691. Is This What a “Good Billionaire” Looks Like?

David Rubenstein, a product of the old bipartisan D. C., made his fortune in private equity. He’s been spending it on “patriotic philanthropy” and institutions like the Kennedy Center, where Trump fired him as chairman. Now he wonders if the center can hold.

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  wireless plan for just 15 bucks a month, go to mintmobile.com/freak. That's mintmobile.com/freak. Upfront payment: $45 for three months, $90 for six months, or $180 for 12 months. Plan required. $15 per month equivalent. Taxes and fees extra. Initial plan term only. Greater than 50GB may slow when network is busy. Includes up to 20GB hotspot. Capable device required. Availability, speed, and coverage varies. See mintmobile.com. Freakonomics Radio is sponsored by US Bank Smartly Checking and Savings. You know, US Bank Smartly Checking and Savings are bank accounts that work harder for you. You get

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  better savings rates, fee waivers, and rewards from day one, so you spend less time worrying about money and more on what matters. Sign up for US Bank Smartly Checking and Savings today at usbank.com/smartly. Member FDIC. Copyright 2026 US Bank. For half a century, David Rubenstein has been part of the Washington establishment. He started out as a lawyer on Capitol Hill, then he worked on domestic policy in the Carter White House. But what made him famous and very rich was the Carlyle Group, a private

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  equity firm he co-founded in 1987 and where he is still co-chairman. Carlyle did not invent the Washington revolving door between government service and high-end finance, but it certainly capitalized on it, and Rubenstein thrived. And he came to epitomize a Washington that was relatively moderate and bipartisan. He spent many millions of dollars on what he calls patriotic philanthropy, helping restore the Lincoln Memorial and Washington Monument, for instance. He's bought rare copies of America's founding documents to put on public display, and he's given millions more to a vast array of educational, cultural, and civic causes, like the Kennedy Center for the Performing Arts, where he

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  was chairman for more than a decade, until recently, when that came to an abrupt end.

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  I'm the only person ever to be fired by a president and succeeded by him at the same time.

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  But even that doesn't seem to have shaken Rubenstein's faith in the American experiment. Today on Freakonomics Radio, is this what a good billionaire looks like?

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  This is Freakonomics Radio, the podcast that explores the hidden side of everything with your host, Stephen Dubner.

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  I like to think of myself as a fairly industrious person. I've written books, I make this show every week, and sometimes other shows. I run a little production company. I have a family, friends, stuff like that. But when I look at how David Rubenstein spends his time, I feel like a world-class slacker. Here is a partial list of the institutions where he serves as board chair, trustee, or director: the Council on Foreign Relations, the National Gallery of Art, the Economic Club of Washington, the University of Chicago, Johns Hopkins Medicine, Memorial Sloan-Kettering Cancer Center, the Institute for Advanced Study, the Brookings Institution, the World Economic Forum, the American Academy of Arts

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  and Sciences. Appointments like these often go to people who can write very large checks or persuade other people to write them. Rubenstein can do both. His Carlyle Group was at one point among the world's largest private equity firms, and it's still a heavyweight. Private equity has made a lot of money for its investors and its operators. It has also attracted a lot of criticism, including from this very show. It can be exploitative and extractive, and it takes full advantage of that cozy relationship between government and finance. For instance, the famous carried interest loophole that lowers the tax burden on private equity profits. I asked Rubenstein what he would do about that loophole if he could unilaterally change it.

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  Well, whatever I say probably wouldn't make that much difference because I've been a beneficiary of it. But in the end, I think it has helped the industry grow, but it gets more attention than it deserves because the amount of money that is involved with it is relatively modest. Most carried interest dollars are associated with the real estate industry.

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  As you can tell from that answer, David Rubenstein probably could have also been a diplomat if he wanted. In addition to his private equity and philanthropic work, Rubenstein also hosts a few TV shows on Bloomberg and PBS, interviewing CEOs and politicians and historians. I asked him why he does this, given the demands on his time.

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  The reason I do it is, one, I enjoy it. Secondly, I have a very inquisitive mind. My mother used to call me a yenta. I always ask questions. And I guess it's my anti-Alzheimer's device. When I do the intellectual sparring with a person, I have to keep my mind reasonably sharp.

