Citadel CEO Ken Griffin Sounds Off on Everything from Cryptocurrencies to President Trump
ERIK: MUCH OF OUR CONVERSATION IS GOING TO TURN ON POLITICS OR POLICY AND ONE WAY OR ANOTHER. EVERYONE HERE IN OUR AUDIENCE KNOWS THAT OVER THE YEARS YOU HAVE BECOME INCREASINGLY ACTIVE AND INVOLVED IN POLITICS AND POLICYMAKING, BOTH AS AN ADVISOR AND AS A FUNDER ON THE LOCAL STATE AND NATIONAL LEVEL. THINK IT MAKES SENSE, BECAUSE IT IS PROBABLY A QUESTION FOR EVERYONE HERE FOR ME TO ASK, BEFORE WE GET INTO THE DETAILS, DO YOU HAVE ANY POLITICAL AMBITIONS? [LAUGHTER] THAT IS THE --KENNETH: THAT IS THE OUTER FIELD QUESTION.
I HAVE THREE YOUNG CHILDREN AND A GREAT FULL-TIME JOB. I AM GOING TO STAY FOCUSED ON MY FAMILY AND MY WORK. I AM INVOLVED IN POLITICS BECAUSE REGRETFULLY THAT HAS BECOME SUCH AN IMPORTANT PART OF DAY-TO-DAY LIFE IN AMERICA.
ERIK: I HAVE BEEN INVOLVED IN SUPPORTING A VARIETY OF CHARITY CAUSES FOR A LONG TIME. IT IS HEARTBREAKING TO SEE HARD EARNED GAINS WIPED OUT WITH THE STROKE OF A PEN FROM A THOUGHTLESS POLITICIAN. I HAVE BECOME IN POLITICIAN -- POLITICS BECAUSE I'M TRYING TO PROTECT THE AMERICAN DREAM AND THE OPPORTUNITY THAT EVERYONE IN THIS COUNTRY SHOULD HAVE TO HAVE A GREAT LIFE, A GREAT EDUCATION, AND TO HAVE A LIFE WELL LIVED. [APPLAUSE] ERIK: AS YOU MAY IMAGINE, KEN AND I WILL RETURN TO POLITICS BUT I WANT TO TALK ABOUT THE PANDEMIC.
YOU HAVE BEEN DEEPLY INVOLVED IN THE FIGHT AGAINST COVID-19. YOU PERSONALLY LOBBIED THE TRUMP ADMINISTRATION AT THE HIGHEST LEVELS TO FUND VACCINE DEVELOPING BY PRE-PURCHASING DOSES AND MULTIPLE DRUG COMPANIES, AND YOU PULL LEVERS TO PUSH THE FDA TO SPEED APPROVAL OF COVID-19 TREATMENTS. HOW THE VIRUS WHEN ONLY 56% OF AMERICANS ARE FULLY VACCINATED? KENNETH: -- LET ME REFRAME THE QUESTION, THE GREAT PART OF WORKING WITH THE TRUMP ADMINISTRATION IS YOU COULD REASON WITH THE INDIVIDUALS WHO RAN OUR COUNTRY, AND WITH OPERATION WARP SPEED, IT WAS A VERY SIMPLE CONCEPT THAT SPENDING A FEW BILLION DOLLARS WITHOUT KNOWING WHICH VACCINES WERE GOING TO WORK, BUT TO START THE MANUFACTURING PROCESS BEFORE WE HAD FDA APPROVAL WOULD GREATLY COMPRESS TIME TO MARKET. SO IF WE HAD A VACCINE THAT WAS GOING TO BE SUCCESSFUL, WE COULD BRING THAT TO AMERICANS FAR FASTER THAN THE ALTERNATIVE. AND THAT WORKED BEAUTIFULLY.
THE UNITED STATES COME OUT OF THE GATE, HAD THE SUPPLY OF VACCINE THAT WAS UNPARALLELED IN THE REST OF THE LARGE COMPANIES AROUND THE WORLD. OPERATION WARP SPEED WAS A HOMERUN AND IT GOES BACK TO HAVING PEOPLE IN THE WHITE HOUSE, WHETHER IT WAS THE PRESIDENT OR JARED KUSHNER OR VICE PRESIDENT PENCE WHO ARE ABLE TO UNDERSTAND THE CONCEPT OF OPTION THEORY AND APPLY THAT TO SAVE AMERICAN LIVES. $9 BILLION WAS SPENT ON OPERATION WARP SPEED, HUNDREDS OF THOUSANDS OF LIVES WERE SAVED. IT WAS ONE OF THE GREAT ACCOMPLISHMENTS OF THE TRUMP ADMINISTRATION.
AND COMING UP WITH THE STRATEGY THAT IS SO IMPACTED OUR COUNTRY FOR THE BETTER. HAVING SAID THAT, ONE OF THE FRUSTRATIONS IS THAT VACCINATION RATES IN THE UNITED STATES HAVE PLATEAUED IN AN UNACCEPTABLY LOW LEVEL. IF YOU LOOK AT MY FIRM, WHERE WE HAVE ONE OF THE GREAT BIOTECH INVESTMENT TEAMS IN THE WORLD, WE ARE ABOUT 98% VACCINATED. OR YOU HAVE THE FACTS, HARD DATA , THE UNEQUIVOCAL SCIENTIFIC JUDGMENT TO MAKE A DECISION AND EDUCATE YOUR TEAM AROUND WHY YOU SHOULD BE VACCINATED, WE SAW A VOLUNTARY VACCINATION RATE, NOT MANDATED AT THE CITADEL, OF 90%.
I THINK WE HAVE FALLEN SHORT AS A COUNTRY IN COMMUNICATING TO THE POPULATION JUST HOW IMPORTANT THE VACCINES ARE TO CHANGE THE DESTINY OF THIS DISEASE IF YOU ARE INFECTED. ERIK: YOU HAVEN'T HAD TO IMPOSE A MANDATE AT THE CITADEL. WHAT ABOUT EVERYBODY ELSE? DO YOU BELIEVE IN VACCINE MANDATES? KENNETH: NOW THAT WE HAVE FDA APPROVAL, WE WILL FACE HARD DECISIONS AS A COMPANY AS TO WHETHER OR NOT WE VACCINATE PEOPLE MANDATORILY. IF YOU ARE IN HEALTH CARE IN NURSING HOMES AND IN OCCUPATIONS THAT YOU ARE GOING TO TOUCH THE LIVES OF OTHERS WHO MAY BE IMMUNOCOMPROMISED, OLDER IN YEARS, YOU ARE GOING TO HAVE TO BE VACCINATED. HOPEFULLY WE WILL GET AN FDA
APPROVAL, NOT JUST EMERGENCY USE AUTHORIZATION AND APPROVAL FOR CHILDREN WHICH WILL ALLOW US TO MANDATE VACCINES FOR SCHOOL-AGE CHILDREN, JUST AS WE DO FOR A NUMBER OF OTHER DISEASES. THIS SHOULD HELP TO REDUCE THE SERVICE AREA IN WHICH THE VIRUS CAN THRIVE AND REDUCE THE RISK OF MUTATIONS AND OTHER IMPACTS THAT GO WITH THE ENDEMIC NATURE OF THE DISEASE WE FACE TODAY. ERIK: THERE ARE PEOPLE IN THIS ROOM AND WATCHING LIVE AROUND THE WORLD WHO ARE STRUGGLING WITH GOVERNMENT LEADERS AND WHAT DECISIONS TO MAKE. SHOULD I MANDATE A VACCINE QUESTION MARK IN OTHER WORDS, NO JAB, NO JOB.
SHOULD PRIVATE EMPLOYERS HAVE THAT FREEDOM AND SHOULD GOVERNMENTS BE ABLE TO DO THAT? KENNETH: YOU NEED TO RESPECT PEOPLE'S RELIGIOUS RIGHT TO REFUSE A VACCINE. IT CANNOT BE AS A COUNTRY THAT EVERYONE HAS TO BE VACCINATED, BECAUSE WE AS A NATION HAVE A DEEP RESPECT FOR PEOPLE'S INDIVIDUAL AND THE JUST RIGHTS. HAVING PUT THAT ASIDE, WHERE PEOPLE ARE IN FREQUENT CONTACT WITH OTHERS AND IN PARTICULAR WITH OTHERS WHO WOULD BE GREATLY ADVERSELY IMPACTED BY THE DISEASE, I THINK THE ISSUE OF PUBLIC SAFETY DOMINANCE AND IT IS APPROPRIATE IN THOSE REALMS. I WOULD REALLY LIKE TO THINK AS A NATION THAT WE CAN USE AND SOMETIMES CELEBRITIES AND INFLUENCERS AND POLITICIANS AND BUSINESS LEADERS TO DRIVE HOME THE POINT THAT THE BEST DECISION YOU CAN MAKE TO PROTECT YOUR HEALTH, YOUR LOVED ONES HEALTH IS TO BE VACCINATED.
ONE OF MY FRIENDS RUNS THE SURGERY CENTER AND PEOPLE COME AND SIT WITH COVID AND DINO KNOW THE FIRST THING THEY ASK IS? -- AND DO YOU KNOW THE FIRST THING THEY ASK IS? CAN I GET VACCINATED. IT IS THE SINGLE MOST COMMON QUESTION FOR PEOPLE SICK WITH COVID WHO WALK INTO A MAJOR HOSPITAL IN THE UNITED STATES. YOU ARE TOO LATE. WE NEED TO GET PAST THE EDUCATION AND CONSPIRACY THEORIES THAT ARE REALLY UNDERMINING THE ACCEPTANCE OF THIS VACCINE AMONGST OUR BROADER POPULATION. ERIK:
BIG COMPANIES ACROSS THE COUNTRY HAVE PUSHED THE RETURN TO OFFICE BACK TO NOVEMBER AND DECEMBER AND IN SOME CASES INTO 2022. TALK TO ME ABOUT THE APPROACH YOU'VE TAKEN AT CITADEL AND CITADEL SECURITIES AND WHETHER YOU THINK IT'S A MODEL OTHERS SHOULD FOLLOW. KENNETH: YOU ASKED THE QUESTION EXACTLY RIGHT.
BIG COMPANIES HAVE PUSHED BACK THE RETURN TO WORK. SMALLER COMPANIES ARE BACK AT WORK. IN SOME SENSE, IT'S A PRETTY STRAIGHTFORWARD REASON. SMALL COMPANIES ARE ALWAYS ON THE EDGE OF THEIR OWN EXISTENCE.
THEY DON'T HAVE A BIG CONSUMER BRAND NAME. IF YOU ARE A SMALL BUSINESS, YOU ARE TRYING TO MAKE IT DAY TODAY AND WE TWEAK IN TRYING TO REALIZE YOUR DREAM AND MAKE YOUR BUSINESS SUCCESSFUL. THE PRODUCTIVITY HIT OF BEING IN A REMOTE ENVIRONMENT BY ZOOM, YOU'RE JUST NOT GOING TO BE SUCCESSFUL. WE SEE A VERY STARK DIFFERENCE IN THE RETURN TO OFFICE PROGRAMS BETWEEN SMALL AND MEDIUM ENTERPRISES AND THE LARGE, GLOBAL MULTINATIONALS.
