The Carlyle Group founder, whose clout in Washington dates to a stint in the Carter White House, discusses Obama and business, death and taxes
How well has Barack Obama handled the economy?
It's hard to say how he's done given what he inherited. The stimulus worked in the sense that it kept us from going into a deeper recession. However, in hindsight, it probably wasn't big enough. It was roughly $800 billion. If we had a little more stimulus, probably the economy would not be stalling a bit. One of the other factors is that we have $1.8 trillion on the balance sheet of U.S. companies. They're sitting on the sidelines.
Because they don't have confidence in the future of the U.S. economy?
It's because they're not sure what the regulatory situation is going to be, what the tax situation is going to be. I think they have some concerns about economic growth. The most important thing the President could do is get these business leaders to start spending, investing, and hiring again. And that requires a bit of a bully pulpit and some arm-twisting, perhaps. This is where he can really show great leadership, because he doesn't have financial tools himself anymore. The cash that's available is really in the private sector.
Carlyle has a lot of investments and companies. Are you encouraging them to invest to create new jobs?
We own about 260 companies around the world. We're investing again pretty heavily. We're buying companies we think can grow. Some situations are just not appropriate to make enormous additional expenditures, but some are.
You hear a groundswell of criticism of the President among people who voted for him in 2008. How serious is that discontent?
There's no doubt the President's popularity has gone down. And yes, he has lost support in the business community. He will have to get it back. Other Presidents have had the same problem. Remember, John Kennedy had a famous run-in with the head of U.S. Steel.
No member of the business community is in a significant position in the Administration.
In most Administrations you do have some people who have either served as a CEO of a major company or have been entrepreneurs or professional investors. When there is some reshaping of the Cabinet and White House staff—probably after the midterm elections—the Administration would do well to bring in some people with that kind of experience.
Should the Bush tax cuts be extended?
Right now, members of Congress, Democrats and Republicans, think it's very difficult to not increase taxes for those who have incomes at the level the President promised to protect because so much of the tax revenue comes from people who make $50,000 to $250,000 annually. You can't get enough revenue just by taxing people $250,000 and above. It just isn't realistic. And only taxing a certain part of society isn't fair. Right now, roughly 50 percent of Americans do not pay federal income tax. They do pay FICA taxes and Social Security taxes. I think it's very important that everybody pay something.
What's private equity's public image?
People who make a lot of money and don't pay their fair share of taxes and don't create as much value as we say we're creating. So we have to do a better job of explaining the jobs we've created, the companies we've made better.
Are you prepared—as Warren Buffett is—to see additional taxation for people who make over $250,000?
Bill and Melinda Gates and Buffett are asking people—and with a reported wealth of at least $2.5 billion, you would be on the list—to give at least 50 percent of their net worth to a philanthropy when they die.
Bill Gates did call me, and I agreed I would participate. Philanthropy is one of the great American inventions. When I turned 54, I read that a white male will, on average, die in 27 [more] years. So I realized I lived two-thirds of my life. What do most people say on their deathbed? They don't say, I wish I'd made more money. What they say is, I wish I'd spent more time with my family and done more for society or my community. So I'm now 60 years old. And I'm doing what I call sprinting to the finish. I'm very concerned that if I slow down and retire, my immune system will relax, and all of a sudden the germs will come in and I'll die at 61. I want to accomplish much more than I did in my previous 60 years because I now have the resources, the access, to do things I couldn't do before. I'm actually more heavily scheduled than I was before, and I love what I'm doing. If I got paid nothing, I'd probably still be doing it.