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  Rubenstein has also compiled several books worth of these interviews. There's The American Story: Conversations with Master Historians, and The American Experiment: Dialogues on a Dream. He seems intent on reminding people about the America that was and how it compares to the America we've got today. He's just published a new book called Inside the Owner's Box: Conversations on Power and Leadership in Sports. Oh, yeah, I forgot to mention that in addition to all those other activities, Rubenstein recently became majority owner of his hometown baseball team, the Baltimore Orioles.

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  So it's very frustrating when you lose because you feel like you're responsible for it, but you can't really make many changes on it.

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  There have been a lot of headlines lately about sports owners behaving badly, often very badly. Steve Ballmer of the LA Clippers was suspended for a year by the NBA, and his team fined $30 million for violating salary cap rules. Mark Walter of the LA Dodgers is under federal investigation over billions of dollars in loans from insurance companies he controls to other businesses he controls. David Rubenstein, meanwhile, has cultivated a very different public image: the patriotic philanthropist, the civic leader, the good citizen. His name did turn up in the Epstein files because of a 2012 meeting between the two men at the Carlyle offices. According to a Rubenstein spokesperson, this meeting

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  was "at the request of people seeking Mr. Rubenstein's participation in philanthropic endeavors, none of which were pursued by Mr. Rubenstein." So what kind of people does Rubenstein spend time with? In his new book, he interviews more than a dozen other owners of pro-sports teams. The reviews are so far not very good. Here's what the Wall Street Journal had to say: "Mr. Rubenstein is apparently a better investor than an interviewer. His banal questions largely prompt anodyne answers."

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  Okay, so in this conversation, I will try to avoid banal and anodyne. Let's start by hearing about the differences between owning and operating a baseball team versus the firms that the Carlyle Group typically runs, like aerospace and healthcare and financial services firms.

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  Baseball team gets much more attention relative to its revenue than a normal company would get.

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  In your new book, you write about this interesting change that even though I've been around for it, I hadn't thought to summarize it the way you do, which is that in the old days, legitimate and responsible business people never used to be interested in owning sports franchises. That's a relatively recent phenomenon, yeah?

• 9:26Speaker 01

  That's correct. It used to be that business people you never heard of were the owners of sports teams, and they were not the equivalent of the Forbes 400. They just weren't. Then today, the multi-billionaires want to own sports teams. It's a big change.

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  Could you summarize how it was that sports became such a valuable activity?

• 9:45Speaker 01

  Well, in the 1950s, when I was growing up, there were relatively fewer franchises than there are today. Major League Baseball had far fewer teams. So did hockey. So did basketball, and so did football. And then people began to watch television much more. Today, for example, 95% of the most watched TV shows any given year are sports events, live sports events.

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  As I understand it, you grew up in Baltimore, a fan of the Baltimore Orioles, and a couple of years ago, you bought the Baltimore Orioles. I too was a baseball fan as a kid. In fact, I was a fan of the Orioles, even though I grew up in upstate New York. They were my team. And so it's hard for me to imagine what it must feel like to be the owner of the team you grew up loving. So what does that feel like?

• 10:28Speaker 01

  Well, it's a mixed feeling because on the one hand, I feel I am trying to do something to help Baltimore, and that was my real goal in trying to buy it, was to help re-energize Baltimore, which has done a lot of things for me and my family. But it's frustrating because I can't really make the players play better than they are. You know, I just can't go in and say hit better this way or pitch better this way. I don't have that capability. In upstate New York, one of the Orioles, a long time minor league franchises was there, Rochester. So that may have been a reason you liked the Orioles.

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  No, no, no, no. My reason was strange. I come from a big family. I was the youngest of eight, and my father had a rule that I think was made to make us all feel a little less poor, which was that every person had to root for a different baseball team. And so you kind of felt like you owned the franchise. And I was given the Orioles. I was born in 63, so I had a fantastic team during my childhood. I was always very grateful.

• 11:22Speaker 01

  Well, they were good. In 66, we won our first World Series, yes.

• 11:25Speaker 00

  In your new book, you write that every major deal nearly dies before it closes, and that your purchase of the Orioles was no different. So I'd love you to just walk me through from the beginning. When did you first get the idea? When did you learn that it might be available, et cetera?