AT THE CITADEL WHO HAVE BEEN 100% BACK TO WORK SINCE JUNE AND WE WERE AT 2% BACK TO WORK TO MOST OF THE PANDEMIC. THERE WAS THE INITIAL PHASE WHERE WE WERE SHUT DOWN LIKE THE REST OF THE COUNTRY. WE WERE FORTUNATELY ABLE TO LITERALLY FILL THE TRADING FLOOR IN FIVE DAYS AND WE BROUGHT 100 PEOPLE DOWN TO FLORIDA AND RAN A SUBSTANTIAL PART OF THE CAPITAL MARKETS FROM A HOTEL IN THE MIDDLE OF SOUTH FLORIDA. THAT IS A REAL CREDIT TO MY TEAM FOR THEIR ENGINEERING INGENUITY AND ABILITY TO GET THE JOB DONE. I REALLY APPRECIATE MY TEAM MEMBERS WHO MADE THAT HAPPEN. IT WAS INCREDIBLY IMPORTANT TO THE STRONG FUNCTION OF THE U.S. BARCLAYS AND FIXED INCOMES --
OF THE U.S. -- AND FIXED INCOMES. IF YOU ARE EARLY IN YOUR CAREER, YOU ARE MAKING A GRAVE MISTAKE NOT BEING BACK AT WORK. IT'S INCREDIBLY DIFFICULT TO HAVE THE MANAGERIAL EXPERIENCES AND INTERPERSONAL EXPERIENCES THAT YOU NEED TO HAVE A TAKE YOUR CAREER FORWARD IN A WORK REMOTELY ENVIRONMENT. WORK REMOTELY AS GOOD AT MAINTAINING THE STATUS QUO, BUT THE WORLD IS NOT STATIC. COMPETITIVE PRESSURES FROM AROUND THE WORLD WILL PUT AMERICAN BUSINESSES CONTINUALLY UNDER PRESSURE.
CHINESE HAVE BEEN BACK TO WORK FROM ALMOST THE START. THEY ARE EVOLVING AT A RAPID RATE OF INNOVATION. WE ARE IN MANY WAYS STUCK IN PATTERNS FROM 18 MONTHS AGO BECAUSE IT IS SO MUCH HARDER TO INNOVATE AND CREATE IN A REMOTE WORKING ENVIRONMENT. FOR THE YOUNGEST MEMBERS OF OUR
WORKFORCE, I AM GRAVELY CONCERNED THAT THE LOSS OF EARLY CAREER OPPORTUNITIES IS GOING TO COST US DEARLY OVER THE DECADES TO COME. THAT IS WHERE I THINK THE BIGGEST HIT IS GOING TO BE IN AMERICA, WORKING FROM HOME HAS A WORKING ON IT -- HAS IT ECONOMIC EFFECT. THE CEOS -- ERIK: THE CEOS I SPEAK WITH OUR STRUGGLING WITH ANOTHER GROUP AND THAT IS THE TOP PRODUCERS, THE SENIOR WORKERS WHO DO NOT WANT TO GO BACK TO THE OFFICE WHO ARE MUCH HAPPIER WORKING AT HOME IN THE HAMPTONS OR FROM PALM BEACH OR ASPEN. WHEN THEY DON'T GO BACK TO THE OFFICE, THE YOUNG PEOPLE WE TALKED ABOUT DRAGGING BACK IN DON'T GET THE APPRENTICESHIP YOU ARE EXACTLY RIGHT. AND LEADERSHIP MATTERS. THIS IS WHERE THE CEO BEING IN
THE OFFICE IS IMPORTANT. IT IS THE TONE FROM THE TOP THAT WE ARE GOING TO GET BACK TO WORK. I WISH THE PRESIDENT OF THE UNITED STATES WOULD MAKE THIS PART OF A KEYNOTE ADDRESS. IT IS TIME FOR AMERICA TO GET BACK TO WORK. [APPLAUSE] AND IN THE MEANTIME, THAT BURDEN OF RESPONSIBILITY FALLS ON CORPORATE LEADERSHIP AND CIVIC LEADERSHIP TO DO THE SAME THING, ABSOLUTELY. WHAT IS DISHEARTENING IS WHEN
YOU SEE SOME CORPORATE LEADERS LIKE JAMIE DIMON TRYING TO PUSH THE RETURN WORK MESSAGE, THE BLOWBACK FROM THE POPULAR PRESS. DO YOU THINK THAT IS WHY OTHER CEOS ARE NOT DOING IT? KEN: I KNOW IT. IF YOU TALK TO OTHER CEOS, THEY LIVE IN FEAR OF BEING PUBLICLY PERSECUTED FOR DELIVERING THE MESSAGE, IT IS TIME TO GO BACK TO WORK. ERIK: WHY SHOULDN'T THEY BE SCARED? KEN: THEY ARE SCARED. AND FROM A LEADERSHIP PERSPECTIVE IF THE PRESIDENT WERE TO ADDRESS THIS GRAVE CONCERN, I THINK AS A COUNTRY WE WOULD BE MUCH BETTER OFF. IN THE U.K., THE CIVIL SERVICE MESSAGE IS CUT AND DRY, IT IS TIME TO GET BACK TO WORK.
WE NEED THE SAME MESSAGE IN WASHINGTON. WE NEED FOR THE GOVERNMENT WORKERS, CORPORATE LEADERS. IT IS TIME TO GET BACK AT IT. ERIK: THERE IS A HUGE DIVIDE BETWEEN THE CAMP THAT THINKS THE ECONOMY STILL NEEDS MORE STIMULUS TO RECOVER FROM THE PANDEMIC AND THE OTHER CAMP THAT THINKS THE GOVERNMENT HAS DONE FAR TOO MUCH STIMULATING ALREADY. I THINK I KNOW WHAT YOU ARE GOING TO SAY, BUT WHAT CAMP ARE YOU IN? KEN: I WAS IN THE WHITE HOUSE IN MARCH 2020 AND PRESIDENT TRUMP PUT FORTH THE PROPOSAL FOR A TAX HOLIDAY ON SOCIAL SECURITY. AND I HAD TO POINT OUT TO THE PRESIDENT THE ISSUE WASN'T PEOPLE AT WORK, THE ISSUE WAS PEOPLE WHO COULD NOT WORK, THE WAITRESS, THE HOTEL STAFF MEMBER, PEOPLE IN THE TRAVEL INDUSTRY WHO LIKE A LIGHT SWITCH FLICKED AND THEY WERE OUT OF WORK.
WE ALL KNOW THE STATS OF THE REPORTS FROM POPULATION THAT HASN'T SAVINGS. IT IS NOT A PLEASANT PLACE TO BE TO DISAGREE WITH PRESIDENT TRUMP, BUT I HAD TO DRIVE HOME THE POINT THAT WE NEEDED TO GET CHECKS IN THE HANDS OF AMERICANS AS FAST AS WE POSSIBLY COULD WHO HAD LOST ANY ABILITY TO MAINTAIN THEIR BASIC NEEDS IN LIFE. THIS PANDEMIC WAS GOING TO WIPE OUT TENS AND MILLIONS OF HOUSEHOLDS THAT HAD NO SAVINGS AND NO PROSPECTS OF WORKING FOR AN UNKNOWN PERIOD OF TIME. I TAKE MY HAT OFF TO WASHINGTON MOVING QUICKLY ON THE FIRST STIMULUS PACKAGE. WHEN WE GOT THOSE CHECKS OUT THE DOOR AND WE PROTECTED PEOPLE'S ABILITY TO HAVE THE BASIC NEEDS OF LIFE ADDRESSED. THIS HAS GROWN AND GROWN OVER TIME TO A PLETHORA OF PROGRAMS AND YOU AND I BOTH KNOW OF THE NUMBER OF PEOPLE TODAY UNTIL RECENTLY WHO ARE MAKING MORE MONEY ON THE GOVERNMENT HANDOUTS THAN THEY WERE IN FULL-TIME EMPLOYMENT. THAT HAS CRIPPLED THE SUPPLY
CHAIN IN AMERICA. I WAS AT A RESTAURANT IN CHICAGO WITH ONE OF MY FRIENDS, WHO IS IN THE AUDIENCE, AND WE ORDERED DINNER AND THE OWNER CAME OUT AFTER AN HOUR, A HISPANIC MAN, AND YOU COULD FEEL THE EMOTIONAL ANGST. HE SAID, I AM SO SORRY THAT YOU ARE HAVING SUCH AN AWFUL EXPERIENCE.
WE HADN'T EVEN COMPLAINED, BUT HE JUST KNEW THAT THE THINGS WEREN'T RIGHT. THIS SHOULD BE A GREAT MOMENT FOR MY BUSINESS. I CAN'T HIRE PEOPLE AND I CAN'T KEEP PEOPLE. JUST THE ANGUISH IN HIS FACE WAS HEARTBREAKING. THAT IS WHAT SO MANY SMALL BUSINESSES ARE FACING TODAY IN AMERICA.
IT IS SO HARD TO FIND PEOPLE TO COME BACK TO WORK TO DO THE JOBS WE NEED TO HAVE DONE, WHETHER IT IS WORKING IN THE ENERGY INDUSTRY, DELIVERING PRODUCTS AND PACKAGES, BEING IN MANUFACTURING FACILITIES, WE ARE STRUGGLING. WE ARE STRUGGLING TO FIND PEOPLE TO DO JOBS. ERIK: HOW DOES THAT GET FIXED? IS IT A MATTER OF TURNING ON THE PHYSICAL AND MONITOR -- THE FISCAL AND MONETARY? KEN: FROM A CLASSIC ECONOMIC PERSPECTIVE THAT YOU WOULD KEEP SOME LEVEL OF GOVERNMENT SUPPORT IN PLACE TO HELP US GET BACK TO FULL EMPLOYMENT. SO YOUR MONETARY APPROACH IS THE GENERAL WAY TO DOING THAT, THE ULTRA LOW INTEREST RATES IN AMERICA AND VERY AGGRESSIVE ASSET PURCHASE PROGRAMS BEING RUN BY THE FED. THE PROBLEM IS THAT IN WASHINGTON, THE FISCAL POLICIES ARE DISINCENTIVIZE ING. WE ARE UNDERMINING ALL THE WORK
AT THE FED BY CREATING SO MANY INCENTIVES TO NOT WORK. THAT'S WHAT WE NEED TO CHANGE. WE NEED TO ALIGN THE FISCAL POLICIES WITH GO BACK TO WORK AND HERE IS WHY WITH THE MONETARY POLICIES THAT ARE EFFECTIVE AT ENCOURAGING CAPITAL FORMATION AND GROWTH. ERIK: JUST SO I AM CLEAR AND THERE ARE PEOPLE WOULD LIKE TO KNOW, MONETARY POLICY THAT THE FED HAS PURSUED AND IS PURSUING, YOU ARE FINE WITH. YOU ARE AWARE THERE ARE PEOPLE WHO THINK THEY SHOULD'VE TAPER ASSET PURCHASES LONG AGO IN THE NEXT MEETING IS FAR TOO LATE AND THAT WE SHOULD BE TALKING ABOUT THE PATH TO NORMALIZATION FOR INTEREST RATES. KEN: IT IS A JOB I WOULD BE SO HAPPY NOT TO HAVE.
I AM SO GRATEFUL I DON'T HAVE THAT JOB. IT IS A NO-WIN JOB RIGHT NOW. THE FED HAS A DUAL MANDATE OF PRICE STABILITY AND MANAGING TO HAVE IS AT FULL EMPLOYMENT. THAT IS THE ONLY MANDATE OF THE
FED, PRICE STABILITY AND FULL EMPLOYMENT. LET'S BE CLEAR, WE DON'T HAVE PRICE STABILITY. INFLATION OF 5% IS AMONGST THE HIGHEST NUMBERS THAT MANY IN THIS ROOM HAVE EVER SEEN IN THEIR LIFETIME.
