream." But I also want to ask, after we talk about the book for a bit, some--forgive me--I’m going to call them David Rubenstein questions of the sort that you ask guests on your Bloomberg TV show about yourself, which I think will be fun for our viewers.

But let’s start with the book. The book is a collection of interviews by you of some extraordinary people--historians like Drew Faust, Jon Meacham, David McCullough, Ken Burns--just a long and extraordinary list--Jazz trumpeter Wynton Marsalis, sport figures like Billie Jean King and Cal Ripken Jr. But in sum, the book is a very upbeat account of America and the American dream. And I want to ask you whether you’re as optimistic yourself about where this story is going as the people you interview in the book generally are. Do you have that sense of confidence that this story is heading in the right direction and that we’re going to get through this difficult period successfully?

MR. RUBENSTEIN: Well, as you know, every period of time seems difficult to those who are living through it. We’ve rarely had 20-year periods of time where everybody says this is wonderful and we have no challenges. There’s always challenges. Clearly, we have challenges now. And I’m not saying that they’re going to go away easily. But I am an optimist. And I guess if you’re an entrepreneur, you’re somebody that came from modest circumstances and you did the things that I’ve been able to do with a lot of good luck, you tend to be an optimist. So I am optimistic, but I am not--as you probably know from reading the introduction of the book, I’m not saying that we have a lot of these problems solved. We have some real problems. And we came very close to a dangerous situation, I would say, after the last presidential election because of the contesting of the election, the legal challenges. This country went through what I called a stress test. And while it wasn’t the most significant stress test we’ve ever had--that being the Civil War--it was a significant stress test, and it did stress our democracy, and there’s no doubt about it.

MR. IGNATIUS: You write in that introduction, David, that there’s some U.S. genes, part of our genetic coding as a society, that have protected us--democracy, the rule of law, immigration. You have a list of a dozen or so factors that have made us strong. You’re in the business of assessing risk in your life as a businessperson. What’s the risk that our genes will not prove strong enough as the virus that’s around us, the virus that’s weakening our political culture gets stronger? How would you assess that?

MR. RUBENSTEIN: Well, we just went through a very--two difficult stress tests, which is, one is the coronavirus stress test, which really impacted our healthcare system and our economy; and the election and the effects of the election. We survived that reasonably well. We still are dealing with the coronavirus effect as well, of course. I would say the country has survived many challenges. I am worried that the country is divided politically, and we can’t get a lot of things done through our government. I am concerned that many people are disappointed about where the future of the country is headed. There’s no doubt that we have those challenges. But on the whole, I do think that the genes in this country which has made us so strong over the years will pull us through. But I do worry that we have some issues that we’ve got to resolve, and I do hope that our political system would work slightly better than it does now. It’s a little bit sclerotic in many cases and doesn’t really get things done as effectively and as efficiently as I think it should be the case.

MR. IGNATIUS: And let’s talk about our economic life. You’re a successful capitalist, as I know. But there are many people in the Democratic Party and some people in the Republican Party too who just think that the distribution of rewards in our society is just badly skewed and who think fundamental changes are needed. I want to ask you whether you agree with that, whether you think we’re in a period now where we really need to change some of the fundamental distributions, if not mechanics of our system.

MR. RUBENSTEIN: Well, there’s no doubt that income inequality and social mobility are not where they should be. And in fact, I think the coronavirus and COVID-19 made it worse. And I’m very afraid that people that don’t have internet access or don’t have kind of educations that you and I have, have fallen into what I call a COVID ditch, and they’re not going to get out of that ditch that readily. And as a result, the problems that we had before the COVID-19 crisis have been exacerbated. And there’s no doubt that wealth inequality is one of those problems.

If I had the solution for that, I would have gone to Iowa and New Hampshire and contested something. I don’t have the solution for that. And nobody really has the solution for that. Obviously, I haven’t heard anybody come up with a perfect solution for it.

I do think that one of the problems is education. Clearly the K-12 education system in this country is not where the higher education system is. And let me just point out one or two statistics. Right now, about 14 percent of the population in this country--adult population--is functionally illiterate, which means they can’t read past the fourth-grade level. If you can’t read past the fourth-grade level, you have very little chance of succeeding in society and having an economically successful life. Right now, 80 percent of the people in our juvenile delinquency system and two-thirds of the federal prison system is really composed of people who are functionally illiterate.