• 11:41Speaker 01

  The family that owned it had owned it for some 30-plus years.

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  This is the Angelo's family, yes?

• 11:47Speaker 01

  The Angelo's family, a family from Baltimore. The father, Peter Angelo's, was a plaintiff's lawyer, very successful. He bought it out of bankruptcy. Eli Jacobs had owned it before, but he was over-leveraged, went into bankruptcy. He bought it out of bankruptcy, Angelo's did, and then ran it for 30-plus years. Toward the end, his son was running because Peter Angelo's had some health issues. There were rumors that the franchise might be moved to Nashville, or that it would maybe move somewhere else. And also, people weren't that happy with the performance of the team. And so from time to time, people would say to me, why don't you consider buying it? But I was just busy on other things, and I didn't think it was for sale. At one point, I did team up with somebody in Washington who owns the Washington Caps, the Washington Wizards.

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  Is that Ted Leonsis?

• 12:31Speaker 01

  Ted Leonsis. And so he made an effort to be the lead on it, and he negotiated, but didn't work out. Subsequent to that, the owner of the team, or the guy running it, John Angelo's, called me and said he knew I was interested in doing something with the team. He would like to meet with me, came to see me. He said, why don't you buy a minority stake in the team, maybe 10% or so? And I thought, okay, maybe I will. And then I said, I'd really like to have a path to control, because when you're a minority investor in a sports team, you don't have that much influence. You really can't effectuate things the way you might want. And so he thought about it, and then he called me back and said, yes, he would be willing to sell a path to control. We could work out all the terms, which is not that easy to do. We then spent several months negotiating back and forth with lawyers, investment bankers. And I thought the deal was going to probably

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  happen. But then at one point, I lost my temper. I wasn't happy with the way that negotiations were going, and I walked away from the deal. But then about two weeks later, we got back together again, and we closed the deal.

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  What did you lose your temper over?

• 13:29Speaker 01

  The investment banker on the other side was saying to us that we didn't understand an issue that related to the debt on the balance sheet of the Orioles. And one of my partners, my key partner, Michael Arigetti, is the person who runs the largest debt private equity firm in the world called Ares. And to say that we didn't understand debt was, I thought, somewhat insulting. So I just simply said, thank you very much. I'm out of here. I don't want to do this to you anymore. I hung up. Everybody was shocked, and they didn't know whether I was kidding or not, but I wasn't. At the time, I was pretty disgusted with the way they were treating us. But then in the end, I kind of came back and said, look, I have a rare chance to buy the team, and I'd like to do it. And so we went back, and we got the deal done.

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  Got it. So I read that you spent roughly 1.75 billion for the Orioles, is that right?

• 14:14Speaker 01

  That's correct.

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  Can you tell me how the valuation was arrived at?

• 14:19Speaker 01

  Yes. In baseball, you don't focus on earnings very much. In most corporate transactions, you're buying a company, you look at the earnings of the company, and you put a multiple on the earnings. So if it's a venture capital company, high growth, you might put a 15 or 20, or even 25 multiple on a company. If it's a low-growth, heavy manufacturing company, you might put a six to eight multiple on it. But baseball doesn't do that because there are no earnings. Virtually no team really has earnings because they're building towards the future.

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  I think a lot of people who go to baseball games, or football or basketball games, who pay really high prices these days for tickets and food and parking and all that, would be shocked to hear that a baseball team doesn't have earnings. Can you just talk me through how this model works? And I assume it works quite in contrast to the typical firm that you would buy with Carlyle?

• 15:07Speaker 01

  Well, when you are buying a typical firm, you want to make sure you have earnings, and ultimately, regular earnings, so that when you go to sell the company, you can show you've had a couple of years in a row of increased earnings, and presumably in the future you will as well. But in sports world, because the teams are privately owned, you don't tend to focus on what the numbers are going to be each quarter. You focus on what the revenues are going to be, and the presumption is that eventually the revenues will lead to earnings. But usually what happens is you make your money when you sell a team, not when you worry about the quarterly earnings.