AND THE BET IS THAT IT IS TRANSITORY AND THAT IS A BIG BET. THE FED IS IN A TOUGH BOX AND THE CHALLENGE IS THE FED HAS TO TAKE THE REGULATORY AND FISCAL POLICIES OF WASHINGTON AS A GIVEN. THEY CAN'T INFLUENCE THOSE POLICIES.
TO THE EXTENT THOSE POLICIES ARE WORKING AGAINST WITH THE FED IS TRYING TO ACCOMPLISH, THEY ARE REALLY IN NO MAN'S LAND IN TERMS OF A STRUGGLE. I INC. -- I THINK IF I AM CHAIRMAN POWELL, THEY ARE REALLY IN NO MAN'S LAND. I THINK IF I AM CHAIRMAN POWELL, I STATE THE COURSE WE ARE ON, AS UNNERVING AS IT IS, BECAUSE TO SEE INFLATION RUNNING THIS HAT IS REALLY UNSETTLING. THERE IS A FEAR THAT WE UNTANGLE INFLATION -- UNA NCHOR THAT, IT WILL UNQUESTIONABLY PLUNGE US INTO A RECESSION. ERIK: A HUGE RISK WHAT YOU THINK THE FED UNDER CHAIRMAN FALL SHOULD STATE THE COURSE? KEN: I THINK HE HAS TO STAY THE COURSE, GIVEN HIS DUAL MANDATE. IT IS NOT WHAT WE WOULD WANT TO DO, IT IS WHAT HE IS DIRECTED TO DUBAI MANDATE.
-- DIRECTED TO DO BY THAT MANDATE. ONCE WE CHANGED THE FED'S MANDATE TO SOMETHING MORE NEBULOUS, THE OPPORTUNITY FOR GOVERNMENT -- ERIK: THERE WAS A LOT OF TALK THAT THE FED HAD BECOME POLITICIZED. DO YOU THINK THE FED HAS BECOME SUFFICIENTLY DE-POLITICIZED? KEN: THE ONLY TIME I PUBLICLY SPOKE OUT AGAINST TRUMP WAS DEFENDING JAY POWELL. I THINK TRUMP'S EFFORTS TO CONTROL THE FED WERE IMPROPER.
WE NEED TO MAINTAIN THE BELIEF IN THE SEPARATION OF THE FED FROM THE WHIMS OF WASHINGTON TO MAINTAIN A STRONG DOLLAR. IT IS JUST THAT SIMPLE. SO EVERY TIME A POLITICIAN GOES AFTER THE FED AND A VERY PERSONAL AND INAPPROPRIATE WAY, IF YOU ARE PART OF THE FINANCIAL COMMUNITY, YOU NEED TO PUSH BACK ON THAT AND MAKE IT CLEAR THAT WE NEED THE SEPARATION BETWEEN THE HALLS OF WASHINGTON AND THE CHOICES MADE IN THE FEDERAL RESERVE BOARD. THERE IS A GEOPOLITICAL FACTOR -- ERIK: THERE IS A GEOPOLITICAL FACTOR WEIGHING IN THAT IS CHINA. THERE ARE MANY AMERICANS WHO BELIEVE THAT WE ARE LOCKED IN AN EXISTENTIAL BATTLE WITH CHINA, A BATTLE THAT WILL DEFINED THE 21ST CENTURY AND THAT IT IS HIGH TIME WE FOUGHT BACK. THAT IS WHAT THEY THINK.
I WANT TO BE CLEAR, AND IN FACT MORE IMPORTANTLY, I WANT YOU TO BE CLEAR, BUT AS I UNDERSTAND IT, YOU BELIEVE THE UNITED STATES IS MAKING A HUGE MISTAKE TRYING TO DECOUPLE THIS ECONOMY FROM CHINA'S, AND YOU BELIEVE IT IS JUST AS EXISTENTIAL TO QUESTION. AM I CORRECT QUE? KEN: I THING IN MANY WAYS WE HAVE ALREADY DECOUPLED, BY RESTRICTING CHINESE ACCESS TO AMERICAN SEMICONDUCTORS AND TO AMERICAN SOFTWARE, WE HAVE PUSHED THEM INTO A NATIONAL CAMPAIGN TO ELIMINATE THEIR DEPENDENCY ON THE WEST AND TECHNOLOGY. YOU CAN IMAGINE A WORLD WHERE THERE ARE TWO COMPLETELY INDEPENDENT HARDWARE AND SOFTWARE STACKS. FOR EXAMPLE, IT IS INTEL, WINDOWS, AND THAT IS THE SOFTWARE ECOSYSTEM THAT LIVES ON TOP OF THAT THAT IS USED BY SO MUCH OF THE WESTERN SOCIETY COME FROM GERMANY TO FRANCE CANADA TO JAPAN TO AUSTRALIA. THE UNITED STATES' DOMINANCE IN TECHNOLOGY THE LAST 50 YEARS HAS BEEN JUST STUNNING, AND A HUGE SOURCE OF ECONOMIC GROWTH IN OUR COUNTRY. BY CUTTING THE CHINESE OFF FROM ACCESS TO AMERICAN TECHNOLOGY, WE ARE FORCING THEM TO IN SOME SENSE, THEIR SPACE RACE IS TO BECOME TECHNOLOGICALLY INDEPENDENT.
AND IN THEIR SPACE RACE, THEY ARE GOING TO WIN. THEY ARE GOING TO MAKE THIS HAPPEN. THEY GRADUATE ABOUT TWO TIMES AS MANY FROM COLLEGE AS WE DO, HALF OF WHOM HAVE DEGREES. IN CONTRAST, 22% IN THE UNITED STATES. THEY ARE GRADUATING FIVE TIMES MORE ENGINEERING, TALENTED PROFESSIONALS THAN WE ARE.
THE BELIEF THAT WE WILL BE TECHNOLOGICALLY DOMINANT AGAINST THOSE STATISTICS IS SIMPLY NAIVE, MISPLACED. AS THE CHINESE BUILD OUT THERE SEMICONDUCTORS OF THIS DECADE AND THERE TECHNOLOGY OF THIS DECADE, NOT ONLY WILL THEY USE IT IN THE BIGGEST MARKET IN THE WORLD, WHICH IS THEIR OWN OF 1.4 BILLION PEOPLE, BUT THEY WILL PUSH IT TO ALL THE TRADING PARTNERS, THE BRAZILS AND CHILE'S OF THE WORLD.
I CAN PICTURE A WORLD IN 30 TO 40 YEARS WE HAVE IN SOME SENSE DIVIDED THE WORLD BETWEEN EAST AND WEST TECHNOLOGICALLY. GIVEN THE MASSIVE SCALE ECONOMIES THEY HAVE, I DON'T LIKE OUR POSITION IN THAT OUTCOME. ERIK: YOU'RE AWARE THAT THERE IS SOME SKEPTICISM ABOUT CHINA'S ABILITY TO COMPETE ON EVEN FOOTING WITH THE WEST WHEN IT COMES TO ADVANCED TECHNOLOGIES LIKE PUTTING WIRES ON TINY SEMICONDUCTORS PAIR THEY HAVEN'T GOTTEN THERE YET AND THERE ARE VERY FEW COMPANIES IN THE WEST -- SEMICONDUCTORS. THEY HAVEN'T GOTTEN THERE YET AND THERE ARE VERY FEW COMPANIES IN THE WEST. KEN:
I THINK IT IS NONSENSE. THE WORLD'S LEADING COUNTRY IN SEMICONDUCTORS IS PERHAPS TAIWAN . CHINA WILL ARGUE IT IS PART OF CHINA. SO YOU HAVE AN INTERESTING
QUAGMIRE RIGHT THERE. BUT THERE IS ONE OF THE GREATEST MANUFACTURERS OF SEMICONDUCTORS AND THEY DON'T HAVE THE ENTIRE SOLUTION. THEY BUY A VARIETY OF EQUIPMENT FROM AROUND THE WORLD. BUT TALK ABOUT BEING A
POWERHOUSE. THE CHIP THAT IS THE DOMINANT CHIP IN THE INTEL AMD WAR IS MADE BY TSMC. AND GOING BACK TO MY POINT EARLIER, CHINA VIEWS TAIWAN AS PART OF CHINA. THERE IS NO WAY THEY WILL BE TECHNOLOGICALLY IMPOTENT COMPARED TO AMERICA OVER THE NEXT 20 YEARS. THEY WILL GET THERE ONE WAY OR ANOTHER. ERIK:
WHAT DO YOU SAY TO AMERICANS WHO ARE ANGRY THAT ENGAGEMENT WITH CHINA, UNTIL NOW, HAS BEEN ON CHINA'S TERMS AND PARTLY, IF NOT LARGELY A RESULT OF THAT DYNAMIC, THE UNITED STATES HAS LOST SOME OF ITS TECHNOLOGICAL SUPERIORITY. WHAT DO THEY UNDERSTAND ABOUT CHINA? KEN: THERE IS A FARMER TROUBLING PART OF THIS STORY. LET'S GO BACK TO THE THEORY OF THE CASE. CHINA IS GOING TO EVOLVE TOWARDS CAPITALISM. THE UNITED STATES ERASES THAT TRANSFER -- EMBRACES THAT WHOLEHEARTEDLY BECAUSE OUR THEORY WAS THAT AS THEY BECAME CAPITALISTIC, THEY WOULD EMBRACE DEMOCRACY.
AND WE WERE CLEARLY WILLING TO LEAVE A VALUE ON THE TABLE FOR CHINESE FOR THAT JOURNEY, BECAUSE THEY HAVE THE MOST POPULIST COUNTRY IN THE WORLD BE PART OF THE WESTERN ETHOS OF IS INCREDIBLY STRATEGICALLY IMPORTANT. AND IT IS A MUCH BETTER OUTCOME THAN FACING THE DYNAMIC WE FACED BETWEEN US AND THE SOVIET UNION FOR 50 YEARS POST-WORLD WAR II. WHICH PATH WOULD YOU PICK? YOU WANT TO BRING THEM INTO OUR SPHERE AND OUR BELIEF WAS THAT THEM BECOMING CAPITALISTS WOULD INEVITABLY BRING THEM INTO BEING A DEMOCRACY. WHEN WE WROTE THE RULES WITH THEM, WE DID IT WITH THIS MINDSET OF MAKING THAT HAPPEN. NOW, LET'S TAKE A STEP BACK. UNQUESTIONABLY, THE AMERICAN CONSUMERS AT LARGE WON HUGE.