So until you change that system, you’re not going to be able to abide tax laws or other kinds of economic redistributions change the system. You’ve got to do things that are more fundamental. But of course, you can always change the tax laws a bit. You can always tax the wealthy a bit more. But I don’t think that’s going to change the system dramatically. You have to get people educated and get people to believe that if they work hard, they can get to the top.

The American dream, which is something I talk about--and it’s part of our culture--is ironically something that immigrants believe in more now than people born in this country. In other words, you have immigrants coming here that believe that if they come here, they can build a company or they can be successful and have a very good family life, whereas many of the people at the bottom of our economic strata don’t believe that as much as they used to.

MR. IGNATIUS: So just to jump in with a quick question, you mentioned going to Iowa and New Hampshire. Have you ever thought about running for president?

MR. RUBENSTEIN: No. I was just being facetious. I don’t think anybody who’s been in the private equity world is going to be elected to anything any time soon. We’ve seen people in private equity run for things, and obviously it’s challenging to do that. But, no, I don’t have the charisma, the good looks, the charm, and all of the other attributes that a politician should have. So I learned very early on in life that I’d be better to be an advisor to somebody or stay in the background. But my point really is that if somebody really had the solution to solving income inequality, please step forward. I haven’t seen that solution. And I do think that we’ve got to do something about income inequality and social mobility, which is a different part of income inequality. It’s the ability of moving up. I came from modest circumstances and moved up in society, and I don’t know that many people today feel that they can do that as readily as I thought I could when I was growing up in the 1950s and 60s.

MR. IGNATIUS: Let’s talk a little bit about your youth in Baltimore. You’ve written that your dad was a postal clerk, never made more than $8,000 a year. I think you’ve written your mom was a homemaker. You said in an interview that growing up in a wealthy family unlike you is a big disadvantage. It’s a big advantage to grow up in a family without a lot of money. You have the unconditional love of two parents, it’s a big advantage. I want you to explain that, why people with great wealth sometimes are burdened and why somebody like you growing up in more modest circumstances in a way has a less encumbered path.

MR. RUBENSTEIN: Obviously, when I say that, it’s designed to get somebody’s attention, because of course if you grow up in poverty, it’s not as good as growing up in a wealthy setting. But my point is designed to say if you grow up in a setting of the type I did and you have parents who are supporting of you, you can rise up in our society, generally. Obviously, there’s some discrimination factors, and it’s maybe harder than it was when I was growing up. But when you grow up in a wealthy family, a very wealthy family, you obviously have some advantages but you have some disadvantages. If you succeed, people will say, well, you only got there because of your father or mother. You also have temptation to do things that may not be appropriate. There are drug and alcohol abuses and other kinds of problems you often see in wealthy families. So, sure, it’s better to be growing up in a wealthy family, I suspect, than a poor family, but it’s not without some burdens.

And as I would say, the greatest challenge in life is raising children that are happy and healthy and successful. A greater challenge is raising children who are happy and healthy and successful when you have a lot of money, because you tend to spoil them. They don’t have the drive that you might have if you grow up in a poor family. So my point is really designed to get people’s attention. It’s obviously not the same as saying that I’d rather grow up in a poverty-stricken family than a middle-income or wealthy family, but it’s not without it’s burdens if you grow up in a wealthy family. There’s no doubt. And you and I know a lot of people who’ve grown up in wealthy families who didn’t amount to very much because they were spoiled.

MR. IGNATIUS: That’s a truth about America, about life. Now I’m curious, David, when you were growing up, whether you thought of America by the traditional phase a melting pot, where people from all these different cultures--your family was Jewish. Down the street or a few blocks away you had African Americans, Italians. Did you think of America as a melting pot back then? There are different terms now. People say the melting pot’s wrong. Really, we’re more like a salad. The carrots don’t mix with the tomatoes and the lettuce. You know, we’re all there in our separate descriptions. How do you think about that way in which we come together to form a common culture?

MR. RUBENSTEIN: Well, when this country was started, anybody could show up. You didn’t need passports or visas. And everybody who was showing up generally was from Western Europe. When people from Eastern Europe, from Southern Europe who were people who were often Jewish, or people from Asia started showing up, people said, well, we don’t want that kind of melting pot. We want a melting pot of Western European people. We need more British. So they imposed some constraints on ability to immigrate in this country in the early part of the 20th century. And for some 40 years or so, we really had constraints on what kind of people could get into this country. And we saw the effects of that in World War II when people who were Jewish were really turned away from this country despite the fact that they were going to go back to the Holocaust. In many cases people died who were turned away from this country.