• 15:41Speaker 00

  So the median Major League Baseball team is worth less than half the median NFL team. And yet, the NFL teams play only 17 regular season games, and you play 162. Have you looked at the NFL model and said, ooh, it sure would be nice, now that I'm in Major League Baseball, to reform our business model to make it more profitable, maybe with fewer games, et cetera?

• 16:07Speaker 01

  Well, it's a complicated question, but I would say the NFL has turned out to be the star of the professional sports leagues, because they fill the stadiums every game, and they have the highest TV ratings. Baseball is a different animal. Baseball doesn't have quite as big a TV audience, and it doesn't have quite the margin that professional football has in terms of television contracts. Baseball is probably going to try to reform itself. It's not clear that it will get done, but there are going to be negotiations at the end of this season to kind of figure out whether the business model can be changed.

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  I assume you'll be involved in that effort, yes?

• 16:44Speaker 01

  I really am not authorized to talk about what the negotiations are, because I'm not involved in it. And the commissioner and his top people are negotiating it. But the current agreement between the players and the owners expires at the end of this season. So the heavy negotiating will probably occur towards the end of this season, or shortly afterwards.

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  What is your view on the relationship between the payroll of a baseball team and their success? It seems not to be a very strong relationship historically. There have been many, many years where the highest-spending teams did very poorly. And occasionally, there's a very low-spending team that does well. The higher-spending teams, on average, do a little bit better. But why is it so hard to spend your way to success in baseball?

• 17:30Speaker 01

  Well, it's the same in life. Why is it that the wealthiest people are not the happiest people? It just turns out that, for whatever reason, just having money doesn't solve all problems in life, and it doesn't solve all problems in sports. Just having a high payroll won't necessarily produce the best team on the field, because sometimes players get injured or so forth. But in the last two years, the team with the highest payroll did win the World Series, the Dodgers. But then a couple of years ago, a team with a very low payroll, the Texas Rangers, they became the World Series champions. So it's episodic. I would say it's more likely than not, people will believe, analysts will believe, that a higher payroll will be better for a team in terms of its success, but it's not always the case.

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  I like the parallel, that the richest people aren't necessarily happiest either. I read that you're worth about $4 billion. I don't know if you want to comment on that?

• 18:20Speaker 01

  I really don't know what I'm worth. I really don't get into this. You know, I own some things. What's the Magna Carta worth? What's the copies of Declaration of Independence worth? What are homes really worth when you're not really putting on the market? So I don't really know. I just know that Elon Musk is a lot wealthier than I am.

• 18:35Speaker 00

  Okay, but my real question is, are you happy?

• 18:38Speaker 01

  Well, happiness is the most elusive thing in life. When Thomas Jefferson wrote the Declaration of Independence, he talked about the pursuit of happiness, and it wasn't quite happiness in the sense that I'm talking about it now. But happiness is elusive, and that's what everybody wants out of life, is happiness. And how do you produce happiness? The richest people I know are not necessarily the happiest people, and some of the poorest people I know are very, very happy. So am I a happy person? Relatively speaking, I'm happy that I got to where I got by some hard work and a lot of luck. But I'm always challenging myself, and I don't pat myself on the back and say, jeez, aren't I great? Because I bought this, own this. I'm always saying I could do better.

• 19:17Speaker 00

  What does it mean to do better? That's coming up after the break. This is Freakonomics Radio. I'm Stephen Dubner, in conversation today with David Rubenstein. We will be right back.

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• 21:58Speaker 00

  The closest that I've ever come to owning a sports team was when Freakonomics Radio sponsored an extremely low-level soccer team in England called Duncow FC. FC as in football club, Duncow being the name of the 16th century pub in Shrewsbury, where the team drank after their matches. I did visit the team once at the pub with my son, and we all had a nice kick around in the parking lot, but that was the extent of it. So yeah, not much ownership experience. I asked David Rubenstein what goes into running a club like the Baltimore Orioles.

• 22:33Speaker 01

  There are two aspects of baseball, or any sports team. One is the business side, where you're trying to make money, and there's the player side. We hired somebody who was a very talented baseball executive from the Seattle Mariners, Katie Griggs. She moved to Baltimore. She is now running the business side. And there, what the owners are trying to do is sell tickets, sell season tickets, sell sponsorships, get people to buy merchandise, buy food, do parking, whatever revenue sources there are, and television contracts and so forth. The talent side is run by a different group of people. In our case, Mike Elias, who is the head of baseball operations and often has somebody like a general manager working for him. In our case, we don't have a general manager. Mike Elias oversees all that.