CHINA BECAME A HUGE SOURCE OF GOODS THAT WE CONSUME IN THE UNITED STATES AT AN INCREDIBLY LOW COST. I MEAN, A GIANT CONSUMER WINDFALL FOR AMERICANS. YOU WALK INTO WALMART, FLIP EVERYTHING OVER, MADE IN CHINA, MADE IN CHINA, MADE IN CHINA. THE CHALLENGE WE UNDERESTIMATED WAS HOW DEVASTATING THIS WAS GOING TO BE TWO SMALL TOWNS THAT WOULD HAVE A SINGLE FACTORY THAT WOULD SHUT DOWN AS ITS MANUFACTURING WAS MOVED TO CHINA. THAT WAS THE GIANT POLICY ERROR THAT I THINK WE ALL UNDERAPPRECIATED. IT WASN'T HOW IT WAS WENT TO IMPACT NEW YORK CITY OR CHICAGO OR L.A., BUT HOW IT WAS WINTER
IMPACT A SMALL TOWN IN UPSTATE NEW YORK OR MICHIGAN OR IN OHIO, WHO LOST JOBS THAT WOULD NEVER BE REPLACED TO CHINA. THAT WAS A TERRIBLE POLICY MISCALCULATION, NOT DONE IN BAD FAITH, BUT WE DIDN'T HAVE THE TRAINING OR THE RELOCATION STRATEGIES TO HELP PEOPLE GET BACK ON THEIR FEET. A SUBSTANTIAL NUMBER OF AMERICANS REALLY FELT THE BRUNT OF THIS POLICY IN A WAY THAT WAS NOT APPRECIATED IN THE HALLS OF WASHINGTON OR BY ECONOMISTS AT THE TIME. WE HAVE BEEN SLOW AS A NATION TO RESPOND TO THE. -- TWO THAT. ERIK: YOU'RE WILLING TO BET, YOU SAID A FEW MOMENTS AGO, ON CHINA'S ABILITY AND CHINA'S WILL TO COMPETE. ARE YOU WILLING TO BET ON
AMERICA'S ABILITY TO COMPETE? KEN: WE NEED TO GET BACK TO OUR CORE VALUES, IF WE ARE GOING TO WIN. ERIK: WHAT DOES THAT MEAN? KEN: THAT MEANS OUR CHILDREN IN SCHOOL NEED TO BE TAUGHT THE VIRTUES OF COMPETITION AND OF WINNING. THEY NEED TO BE TAUGHT THE VIRTUE OF EARNED SUCCESS. IT CAN'T BE THAT EVERY TIME A
RACE IS WON, THERE ARE TWO GOLD MEDAL WINNERS. [LAUGHTER] [APPLAUSE] AND EARNED SUCCESS IS SO IMPORTANT TO THE PSYCHOLOGICAL HEALTH OF OUR COUNTRY. WHEN PEOPLE KNOW THEY HAVE DONE A JOB WELL, THEY TAKE PRIDE IN THAT. THEY DERIVE PSYCHOLOGICAL VALUE FROM THAT. IF YOU LOOK AT THE UNITED STATES, AMONGST OUR CHILDREN, ONE IN 10 SUFFER FROM SEVERE DEPRESSION. IT IS INCUMBENT AND SUPPLE TO ME THAT ONE IN 10 CHILDREN IN OUR COUNTRY ARE SEVERELY DEPRESSED.
AND THIS TRACES BACK TO A LOSS OF MEANING IN LIFE. WHEN LIFE EVOLVES AROUND YOUR INSTAGRAMMING FACEBOOK ACCOUNT, AND NOT AROUND HOW WELL YOU DO ON THE SPORTS FIELD, HOW WELL YOU DO IN CLASS, HOW WELL YOU DO IN YOUR DRAMA, BACK -- THE ACTIVITIES AFTER SCHOOL, YOU HAVE LOST YOUR WAY IN LIFE. WE NEED TO TEACH OUR CHILDREN MATH AND SCIENCE, HOW TO READ, HOW TO WRITE, AND HOW TO COMPETE, AND HAD TO TAKE JOY IN SUCCESS. BECAUSE WE NEED THESE CHILDREN
TO LEAD OUR COUNTRY IN 20 YEARS. FOR ME, THE MOST HEARTBREAKING PART OF THE PANDEMIC, LET ME GIVE YOU TWO STORIES. NUMBER ONE, WHY HAVEN'T WE BROUGHT THE SCIENCES -- SCIENTISTS FROM MODERNA AND JOHNSON & JOHNSON INTO THE WHITE HOUSE TO RECOGNIZE THEM PUBLICLY FOR THEIR UNBELIEVABLE ACCOMPLISHMENT OF DEVELOPING A VACCINE IN A YEAR? THESE -- [APPLAUSE] THESE MEN AND WOMEN ARE THE HEROES OF OUR LIFETIME, AND YET THEY ARE NAMELESS TO EVERYONE IN THIS ROOM FOR ALL INTENTS AND PURPOSES. BUT THEY ARE THE HEROES OF OUR
LIFETIME. IT TOOK US FOUR YEARS, IT WAS OUR FASTEST PRIOR TIME FOR A VACCINE, THIS IS LIKE A MIRACLE SCIENCE. AND YET THERE ARE NO HEROES AMONGST THIS GROUP. THERE ARE NO PEOPLE THAT OUR CHILDREN ARE LOOKING UP TO SAY, I WANT TO BE LIKE HER. I'M WILL TO MAKE THAT HAPPEN ONE DAY.
-- I WANT TO MAKE THAT HAPPEN ONE DAY. THAT'S NOT HAPPENING. AT THE SAME TIME, THIS IS A NATION, WE WON WORLD WAR II BECAUSE WE DON'T PRODUCED THE GERMANS. -- WE OUT PRODUCED THE GERMANS. WE PRODUCED MORE PLANES, TANKS, MORE SHIPS, MORE ALL TILLERY THEN ONE CAN EVERYONE HAD IMAGINED UPFRONT TO WIN WORLD WAR II. THEY GROSSLY UNDERSTATES THE SACRIFICE OF LIFE AND MINIMIZES THE BRAVERY OF THOSE WHO FOUGHT FOR US IN BOTH THE PACIFIC AND EUROPE. BUT A BIG PART OF THE SUCCESS STORY OF AMERICA IN WORLD WAR II WAS THE MEN AND WOMEN WHO WENT TO WORK IN OUR FACTORIES TO ARM OUR MILITARY TO WIN. WHY DO I TALK ABOUT THIS?
WE COULD NOT MAKE VENTILATORS, WE COULD NOT MAKE VENTILATORS. I DON'T KNOW WHAT OUR HEROES OF WORLD WAR II WOULD SAY ABOUT A COUNTRY THAT IN 60 YEARS, LOST ITS MANAGEMENT CAPABILITY AND EXECUTION SKILLS TO MAKE VENTILATORS. ERIK: PART OF WHAT YOU ATTRIBUTE THIS LACK OF COMPETITIVENESS TO HIS FUNCTIONAL -- IS A FUNCTIONAL, PROBLEM IN THE EDUCATIONAL SYSTEM, AND PART OF IT IS CULTURAL. THIS LACK OF DRIVE AND EARNED ACCOMPLISHMENT. IS IT POSSIBLE THAT THERE IS ANOTHER FACTOR AS WELL? THAT IF MORE AMERICANS BELIEVED THAT THE ODDS OF SUCCESS WERE NOT TILTED SO FAR IN FAVOR OF THOSE WITH MONEY, POWER, INFLUENCE, AND HISTORIC ADVANTAGES, THEY WOULD BE MORE COMPETITIVE IN OTHER WORDS, INEQUALITY IS PART OF THE PROBLEM? KEN: THERE IS NO DOUBT THAT WE HAVE NARROWED THE WINDOW OF OPPORTUNITY IN OUR COUNTRY BY OUR BROKEN K-12 EDUCATIONAL SYSTEM. THERE IS NO DOUBT.
AND IT TRACES BACK TO THE RISE OF THE TEACHERS UNIONS IN THE 1960'S, WHEN WE PUT THE INTEREST OF OUR TEACHERS AS PROFESSIONALS IN FRONT OF THOSE AS -- THOSE OF OUR CHILDREN WHO ARE THE FUTURE OF OUR COUNTRY. TO BE CLEAR, I WAS AT MY HIGH SCHOOL CLASS REUNION A FEW WEEKS AGO, LARGELY TO PAY TRIBUTE TO ONE OF MY TEACHERS WHO WAS SO IMPORTANT IN MY LIFE, WHO WAS ABLE TO ATTEND AND CELEBRATE HIS BIRTHDAY WITH US. WE ALL HAVE THOSE TEACHERS IN OUR LIVES WHO LEFT SUCH A MARK ON WHO WE ARE. BUT YET, I WATCH MAYOR MAN U WELL ABSOLUTELY ATTACKED BY THE TEACHERS UNION FOR TRYING TO DO THE BASIC NECESSITY OF HAVING A LONGER SCHOOL YEAR AND LONGER SCHOOL DAY.
CHICAGO IS ONE OF THE SHORTEST SCHOOL YEARS IN THE COUNTRY. WE HAVE LESS HOURS OF CONSTRUCTIONAL OPPORTUNITY FOR OUR KIDS THAN ANY OTHER MAJOR CITY. OUR MAYOR WENT TO BAT TO CHANGE THAT AND GOT BATTED OVER THE HEAD BY THE TEACHERS UNION. AND IT WAS A DISGRACE. HE WORKED SO HARD TO IMPROVE OUR PUBLIC SCHOOLS IN CHICAGO, AND TO SEE THAT UNDERMINE CONTINUALLY BY THE UNIONS HAS BEEN HEARTBREAKING. NOW IT IS EVEN MORE REMARKABLE, THE IDEA OF US UNIONIZING OUR PRINCIPLES. WE ARE GOING TO TAKE AWAY THE PEOPLE WHO ARE MOST ACCOUNTABLE, AND I'M GOING TO TELL YOU, I HOSTED A DINNER FOR OUR PRINCIPLES A FEW YEARS AGO TO THANK THEM.
JUST A DINNER TO THANK THEM FOR A JOB WELL DONE. WHEN YOU HEAR THE STRUGGLES THEY FACE IN DEALING WITH THE TEACHERS UNION, AND YOU HEAR HOW HARD FAMILIES WORK TO OVERCOME THESE OBSTACLES, ONE TEACHER SPOKE ABOUT -- ONE PERSON SPOKE ABOUT HOW THEY, BY UNION CONTRACT, CANNOT TEACH A CERTAIN MATH CLASS IN THEIR SCHOOL WITH THEIR STAFF. AND THE PARENTS HAVE A CARPOOL TO COME PICK UP CHILDREN TO TAKE THEM FROM ONE SCHOOL TO ANOTHER SCHOOL FOR AN HOUR OF INSTRUCTION AND BRING THEM BACK. THIS IS ABSURDITY. ERIK: I WANT TO REMIND THOSE WHO ARE JUST TUNING IN, OUTSIDE THIS ROOM, THAT WE ARE SPEAKING WITH KEN GRIFFIN, THE FOUNDER AND CEO OF CITADEL AND CITADEL SECURITIES. TURNING THE FOCUS BACK AGAIN TO GOVERNMENT, IF YOU WILL, AND FISCAL POLICY, WHERE DO YOU AGREE AND DISAGREE WITH PRESIDENT BIDEN'S ECONOMIC AGENDA? KEN: ONE THING IS HE HAS SUCH AN EXPANSIVE AGENDA. THERE IS PLENTY TO LIKE AND
PLENTY NOT TO LIKE. THERE ARE A FEW THINGS HE HAS SPOT ON RIGHT. WE NEED TO REDUCE REGULATORY REQUIREMENTS THAT MAKE IT DIFFICULT FOR PEOPLE TO HAVE CAREERS. NUMBER OF STATES HAVE ABSURD REQUIREMENTS TO BE A HAIRDRESSER. IT DIMINISHES OPPORTUNITY.