So we’ve changed the laws. Under President Kennedy, then President Johnson, we began an effort that changed the immigration laws. They’re better than they were before. Not perfect. I do think that we are a bit of a melting pot in this country. People immigrate from all over the world. There’s no other country that has as many people from all over the world as we do. We have 46 million people in this country who are immigrants and 40 million who are children of immigrants in this country--a higher percentage than any other country in the world. I do think it’s a bit of a melting pot.

On the other hand, when I was growing up, I was living in a Jewish ghetto a bit, because where I grew up in Baltimore, people who were Jewish could only buy homes in certain areas because mortgages forbade you to sell a home to somebody who was Black or Jewish. So I grew up in an all-Jewish neighborhood, and I didn’t really know people who weren’t Jewish until I got to be 13 or 14. And so it was not quite the melting pot then. When I went to a public high school, that was a city-wide high school, I then saw the melting pot for the first time.

MR. IGNATIUS: So people often say, David, that this society where we prize education, we work hard, the old class barriers that kept people out of great universities, great firms like Carlyle Group are mostly gone. We describe this as a meritocracy, where people’s intrinsic merit, their knowledge, skills, adaptability rise to the top. But sometimes people say that this meritocracy can be as intolerant as the old aristocracy was, as rigid, as difficult to enter. I’m curious again what your thoughts are about the society that we ended up creating and living in, where merit is so prized.

MR. RUBENSTEIN: Well, I think that society does have a gene that really merits and welcomes people who are qualified for the job that they have. But obviously that’s in the eye of the beholder. There’s no doubt that sometimes if you know the right person, you have an advantage. There’s no doubt that sometimes your background might be an advantage under affirmative action or diversity, or not. Either way, it sometimes is an advantage. But on the whole, I think this country is a beacon to the rest of the world for the idea that if you are intellectually good, you’re hardworking, you have the ability to build something or try to build something, you can get ahead in this society. In other countries, there’s not a similar view. Many times, you have countries like England where there’s a class structure where it’s very difficult to rise from the bottom to the top. And that’s true in other countries as well.

So we’re not perfect. I think merit is good. It does have its downsides, in that sometimes, you know, you might not be good on an SAT-type test but you might have other skills, and sometimes we look at numbers unduly. But on the whole, I think that this country’s focus on merit has enabled us to get ahead in the world. Think about it. We are still a country which is, in effect, the most powerful country in the world 200-plus years after we were formed. Very rarely do civilizations dominate the world in quite the way we have for such a long period of time.

MR. IGNATIUS: You’re right. I was also reminded this week that we’re still a relatively young country, which is a blessing.

So I want to shift now to the fun part, which is where I’m going to ask you some questions that are like those that you wonderfully throw at guests on your Bloomberg TV show and in interviews I’ve seen you do at other gatherings. So let me just take literally the questions you’ve asked some of your guests and put them to you.

I want to start with Amazon founder, Washington Post owner Jeff Bezos. You asked Jeff--and I quote here--“When you’re the richest man in the world, you go into a store, when you want to buy something, do you have to put a credit card down. Do you just say I’m Jeff Bezos and they send you the stuff?” How do you do that? Do you carry--do you carry cash around, or you carry something? So, David Rubenstein, what have you got in your wallet? What are--what do you pay for stuff with?

MR. RUBENSTEIN: Well, I’m not in Jeff Bezos’ category, obviously. But I do have--basically I carry some cash for tips. Basically, I found that if you have cash, it can be very helpful for tips. So usually I have credit cards, and I put them down. And sometimes they work, sometimes they don’t. As Jeff said, when he gets one that’s turned down, he gives them another one, and sometimes I have to do that as well. But I generally carry around enough cash to be able to get through and various tips that I might want to give to people who help me with things.

MR. IGNATIUS: So Jeff Bezos bought The Washington Post as we--as we all know. It’s said--and I think it’s been written--that you passed on the chance to buy The Post. And I want to ask you, is that true, as has been said? And if so, why? Why did you pass on the opportunity to buy the newspaper?

MR. RUBENSTEIN: Don Graham had breakfast with me, and he told me he was interested in selling The Post, that he had approached two other people who had said they were not interested. So I wasn’t the first choice. And it was a deal which at the time the way he proposed it was, you buy The Post, some online company that The Post owned a stake in, an online advertising company, and also the real estate of The Post. And the price was, I thought, pretty high.