• 23:16Speaker 01

  But these are the people that worry about who the players should be. They try to analyze who's the best player, what they're really worth, and so forth. It's much more scientific than it used to be. When the famous book was written, Moneyball, that book was written at a time that many people didn't realize that these mathematical models were being used, and the Oakland A's had a big advantage in it. But today, not so much, because almost everybody uses these same kind of techniques and mathematical methods.

• 23:39Speaker 00

  So that arbitrage opportunity is gone?

• 23:42Speaker 01

  It's diminished, because everybody's always trying, like in artificial intelligence, to come up with the next model. Somebody's always trying to refine it, make it better than the previous one. But by and large, everybody's using this to some extent.

• 23:53Speaker 00

  So have you seen anything that you consider cutting edge, whether it's on the analytical side, the physiological side, the strategic side, that you think is going to give teams a new type of advantage?

• 24:05Speaker 01

  I'm not close enough to say I have seen the future, and it's this or that. But I would say there's no doubt that artificial intelligence is going to change the way that all humans conduct their lives. And artificial intelligence methods will clearly play a big difference in how sports teams are analyzed and valued and so forth. But it's a little bit too early to say exactly how it's going to work.

• 24:25Speaker 00

  So different leagues in the US have different rules regarding who can buy or invest in firms, and they're changing kind of by the day. What is your view on, A, foreign ownership? And B, institutional ownership, whether it's a private equity fund or a big investor?

• 24:44Speaker 01

  Well, the NFL is a good example of what you're talking about. For a long time, the NFL had a rule, more or less, that you can have no private equity buyers. But what's happened in the NFL is that the prices have gotten so high that there are very few individuals who can afford to buy a football team. And so if you don't allow, let's say, an organization like a private equity fund to invest, you're going to diminish the prices that might be available. So the owners now say you can own, if you're a private equity fund, up to 10%, and you have to hold on for, I think, six years. And in some leagues, you can have sovereign wealth funds participate. I think basketball now allows, NBA basketball allows sovereign wealth funds to invest. I think hockey as well. Baseball, so far, does not have sovereign wealth funds investing.

• 25:27Speaker 00

  Let me ask you something else about Major League Baseball. What do you see as the biggest challenges? And I wonder whether you are at least feeding your concerns to Commissioner Manfred and hoping that there will be some things done to address them?

• 25:44Speaker 01

  The commissioner has been very open with the owners about what the challenges are. I think that there is a general sense among fans that everybody wants to have more of an even playing field. Whether that can be adequately addressed in the near future, I don't know. But that's what I think the biggest concern is. You want to have an even playing field. So out of the 30 baseball teams, you think at the beginning of the year, any one of them has a chance of winning the World Series. Right now, the surveys don't show that that's the case.

• 26:12Speaker 00

  Soccer leagues around the world have relegation promotion. So the weakest teams get flushed out of the league, and the stronger ones from the league below get moved up. They get promoted. Could you see that working in any of the major American sports leagues?

• 26:26Speaker 01

  That'd be tougher to do, because there isn't that tradition of it. And in effect, you're going to devalue somebody's investment. So I think it would be hard to do that unless you start it de novo. In other words, if you started today, I think it'd be something that probably wouldn't work. If you started de novo with a new league, maybe you can do that. But I don't think it'd work in baseball.

• 26:46Speaker 00

  Okay, this is going way out on a limb. But you know, with the NIL movement in NCAA basketball and football, name-image likeness, where players in college can actually get real money now, you could almost look at the top layer, at least, of the NCAA in football and maybe in basketball as essentially farm teams or just a league right below the NFL. Could you imagine a way in which there's some unification of those two leagues, NCAA, let's say, and NFL or NBA?

• 27:15Speaker 01

  I don't think that's not going to happen anytime soon. I think it's more likely that private equity funds and/or wealthy individuals will buy stakes in conferences and/or even university teams. I think it was reported in the press that the Big Ten was, at one point, thinking of selling a piece of itself. I don't think it got done. But I wouldn't be surprised if the SEC, which is a big football conference, for example, were to sell a piece of itself at some point to private equity funds or wealthy individuals. I think that's the next step, is likely to happen.

