Rubenstein notes that the economy tends to perform better when there is a divided government. He argues that a lot of CEOs, whether they admit it or not, would be happy with a Donald Trump presidency because he would cut taxes and regulation. With another Biden term, there would be likely more regulation but that, regardless of leadership, "business people are good at adapting. Just tell them what the rules are and they'll try to figure out how to deal with it."
On Trump potentially regaining the presidency, Rubenstein cautions his return could mean capital markets "living through some of the dysfunction" again if partisan gridlock stalls policymaking. Although, he stresses it's still "too early" to predict electoral outcomes definitively.
So putting a lot of that money to work in markets around the globe. David, thank you for being here.
But, you know, what the economy's statistics show is that the economy actually does the best when you have divided government. Now that wouldn't be logical, because the government is fighting with each other. But actually, if you go back over the last 50 years or so, the S&P 500 or the equivalent go up more when you have divided government. It's not easy to explain why that is, but maybe it's a checks and balance kind of thing.
If the President of the United States is Donald Trump, future, obviously, a lot of CEOs will be happy. They won't say so publicly, but he will probably reduce taxes, reduce regulation. If Joe Biden is elected president again, I think some business people would say we're going to have more regulation, very difficult to get antitrust approval for things. But in the end, you adapt the things.
What businesspeople are good at is adapting. Just tell them what the rules are, and they'll try to figure out how to deal with it. So it's often difficult to predict where the markets are going to go, because interest rates are going to drive it more than anything else. And that's pretty much apolitical.
BRIAN SOZZI: Are you surprised that Trump still has this support for another presidency in this country?
DAVID RUBENSTEIN: I am surprised. I-- the day after he lost the last election, I was on a television show. That morning, I said, I think he might run again, and people laughed at me. But the truth is he never gave up the idea of running again. He thinks he won the last time. He wants to prove that he deserves to be president again.
I'd say the most amazing story in American politics over the last 50 years or so, other than the fact that a Black man was elected president once or twice, Barack Obama, is that Donald Trump came from oblivion in terms of politics. He was elected president and now has a chance to be elected again after being nominated for the third time in a row by the Republican Party. No other Republican ever has been nominated three times in a row by his party.
JULIE HYMAN: Even though he is a Republican, obviously, he's not a very traditional Republican, right? We talked about the effect on the markets, and I think we think equity markets. What about capital markets, particularly globally? I mean, we've been told that European leaders for example are quite concerned about a Trump presidency. Is there going to be an effect on capital markets as well?
DAVID RUBENSTEIN: I am-- the Europeans never liked Donald Trump. I don't think they're going to like him if he comes back as president again. I think he has a lot of support in other parts of the world. I'm not his advocate, but I would say that some parts of the Middle East, he was pretty popular. I think he was reasonably popular in some parts of the Far East, Japan as an example.
But I just think markets will adapt. I think the biggest issue we're going to have to deal with if Trump is President again is just living through some of the dysfunction that government has with Congress, the Congress's inability to get things done. That's the biggest problem we have. It's not the president so much right now. But the Congress can't seem to pass appropriation bills or keep the government going, and that's a big problem.
BRIAN SOZZI: Is the business community prepared to work with him? Or will they fear being mentioned in one of his social media accounts and maybe they don't want to get entangled with the administration?
DAVID RUBENSTEIN: It's too early to say. Obviously, very few business people do not want to help the president of the United States when they're asked to do so. So if he asks them to do so, I suspect after-- if he wins, he'll probably win by an a margin sufficient such that people will say, I want to help the president of the United States, I want to help my country.
But it's too early to say. And remember, Joe Biden has a reasonably good chance of getting elected, too. Incumbents tend to get elected more than they get defeated. And he's got a reasonable chance, so it's too early to say. If you were to predict who the next president of the United States is going to be 10 months in advance. The last 10 presidential elections, you'd be wrong every time. You wouldn't have predicted 10 months in advance Barack Obama, Donald Trump. You just wouldn't have predicted it-- or Joe Biden 10 months in advance.