GOING BACK TO YOUR EARLIER POINT, PEOPLE WANT TO HAVE A CHANCE TO GET AHEAD. WHY WE HAVE SO MANY STATES THAT HAVE SO MANY ANTIQUATED RULES DESIGNED TO PROTECT TRADES FROM NEW ENTRANTS IS BEYOND ME. PRESIDENT BIDEN HAS THAT SPOT ON RIGHT. HE HAS IT SPOT ON RIGHT BUT NONE COMPETED FOR AGREEMENTS THAT PREVENT PEOPLE IN LOW SKILLED SERVICE JOBS FROM MOVING FROM ONE EMPLOYER TO ANOTHER SHOULD BE PROHIBITED. HE IS ABSOLUTELY RIGHT. PROTECTING INTELLECTUAL PROPERTY IS REALLY IMPORTANT.
BUT STOPPING A HOUSECLEANER FROM GOING FROM ONE HOTEL CHAIN TO ANOTHER IS DISGRACEFUL. HE HAS GOT THAT SPOT ON RIGHT. THE CORE INFRASTRUCTURE BUILT PASSED BY OUR BIPARTISAN LEADERSHIP IN THE SENATE, THAT IS REALLY NEEDED INFRASTRUCTURE FOR AMERICA. FOR ROADS, AIRPORTS, TO HELP ADDRESS THE DIGITAL DIVIDE THAT EXISTS IN AMERICA. HUGE, HUGE SUPPORTER OF THAT LEGISLATION. IT HELPS TO TEAR DOWN THE BARRIERS TO GETTING AHEAD.
SPOT ON RIGHT. THE THREE AND A HALF TRILLION DOLLARS SPEND FEST, THANK GOD FOR SENATOR MANCHIN. [APPLAUSE] AND HE IS SPOT ON RIGHT. WE ARE NOT IN A POSITION TO BE TAKING ON CRIPPLING DEBT AT THE END OF AN ERA OF TAKING ON CRIPPLING DEBT. TO ENGAGE IN JUST AN ABSOLUTE -- THERE IS A PORTFOLIO OF PORK BELLY SPENDING UNLIKE ANY WE HAVE SEEN BEFORE. THIS SUMS IT UP, WE CAN DEBATE DB AND THEIR IMPACT ON CLIMATE, BUT IF WE ARE GOING TO AGREE THAT ELECTRIC VEHICLES ARE GOOD FOR CLIMATE CHANGE, THEN I DON'T SEE WHY ONE VEHICLE IS BETTER THAN THE OTHER. THEY WANT TO HAVE A CELL --
HAVE A SUBSIDY FOR ELECTRIC VEHICLES MADE IN AMERICA IN UNIONIZED POINTS, BUT NOT PLANTS THAT ARE NOT UNIONIZED. THIS IS REALLY AN INCREDIBLY PARTISAN AND IN MY OPINION, CORRUPT PIECE OF LEGISLATION. I GIVE MANSION CREDIT FOR HAVING -- HE SAID IN HIS OP SAID, I'VE SWORE AN ALLEGIANCE TO THE NATION AND FIDELITY OF ITS CONSTITUTION NOT TO A POLITICAL PARTY. I WISH WE SAW MORE PEOPLE IN WASHINGTON WHO UNDERSTOOD WHEN ELECTED TO OFFICE, AMERICA COMES FIRST. [APPLAUSE] ERIK: IT APPEARS THE FEDERAL GOVERNMENT IS GOING TO HAVE A BIGGER PROBLEM ON ITS HANDS THEN WHETHER TO PASS THE INFRASTRUCTURE BILL OR THE SPENDING BILL, FAR SOONER, AND THAT HAS TO DO WITH THE POSSIBILITY THAT IN DAYS FROM NOW, THE UNITED STATES WILL BREACH THE DEBT CEILING. WHAT IF THAT HAPPENS? KEN: WOW. WE'VE PLAYED THIS GAME OF CHICKEN BEFORE.
AND EVERY TIME SOMEBODY BLINKS, AND I HOPE THAT COOLER MINDS PREVAIL. AND WE BLINK AGAIN BEFORE WE GO OVER THE CLIFF. I DO THINK THAT DEMOCRATS HAVE A RESPONSIBILITY TO PUSH THE SOLUTION TO THIS PROBLEM FORWARD.
IT IS THERE SPENDING -- THEY'RE SPENDING THAT IS CAUSING SO MUCH UNREST WITHIN THE MODERATES OF THEIR PARTY ACROSS THE REPUBLICAN FLANK. IF THEY ARE GOING TO TRY TO PUSH A $3.5 TRILLION SPENDING BILL, THEY SHOULD BE PUSHING FIRST AND FOREMOST THE SOLUTION TO THE DEBT CEILING ISSUE. THEY HAVE GOT TO GIVE ON THIS FRONT. KEN: NOT THE WORK -- ERIK: ANOTHER REPUBLICANS, NOT SENATOR MCCONNELL? KEN: I THINK SENATOR MCCONNELL IS IN A TOUGH SPOT. YOU'RE SUPPOSED TO SIGN OFF ON A SPENDING BILL THAT NOT ONE MEMBER OF YOUR PARTY APPROVES OF. THIS IS WHERE WE NEED COMPROMISE.
IN BOTH SIDES NEED TO COME TO THE TABLE TO COMPROMISE, AND ONE SIDE IS NOT EVEN AT THE TABLE RIGHT NOW. ERIK: A FEW QUESTIONS ABOUT THE MARKETS IN WHICH YOUR COMPANY OPERATES. CITADEL SECURITIES IS AT THE CENTER OF THE DEBATE OVER PAYMENT FOR ORDER FLOW. BUYING THE RIGHT TO EXECUTE BUY AND SELL ORDERS FROM BROKERAGES SUCH AS ROBINHOOD OR CHARLES SCHWAB.
IT IS ONE OF THE REASONS YOU HAD TO TESTIFY BEFORE CONGRESS OVER THE GAMESTOP SITUATION THIS YEAR. TO THOSE UNINITIATED, PAYMENT FOR ORDER FLOW IS WHY RETAIL INVESTORS CAN EFFECTIVELY TRADE FOR FREE. CRITICS ARGUE THERE IS NOTHING FREE ABOUT IT, AND THE HIDDEN COSTS OF FIRMS LIKE YOURS ARE MAKING SO MUCH MONEY, A HIDDEN COST ARE THE REASON FIRMS LIKE YOURS ARE MAKING SO MUCH MONEY AS MARKET MAKERS. I'M NOT -- KEN: I'M NOT GOING TO GET INTO THAT DEBATE OVER WHETHER IT IS BENEFICIAL OR WHETHER IT IS NOT BENEFICIAL. WE CAN LITIGATE THAT ELSEWHERE.
BUT THERE IS A RENEWED INTEREST IN WASHINGTON, IN REGULATING PAYMENT FOR ORDER FLOW. AND I WOULD LIKE TO KNOW, WHAT IS AT STAKE FOR CITADEL SECURITIES IF PAYMENT FOR ORDER FLOW WERE BANNED. KEN: LET US HOPE THAT IN WASHINGTON, WE MAINTAIN THE STATUS QUO. THAT BROKERAGE FIRMS HAVE A DUTY TO SECURE THE BEST EXECUTION THEY CAN FOR THEIR CUSTOMERS. THAT IS THE BASIS ON WHICH WE COMPETE. THAT IS THE BASIS ON WHICH WE WIN. LET'S TAKE A STEP BACK. .
PAYMENT FOR ORDER FLOW IS A COST TO ME. IF YOU ARE GOING TO TELL ME THAT BY REGULATORY FIAT, THAT ONE OF MY MAJOR ITEMS OF EXPENSE DISAPPEARS, I'M OK WITH THAT. ERIK: YOU WOULD BE FINE IF PAYMENT FOR ORDER FLOW WOULD DISAPPEAR TOMORROW? KEN: AT 100,000 FEET, I'M QUITE FINE WITH THAT. SO LONG AS WE LEAD THE STANDARD THAT EXECUTION QUALITY IS HOW ORDERS SHOULD BE ALLOCATED AMONGST MARKET CENTERS. HAVING SAID THAT, I THINK THE DOMAIN YOU ASIAN OF PARTICIPATION IN OUR CAPITAL MARKETS FROM REINTRODUCTION OF COMMISSIONS WOULD BE A HUGE LOSS.
HATS OFF TO THE TEAM AT SCHWAB, WHICH IS NOW SCHWAB AMERITRADE OR E*TRADE OR ROBINHOOD, VERRILLI DEMOCRATIZING FINANCE IN AMERICA. IT HAS NOT ALL BEEN GOOD. BUT IT HAS BEEN REALLY GOOD IN BROAD STROKES. AND FREE TRADING HAS BEEN A BIG PART OF THE STORY.
THE COST OF TRADING HAS COME DOWN DRAMATICALLY SINCE I WAS IN COLLEGE. I USED TO SPEND 20 OR $30 OF TRADE. NINE YOU CAN TRADE FOR FREE AND -- NINE YOU CAN TRADE FOR FREE. FROM MY VANTAGE POINT, WE WANT TO HOLD ON TO THIS DEMOCRATIZATION OF FINANCE THAT IS TAKING PLACE. IF PAYMENT FOR ORDER FLOW HELPS
TO MAINTAIN THAT AS A REALITY, I THINK THAT IS GOOD FOR EVERYBODY. BUT FROM MY VANTAGE POINT, HAVING ONE OF MY MAJOR COST LINES ELIMINATED, I'M GOING TO BE A WINNER IN THAT SCENARIO. I FIND THIS TO BE A CURIOUS DEBATE THAT WE ARE SEEING UNFOLD. AS I TESTIFIED, ALL I WANT TO KNOW IS WHAT ARE THE RULES OF THE ROAD? IF I HAVE TO DRIVE ON THE LEFT, I WILL DRIVE ON THE LEFT. JUST TELL ME HOW YOU WANT ME TO DRIVE. ERIK: OTHERS WOULD LOVE TO KNOW WHAT YOU THINK ABOUT CRYPTO, CRYPTOCURRENCIES HAVE BECOME A $2 TRILLION MARKET. IN A NUMBER OF OTHER BIG
TRADING FIRMS, INCLUDING THOSE IN THIS TOWN SUCH AS DR W AND JUNK TRADING ARE MAKING A BIG PUSH INTO CRYPTO. DO YOU BELIEVE IN CRYPTO AND EVEN IF YOU DON'T, SHOULD YOUR BUSINESSES BE ACTIVE INVESTORS OR TRADERS IN CRYPTO ANYWAY? KEN: THAT IS A GREAT QUESTION. FIRST AND FOREMOST, I WISH ALL OF THIS PASSION AND ENERGY THAT WENT INTO CRYPTO WAS DIRECTED TOWARD MAKING THE UNITED STATES STRONGER. [LAUGHTER] [APPLAUSE] LET'S FACE IT, IT IS A JIHADIS CALL THAT WE DON'T BELIEVE IN THE DOLLAR. WHAT A CRAZY CONCEPT THIS IS
THAT WE EMBRACE SO MANY BRIGHT YOUNG TALENTED PEOPLE TO COME UP WITH A REPLACEMENT FOR OUR RESERVE CURRENCY, WHICH HELPS TO MAKE OUR STANDARD OF LIVING A REALITY, AND ACCRUES INCREDIBLE BENEFITS BACK TO OUR COUNTRY. LET'S REPLACE THE DOLLARS, THE GLOBAL RESERVE CURRENCY, WITH BITCOIN. THAT IS A BRILLIANT IDEA. BY THE WAY, LET'S BUILD SEVERAL HUNDRED NEW POWER PLANTS THAT PRODUCES AN UNBELIEVABLE AMOUNT OF CARBON TO MAKE THAT DREAM A REALITY. I THINK I MAY BE JUST TOLD YOU HOW I FEEL ABOUT CRYPTO. ERIK: COULD YOU PLEASE BE MORE EXPLICIT? [LAUGHTER] KEN: I WILL HAVE SO MUCH HATE MAIL IN MY INBOX AND TWITTER ACCOUNT AND TWITTER ACCOUNT IN ABOUT 30 MINUTES. I CANNOT COUNT IT. WHAT, -- BUT WE DON'T TRADE TRIPTYCH -- TRADE CRYPTO BECAUSE OF THE REGULATORY UNCERTAINTY.