• 27:46Speaker 00

  Talk to me about how the legalization and proliferation of sports betting is changing. Let's just take baseball, your sport now. What's the Orioles' relationship with the gambling industry? And how do you see that playing out?

• 27:59Speaker 01

  I should point out that I am not a gambler. I made a bet on a baseball team in 1966. I lost, and I swore I would never bet again on a sports team. I never have.

• 28:08Speaker 00

  What was the bet?

• 28:09Speaker 01

  The Orioles were playing the World Series against the Dodgers, and the odds were 18 to 1 against the Orioles winning four in a row. Somebody in my class said, it's 18 to 1. I said, okay, I'll take that. The Orioles did win four in a row, so I lost. And I swore I would never bet again. So I'm not a gambler. But I would say there's no doubt that gambling has some pernicious opportunities, and you have to be very, very careful. Baseball is working very hard to make certain that the platforms are things that we understand much better, and we have a relationship with one of the prediction platforms.

• 28:42Speaker 00

  Is that Calci or Polymarket, one of those?

• 28:44Speaker 01

  Polymarket. But I would say betting is a complicated business, because today, it's not the way it was many years ago. It used to be the case that you would bet that somebody would win or somebody would lose. In the famous Chicago Black Sox deal, I think it was 1999, when some of the Chicago White Sox players, in effect, threw the World Series, and they were banned from baseball. Now they have what they call proposition bets, where you can bet on one pitch. And if you do that, it's much easier for somebody in any sport, if it's one play, than to have somebody throw a game or something. So betting is something that nobody has figured out quite yet, how to avoid the challenges of somebody making some money by being a player and throwing a pitch the wrong way

• 29:29Speaker 01

  or throwing a shot in basketball the wrong way.

• 29:31Speaker 00

  Are you concerned that sports betting generally has just gotten too big too fast? Because you don't have to think back very far to when a league like the NFL wouldn't utter the word gambling. They wouldn't say anything about point spreads or favorites even. They would never do an event in a place like Las Vegas. Now the NFL has a team in Las Vegas. They're sponsored by betting firms, as are all the other leagues. So do you think it's too much?

• 29:55Speaker 01

  There's certain things in life that are going to happen, and you can say you shouldn't allow these things to happen, but they happen. It seems that people love to bet in ways that defy the reality that the fact is that you're going to lose. Most people who bet don't get rich. Very few people have gotten into Forbes 400 by being a successful sports better.

• 30:15Speaker 00

  I think probably zero.

• 30:16Speaker 01

  Right, zero is the correct number. I think all professional sports have to figure out the best way to guard against improper activities. But it's not a thing that anybody has a simple answer to that's going to solve the problem tomorrow.

• 30:28Speaker 00

  There's a game that a friend of mine plays, which is you have a conversation with someone like you and I are having now, and you try to find the most unusual or unlikely thing that you have in common. And I found it with you and me, which was that I too am not a sports gambler because I too made a bet when I was a kid and I too bet on the Orioles in the World Series. I bet my dad in 1969 because he was a Mets fan. I bet 50 cents, which was much more than I had and I lost. So that kind of cured me.

• 30:57Speaker 01

  We both are obviously not great candidates for Gamblers Anonymous.

• 31:01Speaker 00

  That's right. Okay, let's talk about what it's like to be a billionaire at this moment. There is a lot of anti billionaire, a lot of anti, gosh, I guess I'd even say anti-success sentiment lately in this country. And when I look at your philanthropy, the scope of your philanthropy is astonishing. There are the national monuments, there are the historical documents, there's National Zoo, long, long this, colleges, universities, hospitals, cultural centers, et cetera. So it made me wonder, what has been your inspiration for your style of philanthropy? Are you trying to be the quote, good billionaire, maybe?