At the time, The Post had some real challenges. And so when I consulted with people who knew a lot about business and the newspaper business, they said this was going to be a fool’s errand and I would spend all my time basically laying people off and it was basically a way to lose a lot of money. At the time, I didn’t realize that the online company was worth probably twice what Don said it was. The real estate was probably worth twice what Don thought it was. And so in the end, had I bought it, I would have been able to sell the online company and the real estate for the total purchase price of the entire package, and the newspaper would have come for free.

That said, Jeff Bezos is obviously a richer person, smarter than I am, more technologically savvy. He did a great job. And I think The Post is in terrific shape today. But had I bought it, I don’t think it would be as good shape. So The Post is better off not to have me have made that mistake. But I do regret it, because it would have been fun to own The Post. But, you know, maybe in my next life.

MR. IGNATIUS: Well, we’ll look forward to that. There are other newspapers around, David, that need good owners. So in an interview with Dara Khosrowshahi, who is the CEO of Uber, you said that you had never ridden in an Uber, and Dara gave you a gift certificate. And I want to ask you, have you used it? Have you ridden in an Uber yet?

MR. RUBENSTEIN: I’ve ridden in Ubers other people have got for me, but I had never used it myself. And actually, my team got me an Uber software thing, and I have it on my phone. And one time the car that was supposed to pick me up didn’t show up, and I had to show up for a TV interview, and I panicked a bit. And so all of a sudden somebody said, well, use your Uber, and I pushed a bunch of buttons and sure enough, a car showed up and it worked. So actually, it’s a great invention, and I wish I had been an early investor in it. One of my friends was an early investor in Uber, and I told him I didn’t think it was going to get anywhere, and that was a big mistake. But, yes, Uber works quite well. And I haven’t used it as much as I should, but now that you remind me about it, I probably should use my button more and press it more.

MR. IGNATIUS: I’ll bet Dara is going to send you more coupons. You asked Dan Gilbert, who is the head of Quicken Loans, owns the Cleveland Cavaliers, has done an amazing job of revitalizing Detroit, the following question. He said--so let me ask you. As I mentioned earlier, you’ve succeeded in everything you’ve done, that you’ve more or less touched, and it’s pretty impressive. So have you ever failed at anything? And let me ask that of you. What’s your biggest mistake as you look back?

MR. RUBENSTEIN: I have so many mistakes, I don’t know where to begin. But I would say, in the end, I wish I had been better in advising President Carter when I was in the White House. I probably didn’t do as good a job in that, and we obviously didn’t get reelected. I wish I had started Carlyle earlier than I did. I wish I had not made some of the investments we did. I wish I had made some investments that I didn’t make. So on the whole, though, I’m reasonably happy with where I am. And the thing that I’m, you know, most proud of, I guess, is that my parents lived to see me come from where I came from to where I later became. And in the end, all of our--everybody’s greatest legacy is their children. And so I have three children, all of whom are in the highest calling of mankind, private equity. So what more could anybody want?

MR. IGNATIUS: The--that’s a wonderful answer and affirming your life choice. You asked Larry Merlo, who was the CEO of CVS, okay, what would you like your legacy to be? In other words, when you eventually step down in 25 years, or whenever that might be, what would you like people to say? Would you like people to say he was the greatest builder of drugstore companies ever, or what would you like them to say? And I put that to you. What would you like people to say about David Rubenstein?

MR. RUBENSTEIN: Well, that he did a good job in trying to give back to the country that made it very possible for him to rise up from very modest circumstances. So a lot of my philanthropy, David, as you know, has been trying to give back to the country through what I’ve called patriotic philanthropy, fixing monuments, memorials, or preserving documents, or things like that, or serving on boards that are national institutions like the Smithsonian or Kennedy Center, National Gallery of Art. So probably that is what I suspect will be the case. But you would know better than I. I assume somebody’s written an obituary for me already, and it probably will start by saying here’s a man who helped save the pandas. And I suspect that will probably be what the lead of the obituary will be. I don’t really know.