WE OFTEN MAKE MARKETS IN COMPANIES WHOSE BUSINESS MODELS I DON'T HAVE A FONDNESS FOR, BECAUSE ONE OF OUR JOBS AS A MARKET MAKER IS TO MEET LIQUIDITY DEMANDS OF AMERICAN FAMILIES THAT WANT TO INVEST IN, Y, Z. FRANKLY, IT IS NOT MY JOB TO TELL THEM IF THEY ARE RIGHT OR WRONG. IT IS MY JOB TO PROVIDE THEM WITH THE BEST POSSIBLE PRICE. BECAUSE OF THE LACK OF REGULATORY CERTAINTY AROUND CRYPTOCURRENCY, WE ARE JUST NOT INVOLVED TODAY. AND I REALLY BELIEVE THAT CHAIRPERSON COUNSELOR IS SPOT ON ON THE NEED TO HAVE THOUGHTFUL REGULATION AROUND CRYPTOCURRENCY. I ACTUALLY THINK DOING SO WILL MAKE IT A SMALLER MARKET BECAUSE IT WILL BECOME A MORE COMPETITIVE MARKET WHEN THERE IS REGULATORY CLARITY. AND THAT WILL BE GOOD, A
SMALLER MARKET, LESS PEOPLE INVOLVED WHO ARE FRANKLY JUST TRYING TO MAKE A QUICK BUCK, AND WHATEVER THE VIRTUES ARE OF THAT PRODUCT, AND I THINK THOSE ARE NEBULOUS, WILL BECOME VERY DIFFERENT IN THE WORLD OF COMPETITIVE EXCHANGES AND COMPETITIVE PRICING BY TIER ONE MARKET MAKERS WILLING TO PUT THEIR BEST FOOT FORWARD. I REALLY BELIEVE CHAIRPERSON GENSLER IS SPOT ON ON THE NEED FOR REGULATION. IN THE SEC HAS A SOLID HISTORY OF WRITING GOOD REGULATORY POLICY. ERIK: TO BE CLEAR, IF IT WERE REGULATED, YOU WOULD TRADE IT? KEN: I WOULD, IT WOULD MEET THE NEEDS OF OUR ONLINE BROKERAGE PARTNERS WHO WANT TO HAVE A TIER ONE FIRM THINKING CHRIST IS. PART OF THE REASON WE ARE SO SIGNIFICANT IN RETAIL MARKET-MAKING IS OUR INCREDIBLY HIGH RELIABILITY. WE ARE THERE EVERY DAY, EVERY MINUTE OF EVERY DAY, AND WE PROVIDE A GREAT SERVICE EVERY DAY, AND EVERY MINUTE OF EVERY DAY.
THEY WANT US TO PROVIDE PRICING IN CRYPTO. I DON'T WANT TO TAKE ON THE REGULATORY RISK IN THIS REGULATORY VOID THAT MY CONTEMPORARIES ARE WILLING TO TAKE ON. ERIK: WHEN YOU LAST SPOKE HERE AT THE ECONOMIC CLUB OF CHICAGO IN 2013, YOU DESCRIBED THIS AS A CITY AND STATE, AND I'M QUOTING YOU DIRECTLY, WITH BROKEN SCHOOLS, BANKRUPT PENSIONS, RISING CRIME, A DECLINE IN TAX BASE, AND PUBLIC CORRUPTION. HERE WE ARE. IT IS 2021. EIGHT YEARS LATER. HOW IS CHICAGO DOING. BETTER OR WORSE? [LAUGHTER] KEN: I CAN'T BELIEVE I ACTUALLY GAVE THAT QUOTE. BECAUSE THE BOTTOM LINE IS IT
IS EVEN WORSE. IT IS EVEN WORSE. SINCE I LAST SPOKE IN 2013, 25,000 OF MY FELLOW CHICAGOANS HAVE BEEN SHOT. AND IT IS A DISGRACE THAT OUR GOVERNOR WILL NOT INSERT HIMSELF INTO THE CHALLENGE OF ADDRESSING CRIME IN OUR CITY. IT IS A DISGRACE. [APPLAUSE] I WAS ON A CALL WITH HIM BACK AT THE HEIGHT OF THE CIVIL UNREST. AND ARGUED WITH HIM TO DECLARE A STATE OF EMERGENCY
DID -- TO DEPLOY THE NATIONAL GUARD. NOW, THE GOVERNOR AND I DON'T GET ALONG IN VERY MUCH, YOU MIGHT IMAGINE, GIVEN SOME OF THE BALANCE INITIATIVES THAT HAVE NOT GONE HIS WAY. BUT I TOLD HIM TO DEPLOY THE NATIONAL GUARD AND HE GOES, IT WILL NOT LOOK GOOD FOR THERE TO BE MEN AND WOMEN ON MICHIGAN AVENUE WITH ASSAULT STYLE WEAPONS. IF THAT SAVES THE LIFE OF A CHILD, I DON'T CARE. AND HE DOESN'T CARE.
WE HAVE OUR WORK CUT OUT FOR US BECAUSE WE HAVE A GOVERNMENT IN OUR STATE THAT CONTINUALLY PUTS VOTES IN FRONT OF PEOPLE, VOTES IN FRONT OF LIVES, VOTES IN FRONT OF SCHOOLS, AND WE NEED TO TAKE THE STATE BACK IN BY INCH BY PEOPLE THAT PUT THEIR POLITICS FIRST AND PUT OUR PEOPLE SECOND. [APPLAUSE] AND I DEFINITELY WILL NOT BE NEEDING A FRUIT BASKET THIS YEAR. ERIK: OF COURSE, WE ARE HERE NOT JUST TO TALK ABOUT PROBLEMS, WE ARE HERE TO TALK ABOUT SOLUTIONS. GIVE ME THE THREE MOST CRITICAL STEPS THE ELECTED LEADERSHIP IN THE CITY AND STATE, MAYOR LIGHTFOOT AND GOVERNOR PRITZKER, SHOULD TAKE TO REVERSE THE CHICAGO SLIDE. KEN:
WE HAVE KNOWN WHAT TO DO SINCE I SPOKE IN 2013. WE HAVE KNOWN WHAT TO DO SINCE THE START OF THE CENTURY. THAT IS WHAT MAKES IT SO SET -- SO FRUSTRATING. WE NEED TO REFORM OUR PENSIONS TO MAKE THE STATE FISCALLY SUSTAINABLE. I DO NOT SEE WHY NEW STATE EMPLOYEES ARE NOT PUT INTO SOCIAL SECURITY LIKE THE REST OF US. TO THE EXTENT WE WANT TO AUGMENT THEIR PENSIONS, WE HAVE A DEFINED CONTRIBUTION PLAN LIKE THE REST OF US IN THIS ROOM HAVE. THAT GETS ARE SPENDING UNDER
CONTROL IN THE LONG RUN. NUMBER TWO, AND THIS IS A FAR MORE RECENT PROBLEM, WE NEED TO SUPPORT OUR COLLEAGUES IN PUBLIC SAFETY. OUR POLICE FORCE. WE NEED THEM -- [APPLAUSE] WE NEED OUR POLICE OFFICERS TO KNOW THAT THEY ARE ALSO ENTITLED TO THE BENEFITS OF BEING AN AMERICAN CITIZEN. THAT YOU ARE INNOCENT UNTIL PROVEN GUILTY. IT IS INCREDIBLY HARD TO DO YOUR JOB AS A POLICE OFFICER IF THE MOMENT YOU HAVE TO PROTECT YOURSELF, YOU HAVE TO WONDER, WILL YOU GO TO JAIL? WILL YOU LOSE YOUR JOB? WILL YOU BE PUBLICLY PERSECUTED AND HUMILIATED BEFORE ANY OF THE FACTS COME FORWARD? IN THAT IS WHERE YOU ARE AS A CHICAGO POLICE OFFICER TODAY AND IT IS WRONG.
THIS IS NO EXCUSE FOR THE ACTS OF POLICE BRUTALITY THAT HAS TAKEN PLACE IN OUR CITY AND ACROSS THE COUNTRY. NEED OUR POLICE OFFICERS WHO HAVE OUR BACKS IN THE STREET TO FEEL LIKE WE HAVE THEIR BACKS OF DOING THEIR JOB. THIRD, WE NEED TO FIX OUR SCHOOLS.
I SPOKE ABOUT IT EARLIER. CHICAGO NEEDS TO HAVE ACE -- HAS A SHORT SCHOOL DAY AND SCHOOL YEAR. WE HAVE CHILDREN WHO HAVE LOST A FULL YEAR OF LEARNING DUE TO THE PANDEMIC. AND THERE IS NO REAL PLAN TO PUT THEM BACK ON TRACK. AND WE NEED TO DEAL WITH THAT
ISSUE. WE NEED TO DEAL WITH IT HERE AND NOW. ERIK: THE RISK OF BEING BLUNT, WHY ARE YOU STILL HERE IN CHICAGO? AND WHY OUR CITADEL AND CITADEL SECURITIES STILL HERE IN CHICAGO? KEN: WE ARE NOT HERE IN CHICAGO AS A BIRD AS MUCH IN 2013. WE HAVE WELL OVER 1000 PEOPLE IN NEW YORK.
IT HAS BECOME THE CENTER POINT FOR OUR HEDGE FUND -- HEDGE FUND. IT IS COMING DIFFICULT TO HAVE THIS AS OUR GLOBAL HEADQUARTERS, A CITY WHICH HAS SO MUCH VIOLENCE. CHICAGO IS LIKE AFGHANISTAN ON A GOOD DAY. AND THAT IS A PROBLEM. ERIK: YOU JUST MENTIONED NEW YORK.
KEN: I WILL PUT THIS IN BLACK-AND-WHITE. I HAD 25 BULLET SHOTS, THEY TRIED TO CARJACK THE SECURITY DETAIL THAT SITS OUTSIDE MY HOUSE. IT DIDN'T GO WELL FOR THE CARJACKERS. BUT IT TELLS YOU HOW DEEP CRIME RUNS IN THIS CITY. THERE IS NOWHERE WHERE YOU CAN
FEEL SAFE TODAY WALKING HOME AT 9:30 AT NIGHT. AND YOU WORRY ABOUT YOUR KIDS GOING TO AND FROM SCHOOL. THAT IS NO WAY FOR OUR CITY TO EXIST. AND IT IS REALLY HARD TO RECRUIT PEOPLE TO CHICAGO WHEN THEY READ THE HEADLINES, THEY KNOW THE FACTS. I CANNOT LOOK PEOPLE IN THE EYE LIKE I DID 20 YEARS AGO. 20 YEARS AGO, THIS IS A GREAT PLACE TO RAISE A FAMILY. THIS IS A GREAT PLACE TO CALL
HOME. AND I COULD SAY THAT WITH A GENUINENESS THAT RESONATED WITH PEOPLE. THEY WOULD BRING THEIR WIVES AND CHILDREN HERE OR THEIR HUSBANDS, AS THE CASE MAY BE. I CAN'T GIVE THAT SAME SPEECH TODAY. I CAN'T IN GOOD CONSCIENCE.