• 31:42Speaker 01

  There are many people giving away a lot more money than I am. I have a reasonable amount of money by normal human standards, but plenty of people are a lot richer than me and a lot of them are doing public philanthropy in better ways than I am. I decided the many years ago, when I did get financially successful, that I wanted to give away virtually all my money on the theory that if I give my children a good education, they don't need to inherit a staggering sum of money from me. And therefore, I wanted to give it away while I was alive. Bill Gates approached me about the Giving Pledge he was organizing. I agreed to do it. There were 40 of us at the beginning. And I tend to give money to universities that have been helpful to me or my family. The bulk of my money is actually in scholarships, which I think is a very effective way of giving money back to society.

• 32:24Speaker 01

  Hospitals, medical research are things I'm interested in as well, but that costs a lot of money to have a big impact. The thing that I may be best known for in the philanthropic area is what I've called patriotic philanthropy, which is to say restoring monuments, preserving documents, things that are going to remind people of our American history, on the theory that if you don't remember the past, you're condemned to relive it. We don't teach civics very much anymore. And so my little contribution here is to try to remind people of the history. I have many rare copies of the Declaration of Independence, but I've had replicas made and given one to every Major League Baseball owner. I've given one to every foreign embassy that the US government has around the world, to have them display it in all of our embassies. Well, just to hope that people, when they walk by it, they will see the Declaration of Independence and hopefully think that they will learn a little bit more about it. Maybe

• 33:08Speaker 01

  they'll be inclined to learn more about it and just make themselves a better citizen.

• 33:12Speaker 00

  Coming up after the break, let's talk about good citizenship. I'm Stephen Dubner. This is Freakonomics Radio. We'll be right back. Freakonomics Radio is sponsored by ChatGPT. With ChatGPT, you can do more than get answers, you can get things done. When you're running a business and looking to expand, you need a clear view of the landscape. Before making any decisions, ChatGPT can help you prepare. Connect your Google Drive, point to relevant files and reports, and ask it to research

• 33:53Speaker 00

  competitors, industry forecasts, and market signals. It can turn the findings into a strategic deck in your team's template that you can review before presenting to your leadership team. Growing a business is ambitious and ChatGPT can help you do it with confidence. Get started at chatgpt.com. Available with all paid ChatGPT plans. Freakonomics Radio is sponsored by Southern New Hampshire University. There's no hiding how convenient Southern New Hampshire University makes college. They offer over 80 career-focused graduate programs online. Classes have no set meeting times, so you can balance life

• 34:35Speaker 00

  and learning, and online tuition rates are some of the lowest in the country, making it all a little more manageable. A school this willing to work with you is worth the investment. Visit snhu.edu/freakonomics to learn more. Freakonomics Radio is sponsored by Progressive. Whoever says saving money is hard doesn't know that new customers who bundle and save with Progressive save hundreds because switching your home and auto insurance is better than cutting down on the things you love, like those iced lattes that help you get ready to face the day. So switch your home and auto to Progressive and see if you could save and keep sipping away. Get your quote

• 35:15Speaker 00

  today at progressive.com. Progressive Casualty Insurance Company affiliates and other insurers. Not available in all states. We're back with David Rubenstein, private equity operator, Washington insider, author and interviewer, baseball team owner, and patriotic philanthropist. He says that he is as surprised as anyone that it worked out this way.

• 35:50Speaker 01

  Nobody in my high school class will remember I was there. Nobody in my college class knew I was there. Nobody in my law school class knew I was there. So I just got lucky in life.

• 35:58Speaker 00

  I'm curious if you feel competitive with fellow billionaires who also practice patriotic philanthropy?

• 36:07Speaker 01

  No, not at all. The more, the better. I mean, I'm not trying to win any awards. I've got enough awards. I don't want any more. I got everything I need. I'm just really trying to give back to society. I got very lucky in life. My parents were not college educated. They weren't even high school educated.

• 36:21Speaker 00

  Your dad worked for the post office.

• 36:23Speaker 01

  He didn't finish high school. My mother didn't finish high school. I grew up in an 800 square foot house, no air conditioning, no backyard to speak of. It was just a very modest setting. But in the end, the people that often become successful in life are people that come from blue collar or lower middle class backgrounds because they have an incentive to work hard and make something of themselves. The bigger challenge is to grow up in a wealthy family is as we all have seen, the children of very wealthy people sometimes don't achieve that much. And that's a burden that my own children have. They've grown up in a relatively wealthy family. And can I motivate them to actually do something with their lives? I've tried to do that. We'll find out how successful they are down the road.