So it's just too early to say. We have to figure out what the health is of these candidates, what other geopolitical events take place that might hurt or help one of the candidates. It's just too early to say.
JULIE HYMAN: All right. David, I want to switch gears and this might be a tricky one, I don't know how much you can say. Are you going to own our Baltimore Orioles? What-- can you give us any kind of something on that?
DAVID RUBENSTEIN: Are you from Baltimore?
JULIE HYMAN: I'm from Baltimore.
DAVID RUBENSTEIN: There are some things I can't talk about yet. But I've read about that, but I just-- I don't know.
JULIE HYMAN: You read about that. OK, fair enough. We will stay tuned and hopefully, have you back to talk about that. Something else-- again, I don't know how much you can say about this. I know that you didn't go to Harvard, but you're involved with Harvard, particularly the Harvard Corporation, which is the parent--
DAVID RUBENSTEIN: I was one until July 1 of this year.
JULIE HYMAN: Right, exactly. What do you make of what's been going on, not just at Harvard, but in higher education more broadly? As you know, there's a lot of concern over, in particular, antisemitism and just sort of DEI initiatives on campuses. What do you think?
DAVID RUBENSTEIN: Well, what happens on university campuses reflects what goes on in the country generally. So it's not as if certain things happen only on university campuses, they're not happening elsewhere. Currently, I'm the chairman of the board of the University of Chicago. And we have a different policy than many other universities on public policy statements. We don't issue public policy statements on any issues. So we've dodged certain things that maybe other universities weren't able to dodge.
But we do have issues of making certain everybody has the right to speak and try to not have people prohibit other people from saying what they want to say within reason, obviously. You don't want to have people encouraging violence and things like that. But universities reflect the society that they're in. And so in the late 1960s, for example, we had a lot of protests against the Vietnam War. But that reflected what went on in society.
So right now you have a lot of concern about antisemitism in the United States as there should be. And that is reflected in sometimes in college campuses, too.
BRIAN SOZZI: Why do you think DEI initiatives have come under so much scrutiny? I think to the average person out there, this seems like good for business, and good for the country.
DAVID RUBENSTEIN: The United States in 1960 was a country that was essentially a white country. 90% of the people that voted in that 1960 election were white. 8% were Black. And the rest were other minorities. The country is different. And people who are white, maybe not educated or they feel globalization has passed them by, there's a lot of resentment towards affirmative action, DEI, things like that. And I think Donald Trump has played to that somewhat.
I think that there's a lot of concern about DEI in some circles. And maybe it went too far in certain areas. But I think it's probably going to tilt back. Nothing goes forever without making some changes. So I think DEI is a good thing. But in the end, some people have resented it. And some people feel that what the Supreme Court said about affirmative action in college admissions is probably something that should be reflected in other parts of society as well. In other words, not so much affirmative action. That isn't my view, but that's the view of many other people.
JULIE HYMAN: And just quickly to end here, you know, some folks in the financial world have said, I'm not going to hire someone who comes from this university, who's said this particular thing. Well, obviously, you have a lot of employees at Carlyle. How do you think about who are coming from elite universities? How do you think about that?
DAVID RUBENSTEIN: As a general rule of thumb, trying to penalize people for the rest of their life by what they might have said or not said while they were in college is probably not a good thing to do. So what did you do in college that you might not want people to know about?
BRIAN SOZZI: No comment.
DAVID RUBENSTEIN: Exactly. So everybody probably did something in college they were probably not proud of. And so I think you shouldn't penalize somebody for the rest of their life by something that happened in college that they might have done when they were relatively less mature than they are when they're going to be an employee.
JULIE HYMAN: David Rubenstein, thanks so much.
DAVID RUBENSTEIN: Thank you.
JULIE HYMAN: Good to see you.