But in any event, I’m very pleased with where I am today. But I am driven to kind of keep doing more. And when you reach a certain age--I’m now 72 years old--an age that I thought was very old when I was younger--I now think it’s, you know, middle age--when Ronald Reagan was 69 running against Jimmy Carter, I said, President Carter, Ronald Reagan is so old, you won’t have to worry about it. He can’t get out of bed in the morning at 69. Now 72 doesn’t seem so old. So I wanted to, you know, keep what I call sprinting to the finish line. None of us really know when our brain or our body is going to give out. Sadly, some people younger me, my friends died, some people die at very young ages. I don’t--you don’t know when your time is up. So what I’m trying to do is accelerate the things I want to get done--the philanthropy, the investments, the things with my children--and I try to get them done because you just don’t know when bad luck could come along. So I’m really driven to kind of get things done before something falls apart with my brain or my body.

MR. IGNATIUS: You mentioned some of these great philanthropy projects, and they are extraordinary. The pandas at the National Zoo, helping fix the Washington Monument after an earthquake, buying the Magna Carta and permanently lending it to the National Archives is pretty good. I’m just curious whether you got another big philanthropy project in mind in this period, where, as you say, time is fleeting. You want to make sure you accomplish what you can. What’s on your agenda?

MR. RUBENSTEIN: Well, I have a couple of things but I’m not quite ready to announce on them. But one of the things I’m focused on is increasing the knowledge that people have of our country’s history and our civics. As you probably know from reading the book, it turns out that 91 percent of the people who are applicants for citizenship in this country pass the basic citizenship test that you have, which is basically 10 questions. You have to get six of them correct out of the 10. The same test or similar test was given to citizens born in this country. And of the citizens born in this country, only a majority of them in one state, Vermont, was able to pass that test.

In other words, in 49 out of 50 states, a majority of citizens couldn’t pass the equivalent of the basic citizenship test. That means that people don’t really know much about history and civics. And the theory of representative democracy is that you have an informed citizenry, and if you have an informed citizenry, you’ll have a better government. So one of the things that I’m going to focus on is to get people better informed about our country’s background and civics. And I’m not the only person doing this, obviously. Many people are doing it. But I hope to increase my efforts in that regard.

MR. IGNATIUS: So I’m going to sneak in one last question because we’re running out of time. You worked in the White House of Jimmy Carter. You were a senior person famous for working hard. Carter is somebody who we recognize as a decent, extraordinarily fine person, but in some ways a flawed president. I want to ask you, based on your political experience, how you’d evaluate the job that Joe Biden is doing so far as president and what advice or thoughts you’d offer, based on your White House experience, your experience as a writer and historian, somebody who looks at and thinks about America. Give us a brief, kind of capsule bit of advice that you think this president might consider.

MR. RUBENSTEIN: Well, when you look at great presidents, you often recognize that they had majorities in the House and the Senate working with them. So when President Johnson got his legislation through, or even President Carter--while he didn’t get everything through, he had Democratic majorities that were pretty considerable in the House and the Senate, and so did Lyndon Johnson and other presidents who succeeded. Ronald Reagan had majorities in some parts of the House and some parts of the Senate when he was the president. Joe Biden doesn’t really have a big working majority in either the House or the Senate. While the House and the Senate are Democratic, they’re barely able to say they’re Democratic because the votes are so close. So it’s very difficult to get a lot of things done.

But I would say my advice--not that Joe Biden needs my advice--is to pace yourself. You’re not going to get everything done in the first hundred days. And in the end, explaining people--explaining things that you want to do to the American people as succinctly as possible and asking for their help is the best thing that he can do. But pace yourself. He’s got a long way to go. And I do think that trying to do something to bring both sides together--which he’s trying to do, but it’s been hard--is the best thing that he can do.

If he does not control the Congress in the second part of his first term--if he has a second term--the first--the second two years--if he loses control of the House and Senate, it’s going to be very difficult to get anything done then. So I think he needs to get some things done now and do the best he can to control the Democratic majority in the House and Senate if he’s going to get things done the latter two years of this first term.

MR. IGNATIUS: Good advice. I want to say billion-dollar advice from our guest David Rubenstein. David, thank you for a fascinating tour of your new book. Folks, this is "The American Experiment," David Rubenstein’s new book. Well worth reading. David, thank you for joining us today.

MR. RUBENSTEIN: Thank you, David. Thanks for the research you did. You obviously did a lot of research, and I appreciate it.

MR. IGNATIUS: So thanks for watching, everybody. To check out what interviews we have coming up on Washington Post Live, please head to to register and find out more information about all our upcoming programs. We’ll see you soon. Thanks for joining us.

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