The Exchanges

Q So in your book, you share, you share some vignettes about working with Trump and some really high stakes meetings with Xi Jinping with Angela Merkel. Can you tell us about a favorite story?

A Yeah. Well, one of my favorite stories is about president Xi from China. I knew China pretty well because over the years we had 18 different factories making different things at different companies in China. So I was in China 80 times before the Trump campaign, and I also got money from the various funds in China, so I felt I understood it pretty well. Anyhow, so the first big state visit was President Xi with a hundred-person delegation to Mar-a-Lago. Mar-a-Lago is in Palm Beach. It's the old Margaret Merriweather Post estate, When she died, she left it to the State Department. They didn't want to keep it because the upkeep was too much, so Trump finally bought it. And so here we are in this very, very luxurious setting, a meeting with Xi. The meeting was, a meeting was a dinner meeting. And it was scheduled to begin at six 30. About three o'clock that afternoon, I get a call at my house in Palm Beach. I was a member of the National Security Council in addition to commerce. So I got a call. We had an emergency National Security Council meeting at four o'clock. Naturally, they wouldn't say over an open phone what it was about. So we got there, and if you look in the pictures in the book, you'll see this little tiny crowded room with Trump, Mnuchin, myself, and a bunch of, small bunch of people, and that's where we decided To launch the 52 missiles into Syria to retaliate for th…

AI assessment note: “one of my favorite stories is about president Xi from China.”

Q That's, that's, that's status. You know, your, your sports was barksmanship. Is that true? I think you set a record in the, it's a hundred meter small bore in the Olympic trials.

A Yeah. Um, I had, as I had mentioned when I was a kid, I wasn't very good at baseball or basketball or football and things, but when I was 10 years old, my paternal grandfather, Took me to a recreation hall that had a bowling alley. He was an expert bowler, and they also had a shooting gallery. Well, I wasn't too interested in bowling. Ball was too damn heavy for me, but I was interested in shooting, and it turned out I had an aptitude for it. So, by the time I was 14, I won the New Jersey State Championship, and when I was 16, I set the U.S. record over the Olympic small bore rifle course, but that was also a strange learning experience. By then, Winchester was my sponsor, and they were trying to encourage me, take a year off from school, get ready for the Olympics, because they figured with another year or so of Just doing that and nothing else, it might get to be pretty good. So, they gave me a spotter. When you're shooting outdoors, particularly with . . Well, that makes a lot of demand on you to make sure you're counting the right number of rounds. So Winchester gave me a guy whose job was to spot and make sure I fired the right number. Well, when they announced the scores, and they said to my great pleasure that it was a new national record, it seemed like the score in prone, the simplest thing because you're lying on the ground, Seemed like the score prone was nine or 10 …

AI assessment note: “when I was 16, I set the U.S. record over the Olympic small bore”

Q So Mr. Mr. Secretary, I think there's a lot of amazing work you guys did with China and the regulatory state. Is there something you wish you had done differently? We're more bold about the administration had done differently.

A Um, yeah, there was, ah, it took us too long to understand what you had to do to fix things. Most of, most of all of us who were in the cabinet and most of the people in the White House had never been in federal government before. Well, it's a very complicated creature. You know, it's a lot, but obviously the largest employer in the country. And the voters in Washington D.C. vote about 94% left-wing. So you can imagine how hospitable they were to our administration. So it took us about a year to figure out what was going on and how you could fix it. If we had acted a little more rashly, a little faster, not made sure that we truly understood how it worked and just To go a little more adventurous, we would have accomplished a lot more, because that would be another year of reforms, another year of tax rollback, another year of regulatory rollback. So that's the thing I regret the most.

AI assessment note: “it took us too long to understand what you had to do to fix things.”

Q When you're dealing with a lot of these bankruptcies in these old industries, obviously people are blaming outside forces as opposed to themselves. It means they're not as good of a leader, ah, but, but were there also outside forces that caused a lot of these bankruptcies in some ways over time? Was, were there things with competition with China? Were there different rules we should have had in place?

A Well, one of the fundamental causes, and in fact, What got me really going on distressed securities was Mike Milken. Mike is now a pretty good friend, but when he was inventing deliberately junk bonds at Drexel, Burnham, and Lambert, you knew putting out that much highly leveraged debt would result in many more bankruptcies than before. And what Mike had been doing since he was basically advocate for the issuer, not so much for the security holder, he would go to one bondholder at a time, kind of pick them off, and gradually build up a consensus. We had a little different idea. Our idea was get the bondholders together, or in some cases the equity, band them together, Go to the company and Mike and say, you have to pay our advisors fees, but we're going to negotiate as a group, not get picked off one by one. That proved to be a very useful idea to them. And I'm pretty sure it helped their recoveries.

AI assessment note: “putting out that much highly leveraged debt would result in many more bankruptcies than before”

Q called you the king of bankruptcy. You restructured more than four hundred billion dollars worth of assets. And what that means is you went to industries like steel and coal and textiles, and you helped kind of resurrect these things. And obviously you went on to work on that for America as well, but how are you so successful in restructuring so many of these assets? What's the background there?

A Well, you'd be surprised at how similar all of the companies that went bad are. Generally, It's a result of either over expansion and or under capitalization. Unlike tech companies, the old, um, old economy companies tend to be very balance sheet heavy, and therefore they often tend to be a little leverage heavy. But the most important thing is once they've been under siege for a little while, they develop what I call a loser's mentality. You'll ask them, well, what, what's gone wrong with your business? And they'll always say, oh, it's the union, or it's the lawyers, or it's the politicians, or it's something else. It's inflation. They never talk about anything that's within their control that they could do something about fixing. And to me, that's a telltale sign that the guy who's headed for real trouble Because there are a lot of things you can't fix, but if you don't focus on the ones you can fix, you're gonna be lost.

AI assessment note: “you'd be surprised at how similar all of the companies that went bad are”

Q It's like converting out of Catholicism or something. So, so, so Mr. Secretary, one last question I want to ask you, travel the world advocating for, for our businesses, for our workers all around the world. And like, what do you see as the most important relationship for the U S next decade? And what gives you hope for America's role in the world going forward?

A Well, I think the biggest crisis that we have facing us, and it's not just later on, it's right now is education because our educational system by and large, Is failing to produce students that are qualified for the new world that we're going into. You know that technical world better than I do, but I was appalled to hear. Milken Institute sent me an interview they had done with the head of the school system in Los Angeles, and the reason they did an interview with them is he had abolished, prohibited the teaching of mathematics in high school. And they said, well, why? Why are you doing that? How can it make sense? Especially California has, used to have even more tech than they have now. But anyhow, he said, well, why are you doing that? And you know what the fellow's answer was? He said, teaching mathematics is a racist act. He said, a racist act? What do you mean? And so the fellow said, well, name me a black mathematician. That kind of reasoning is going to be death to this country. If we have to look at everything through a racial prism or a sexual orientation or something, we're losing our way. And if you look at the statistics, even in grammar school, the lower grades, we rank at best 30th in the world in reading, writing, and grammar school math. How are you going to stay the number one country in the world if you're 30th in the quality of education that your kids get?…

AI assessment note: “Well, I think the biggest crisis that we have facing us... is education”