ERIK: FOR HOW MUCH LONGER IS THIS THE GLOBAL HEADQUARTERS FOR CITADEL? KEN: IT IS PROBABLY MEASURED IN YEARS, NOT DECADES, IF WE DON'T CHANGE COURSE. ERIK: YOU MENTIONED THE JOBS YOU CREATED IN NEW YORK. AND THAT IS BECAUSE, I PRESUME, NEW YORK OFFERED SOMETHING OF AN ANTIDOTE TO THE DYSFUNCTION YOU HAVE JUST DESCRIBED IN CHICAGO. DO YOU STILL BELIEVE AS STRONGLY THAT NEW YORK IS THE ANTIDOTE? KEN: YOU GUYS NEED NEW MEDICINE TOO. BECAUSE SOME OF THE SAME PROBLEMS WE HAVE FACED IS NOW UNFOLDING IN NEW YORK. AND I HOPE THAT THE NEW MAYOR
ELECT WILL UNDERSTAND THAT WHEN THEY LOOK ACROSS THE COUNTRY TO WHAT HAS HAPPENED IN DETROIT, OR HERE IN OUR GREAT CITY, THE PATH THAT NEW YORK IS ON IS A SCARY PATH. AND THIS IS WHERE GIULIANI AND BLOOMBERG GET SO MUCH CREDIT IN CLEANING UP CRIME, YOU CAN HAVE A GREAT GLOBAL CITY. [APPLAUSE] ERIK: THIS MAY BE THE SAME QUESTION ASKED TWO WAYS. WHERE ARE BUSINESS CONDITIONS
IN THIS COUNTRY BEST, AND WHERE ARE YOU DOING MOST OF YOUR HIRING TODAY? KEN: THOSE ARE TWO VERY DIFFERENT QUESTIONS. BUSINESS CONDITIONS IN THIS COUNTRY ARE DEFINITIVELY FAR STRONGER ACROSS MOST OF THE SUN BELT STATES. LESS REGULATION. LESS TAXES. A WORKFORCE THAT IS VERY MUCH OF THE THOSE OF, I'M HERE TO EARN IT. THE NORTHERN CITIES HAVE A PHENOMENAL ADVANTAGE. IN CHICAGO, IS CALLED THE UNIVERSITY OF CHICAGO. IT IS NORTHWESTERN.
IN NEW YORK, IT IS COLUMBIA, YALE. IN BOSTON, IT IS HARVARD. . OUR GREAT UNIVERSITIES ARE THE EPICENTERS OF SUCCESS. IN THOSE SCHOOLS ANCHOR OUR GREAT NORTHERN CITIES. THE SOUTH DOES NOT HAVE NOT YET AT LARGE. BUT AS THAT CHANGES OVER THE YEARS TO COME, AS UNIVERSITIES IN THE SOUTH CONTINUE TO GET STRONGER, UNIVERSITY OF TEXAS AT AUSTIN OR RICE OR GEORGIA TECH, WHICH IS UNBELIEVABLY GOOD, YOU WERE GOING TO READ -- YOU ARE GOING TO SEE THE BALANCE OF POWER SHIFT FROM THE NORTH TO THE SOUTH. AS THE EAVES OF DOING BUSINESS IN THE SOUTH TRIUMPHS THE RICHNESS OF HUMAN CAPITAL THAT IS CREATED BY THE GREAT SCHOOLS OF THE NORTH. ERIK: THAT IS THE FIRST QUESTION.
WHERE ARE YOU DOING ALL OF YOUR HIRING? KEN: WE ARE DOING OUR HIRING ALL OVER THE COUNTRY. NEW YORK IS STILL A HUGE SOURCE OF HIRING FOR US. CHICAGO HAS BECOME SMALLER ON A RELATIVE BASIS. AND THEN WE ARE ABOUT TO SIGN AN OFFICE SPACE IN MIAMI.
AND THAT WILL BE FOR QUITE A BIT OF SQUARE FOOTAGE AND WE ARE GOING TO HAVE A LOT OF PEOPLE LIVING THERE. ERIK: EARLIER TODAY, YOU SAID IT BREAKS YOUR HEART TO BE SO PERSONALLY AND FINANCIALLY ENGAGED IN POLITICS. THAT YOU WOULD NOT DO IT IF YOU DIDN'T HAVE TO COME IN OTHER WORDS. WHAT IS YOUR PERSONAL PHILOSOPHY ON POLITICAL
ENGAGEMENT? WHEN WILL YOU SPEND YOUR MONEY AND WHY TO FIGHT POLITICAL BATTLES? AND IS THERE A LIMIT OF THE DISTANCE YOU WILL GO? ERIK: WE WENT PRETTY FAR -- KEN: WE WENT PRETTY FAR IN THE FAIR TAX BILL, IF I MAY SAY SO. [APPLAUSE] I SHOULD EXPLAIN. FOR THOSE WHO DON'T KNOW, THOUGH GOVERNOR PRITZKER AND CAN SPEND AN AMOUNT OF STEAK OF $50 MILLION OF THEIR OWN MONEY FIGHTING A BILL OVER GRADUATED TAX RATE. AND THE PROPOSAL WAS DEFEATED, WHICH IS TO SAY YOU AND YOUR ALLIES IN THAT RESPECT WERE VICTORIOUS. KEN:
WE RESOUNDED LEE DEFEATED THE GOVERNOR, AND WE DID SO FOR ONE REASON. AND RESOUNDING IS THE RIGHT CHOICE OF WORDS TO. HE IS NOT JUST COMING FOR THE RICH, HE IS COMING FOR EVERYBODY. THE GRADUATE TAX BILL IN ILLINOIS WAS ANOTHER MECHANISM TO TAKE MORE MONEY FROM THE HANDS OF HARD-WORKING ILLINOIS FAMILIES AND PUTTING IT INTO THE COFFERS OF SPRINGFIELD.
I KNOW EVERY PERSON IN THIS ROOM WOULD SIGN UP FOR HIGHER TAXES IF IT MEANT REFORM AND PENSION PLANS AND AN END TO CORRUPTION. I KNOW EVERY PERSON IN THIS ROOM WOULD AGREE WITH THAT. [APPLAUSE] AND I MET WITH THE GOVERNOR ON THIS ISSUE.
HE TALKED ABOUT TAKING $50 MILLION OUT OF THE IP BUDGET. $50 MILLION, IN A STATE THAT HAS A $240 BILLION PROBLEM. HE LIVES IN A DIFFERENT REALITY. I MEAN, IF YOU LOOK AT THIS STATE, EXELON JUST GOT A $700 MILLION BAILOUT FOR ITS NUCLEAR FLEET HAVING ADMITTED IT WAS ENGAGED IN CORRUPTION. JUST A FEW MONTHS AGO. THERE IS NO END TO THE AMOUNT
OF CORRUPTION THAT TAKES PLACE IN ILLINOIS. AND IT LOSES THE CREDIBILITY OF SPRINGFIELD AND OF THE HOUSE OF THE GOVERNOR, SO ILLINOIS HAS TO PUT ITS HOUSE IN ORDER AND WE HAVE TO DO IT QUICKLY. BECAUSE EVERY SINGLE DAY, IT SLIPS THROUGH OUR FINGERS, THE LIABILITIES GET BIGGER AND THE ABILITY TO CHANGE COURSE GET SMALLER. AND I REALLY HOPE, AND THIS IS WHAT KILLS ME, JB PRITZKER, GOVERNOR PRITZKER UNDERSTANDS THE MATH. HE UNDERSTANDS THE ISSUES. I CAN'T BELIEVE THEY WON'T ACTUALLY USE THE POLITICAL CAPITAL HE HAS TO FIX THE PROBLEM. [APPLAUSE]
ERIK: THE TRUTH OF THE MATTER IS FOR THE TIME BEING AND FOR ALL INTENTS AND PURPOSES, THE DEMOCRATIC PARTY CONTROLS POLITICS IN THE STATE AND THE CITY. WHAT IS THE FUTURE FOR THAT PARTY, AND WHO WILL GIVE SUPPORT IN THE RACE FOR GOVERNOR? KEN: SO THAT IS UNCLEAR AT THIS POINT IN TIME. WE ARE AT THE EARLY DAYS OF THE RACE. AND TO CLEAR, THE DEMOCRATS -- I MEAN, RAHM EMANUEL IN HIS OFFICE HAD FOUR PHOTOS OF HIS DAYS IN THE WHITE HOUSE ADMINISTRATION. FOUR. ONE WAS SIGNED, NAPPED UP. ONE OF THE GREAT
ACCOMPLISHMENTS OF NORTH AMERICA. NO ONE IN THIS ROOM HAS EVER WOKEN UP AND SAID, I'M WORRIED ABOUT GOING TO WAR WITH CANADA OR MEXICO. THINK ABOUT THAT FOR A SECOND. HOW MANY COUNTRIES IN THE WORLD CAN YOU SAY TO CITIZENS OF THEIR COUNTRY HAVE NEVER HAD THAT FEAR? YOU HAVE NEVER WOKEN UP AND SAID, WE MIGHT GO TO WAR WITH THE CANADIANS. I WILL GUARANTEE YOU THAT. [LAUGHTER] BUT YOU CAN'T SAY THAT IF YOU ARE IN EUROPE.
YOU CAN'T SAY THAT IF YOU ARE IN ASIA. CAN YOU IMAGINE LIVING IN SOUTH KOREA AND YOU HAVE THE RISK OF NUCLEAR ANNIHILATION EVERY DAY FROM THE NORTH? RAHM EMANUEL'S OFFICE, NAFTA. WELFARE REFORM. READY FOR THE NEXT ONE? THIS NEXT ONE IS BREATHTAKING. A BALANCED BUDGET AT THE FEDERAL LEVEL.
WE HAVE HAD A GREAT LEADERSHIP FROM DEMOCRATIC PARTY OVER THE YEAR ON IMPORTANT ISSUES. IT IS NOT JUST ONE PARTY CAN DO THIS AND THE OTHER CAN'T. IT IS ABOUT THE LEADERSHIP IN THE PARTY, FIGHTING THE FIGHT FOR WHAT IS RIGHT.
THIS IS WHERE PRESIDENT BIDEN HAS TO HOLD THE LINE AGAINST THE SOCIALIST WING OF HIS PARTY, AND REJECT THE $3.5 TRILLION STIMULUS BILL. HE KNOWS -- [APPLAUSE] HE KNOWS THAT IS THE RIGHT THING TO DO. I'VE SUPPORTED PEOPLE FROM BOTH PARTIES IN RACES ACROSS THE COUNTRY. DEMOCRATS AND REPUBLICANS. I DON'T CARE ABOUT THE STICKER ON YOUR BACK. I CARE ABOUT HOW YOU ARE GOING TO PLAY ON THE FIELD AND WHAT YOU ARE GOING TO STAND FOR AS A POLITICIAN. ERIK:
PLEASE SPOKE FAVORABLY ABOUT YOUR INTERACTIONS WITH THE TRUMP ADMINISTRATION AND RECALLED THE ONE TIME IN WHICH HE SPOKE UP PUBLICLY AGAINST THE PRESIDENT. WOULD YOU SUPPORT DONALD TRUMP IF HE RUNS AGAIN FOR PRESIDENT IN 2024? KEN: I THINK IT IS TIME FOR AMERICA TO MOVE ON. [APPLAUSE] THE FOUR YEARS UNDER PRESIDENT TRUMP WERE SO POINTLESSLY DIVISIVE, IT WAS NOT CONSTRUCTIVE FOR OUR COUNTRY. AND I NEVER ACTUALLY FINANCIALLY SUPPORTED THE PRESIDENT. HE CALLED MY OFFICE, NOT HEAT,
BUT ONE OF HIS FUNDRAISERS DID, A VERY SENIOR FUNDRAISER WHO I KNEW. AND I OPENED UP IN SOUTH FLORIDA. I FOUND IT INCREDIBLY OFFENSIVE AS A TAX ON THE HISPANIC COMMUNITY. IN SOUTH FLORIDA, WHEN YOU GROW UP THERE, THOSE ARE THE PEOPLE THAT BUILD YOUR HOUSES, THEY SERVE YOUR FOOD AT RESTAURANTS, AND THEY WERE MY TEAMMATES ON THE SOCCER FIELD. AND I WAS SO APPALLED BY HIS WILLINGNESS TO PLAY IDENTITY POLITICS THAT I WAS NEVER WILLING TO SUPPORT HIM.
HIS ECONOMIC POLICY, BY AND LARGE, WERE PRETTY GOOD FOR AMERICA. HIS WILLINGNESS TO ATTACK PEOPLE ON THE BASIS OF WHERE THEY CAME FROM OR THE COLOR OF THEIR SKIN WAS COMPLETELY INAPPROPRIATE, AND WE NEED TO PUT THAT CHAPTER OF AMERICAN HISTORY BEHIND US. [APPLAUSE] ERIK: YOU HAVE RECENTLY OVER THE PAST SEVERAL MONTHS, LET'S PUT IT THAT WAY, GIVEN SIGNIFICANT AMOUNTS OF MONEY TO GOVERNOR DESANTIS IN FLORIDA. IS HE YOUR PICK TO BE THE REPUBLICAN NOMINEE? KEN: WE WILL SEE HOW GOVERNOR DESANTIS TRAVERSES THE NEXT YEAR AS GOVERNOR BEFORE WE WILL COME TO A CONCLUSION.
OUT OF THE GATE, HE DID AN INCREDIBLE JOB OF PROTECTING THE RETIREES IN SOUTH FLORIDA, ALL FLORIDA, FROM COVID. JUST KNOCKED THE BALL OUT OF THE PARK. WHAT AMAZED ME WAS HOW MUCH PRAISE CUOMO GOT IN NEW YORK FOR MANAGING THE PANDEMIC, AND HOW MUCH DESANTIS WAS ATTACKED. AND I THINK THE RECORD BEARS THAT OUT, THAT IN THE EARLY DAYS OF THE PANDEMIC, THE TEAM IN FLORIDA DID A GREAT JOB OF PROTECTING OUR MOST VULNERABLE. JUST A GREAT JOB. I HAVE BEEN FRUSTRATED, AND WE HAVE BEEN VERY CLEAR IN THIS FRUSTRATION, I HAVE BEEN FRUSTRATED WITH HIS POSITION ON MASKS, BECAUSE IT IS OVERSHADOWED HIS MESSAGING ON VACCINATIONS.
HE HAS CUT HIMSELF UP IN A POLITICAL MAELSTROM OF PUTTING THE CONCEPT OF PERSONAL FREEDOM FIRST AND FOREMOST AROUND MASKS. AND I UNDERSTAND THE PRINCIPAL. BUT FLORIDA IS A REALLY DIVERSE STATE. HE SHOULD HAVE LET EACH COUNTY
MAKE A DECISION ON ITS OWN. PALM BEACH, EVERYONE DID WEAR THREE MASKS IF THEY COULD. IN THE PANHANDLE, NO ONE WOULD WEAR A MASK. FLORIDA IS LIKE A MICROCOSM OF
AMERICA. AND HE SHOULD HAVE RESPECTED THE PASSION THIS ISSUE WOULD HAVE HAD AMONGST HIS CITIZENS. AND IN THIS GIANT, POLITICAL MESS HE HAS MADE, HE HAS LOST THE MESSAGING POINT, AND HE HAS BEEN REALLY GOOD ON THIS ABOUT THE IMPORTANCE OF VACCINES. WE PUSHED HIM LONG AND HARD TO TRY TO GO OUT THERE AND MAKE A CLEAR, FLORIDA WOULD BE THE FIRST STATE TO HAVE BOOSTER SHOTS FOR RETIREES. I THINK THAT IS A REALLY GREAT TALKING POINT FOR SOMEBODY LOOKING TO RUN FOR PRESIDENT, IS TO MAKE IT CLEAR THAT YOU WILL DO WHATEVER IT TAKES TO PROTECT OUR MOST VULNERABLE. I THINK HE HAS LOST THAT WINDOW OF OPPORTUNITY.
HE HAS GOT 12 MORE MONTHS TO SHOW HOW STRONG HE CAN BE AS GOVERNOR. LET'S DECLARE, HE IS SUPER SHARP. HE HAS DONE A PHENOMENAL JOB OF GETTING FLORIDA'S ECONOMY THROUGH THE PANDEMIC. WE HAVE HAD AN OUTCOME WITH COVID IN THAT STATE THAT IS LACKLUSTER, UNFORTUNATELY. I THINK PEOPLE THAT LIVE IN THE STATE FEEL LIKE THEY HAVE HAD THEIR PERSONAL RIGHTS RESPECTED.
AND THAT CAME DOWN TO A CENTRAL POINT AROUND THE WHOLE PANDEMIC FROM DAY ONE. FROM MY VANTAGE POINT AMERICA HAD TWO CHOICES. I TOLD THIS TO THE PRESIDENT. WE CAN DECLARE WAR ON THE VIRUSLIKE THEY DID IN SOUTH KOREA, AND WE CAN DO WHATEVER IT TAKES TO CONTAIN IT LIKE THEY DID IN SOUTH KOREA OR TAIWAN OR ISRAEL. WE ARE GOING TO HAVE TO ACCEPT THAT WE ARE GOING TO LOOK LIKE SOME FORM OF SWEDEN, AND WITH THAT GOES THE SIGNIFICANT COST OF LIFE. AND WE NEVER PICKED A PATH IN AMERICA, AND IN SOME SENSE, GOT THE WORST POSSIBLE OUTCOME WE COULD EVER GET, BY NOT TAKING A PATH. WE GOT THE ECONOMIC DAMAGE OF
HAVING NO STRATEGY, AND A LOSS OF LIFE THAT WAS NOT MEANINGFULLY DIFFERENT THAN SWEDEN. BUT HOLISTICALLY, OUR COUNTRY WAS NOT WILLING TO DECLARE WAR AGAINST COVID-19. ONE OF THE AREAS WE FUNDED OUT OF THE GATE WAS FOR CONTACT TRACING FOR CELL PHONES, TO MIRROR WHAT THEY WERE DOING IN SOUTH KOREA.
AND THE PUSHBACK FROM BIG TECH WAS LIKE GETTING SLAMMED BY A TIDAL WAVE. IT DOES NOT FIT THE MARKETING MOTTO OF PRIVACY. MARKETING MOTTO, FOR GOD SAKE, WE ARE BEING ATTACKED BY A VIRUS THAT IS GOING TO KILL HUNDREDS OF THOUSANDS OF AMERICANS, AND YOU ARE WORRIED ABOUT YOUR MARKETING MOTTO? THE COUNTRY LOST THIS BATTLE IN THE FIRST ATTACK WHEN WE WERE NOT WILLING TO DO WHAT IT TOOK TO SHUT DOWN AMERICA, TO TRULY CONTAIN COVID-19, AND THEN GET BACK ON OUR FEET. AND WE HAVE ALL PAID JUST A CATASTROPHIC PRICE AS A RESULT. ERIK:
WE HAVE HAD A CONVERSATION -- KEN: THAT IS SUCH A DOWNER. ERIK: WE ARE ABOUT TO END ON A DIFFERENT NOTE. WE HAD A CONVERSATION THAT I KNOW EVERYONE WOULD AGREE HAS BEEN PROFOUND AND AS ADVERTISED, PROVOCATIVE. BUT I WOULD BE REMISS HERE IN CHICAGO IF I DID NOT ASK YOU WHETHER THE BEARS SHOULD MOVE FROM PLAYING IN THE CITY TO ARLINGTON HEIGHTS? KEN: I SO HOPE THEY STAY IN CHICAGO.
[APPLAUSE] I SEE IT, AS I LOSE MY FRIENDS ONE BY ONE FROM THIS GREAT CITY. IT IS REALLY STRANGE TO BE -- TO COME ON A TUESDAY NIGHT AND NOT HAVE SOMEONE TO CALL TO GO TO DINNER WITH. BUT THAT IS THE REALITY I LIVE IN. I CAN'T TELL YOU HOW MANY FRIENDS ARE NOW HOLDING IN THEIR WALLETS LICENSES FROM FLORIDA, COLORADO, WYOMING, FROM ALL OVER THE COUNTRY OTHER THAN CHICAGO.
AND THE COMBINATION OF CRIME IN A STATE TAX THAT IS INCREDIBLY HIGHER THAN MOST STATES, PEOPLE JUST DON'T WANT TO CALL THIS HOME AS THEY GET OLDER. NOT ONLY ARE WE LOSING A GENERATION, AND A REALLY IMPORTANT GENERATION OF BUSINESS LEADERS, WE ARE LOSING THE WISDOM THAT GOES WITH THAT COMMUNITY. AND THAT WISDOM IS NOT JUST IN THE FORM OF MENTORING YOUNG PROFESSIONALS, AND IN THIS ROOM IS ANDY MCKENNA. I REMEMBER WHEN I WAS IN MY 30'S, AND HE TOOK ME OUT TO LUNCH, I HAD NEVER MET HIM, TO TALK TO ME ABOUT THE RICH HERITAGE OF THIS CITY WHERE THE BATON IS PASSED FROM ONE GENERATION TO ANOTHER IN TERMS OF CIVIC RESPONSIBILITY AND DUTY.
IT WAS AN INCREDIBLY TOUCHING GESTURE AND MOMENT. HE MADE IT REALLY CLEAR THAT AS AN UP-AND-COMING BUSINESS LEADER, THERE ARE HIGH EXPECTATIONS OF HOW YOU WILL IMPACT THE CITY WE LIVE IN. AS WE LOSE OUR FELLOW CHICAGOANS LIKE ANDY MCKENNON TO OTHER PLACES IN THIS COUNTRY, WE LOSE THAT ETHAN'S OF WHAT HAS MADE CHICAGO SUCH AN INCREDIBLE SUCCESS STORY. AND I'M GRAVELY CONCERNED ABOUT
THAT. YOU CANNOT REPLACE THE WISDOM THAT THEY IMPART AND THE PEOPLE THAT FOLLOW BEHIND THEM. ERIK: LADIES AND GENTLEMEN, KEN GRIFFIN. [APPLAUSE]
2021-10-09 13:03