• 37:01Speaker 00

  Let's talk about the political realm and especially the fact that there was a period, what you might call the Great Moderation, going back a few decades when you were in government, including in the Carter White House, where there was a huge sense of mission and bipartisanship that produced legislation in civil rights, environmental areas, tax reform, many, many, many areas. And we're not there anymore. Now, you've written a lot of history. I'm curious how you think about the current era compared to the past? Was that a kind of blip of a golden era and now we're back in the norm? Or is this more of an aberration?

• 37:37Speaker 01

  Well, nothing as bad as we had during the Civil War, when there were 65 times where members of Congress attacked physically other members of Congress on the floor of the Congress. And we're not quite there yet. But what's happened is we've gone away from bipartisanship being a virtue that people applaud. And as a result, members of Congress really are not so bipartisan anymore. When I worked on Capitol Hill briefing in 75 and 76, the case was that if you're a good legislator, you were able to get people to work from both sides and get legislation passed. Today, that's gone away. And today, members of Congress are very, very partisan and they don't like to be seen socializing with people from the opposite party or even talking to them in some public way. I did start a dinner about

• 38:20Speaker 01

  14 years ago for members of Congress only. I interview a great historian in front of members of Congress and it's not open to the press. And I asked members to sit with people from the opposite party and get to know them. And so it's worked pretty well. Bipartisanship is kind of an archaic concept these days. And the reason is money. We have no limits anymore on how much money you can give to a politician, essentially. And politicians generally have the view that whoever raises the most money will win. So they have a great incentive to raise the most money as possible. It takes an enormous amount of their time. You don't raise money by saying, I'm going to Washington DC and do something right down the middle. I'll see what makes the most sense for both sides. You raise money by being on the far left or far right, unfortunately. Politics and money is corrosive. And if it's limited, I think it would be the best thing you could possibly do. Now, under our constitution,

• 39:05Speaker 01

  you'd have to change it because the Supreme Court has ruled in several occasions that money is in effect speech. So you've got to change the constitution and that's difficult to do.

• 39:13Speaker 00

  I'm sure you know the line from Yates, "The center cannot hold, things fall apart." Do you think the center can and will hold in the US?

• 39:20Speaker 01

  I'm not sure. Time will tell. Right now, it's clear that we have a somewhat dysfunctional system. Think about this. If you control the House of Representatives by two votes, if you flew in from Mars and you observed this situation, you would say, well, one party controls the House by two votes, they should clearly compromise with the party that only has two votes less because that would be a sensible thing to do. But we don't do that. Both parties, if they control the House or the Senate by one or two votes, act as if they control it by 20 votes or 30 votes or 40 votes.

• 39:50Speaker 00

  So let's pretend that I just flew in from Mars and I don't know anything about your US president. Tell me a little bit about him.

• 39:57Speaker 01

  Well, Donald Trump was a real estate developer in New York who was not thought to be a likely candidate to be President of the United States. But he ran, he had 16 other people he ran against. And then to the surprise of, I think, himself and his family and everybody else running, he beat the other 16, got to be elected president. He had some challenges, impeached twice, not convicted, but impeached. And then when he lost the election in 2020, he went back to Florida and kind of like Napoleon went to Elba. People thought they wouldn't hear from him again. He came back and to the surprise of many people, got reelected again. And so he's a different character than most people have been President of the United States. Almost every person who's been President of the United States before Donald Trump had some experience in government. Donald

• 40:41Speaker 01

  Trump, when his first term, had no experience in government. Now, he's obviously had more experience. But it's a phenomenon that wouldn't have been predicted.

• 40:47Speaker 00

  How do you rate or assess his performance, his behaviors, his adherence to governing norms?

• 40:56Speaker 01

  Well, that's a more complicated question. I would say there, you know, and people will say that anything I say about him may not be unbiased because I was chairman of the Kennedy Center for 14 years and

• 41:08Speaker 00

  You were defenestrated from that, yes.

• 41:11Speaker 01

  I'm the only person ever to be fired by a president and succeeded by him at the same time. So he took the job that I once had. I've known him for a while. I've interviewed him several times. He was very nice to give me interviews.

• 41:22Speaker 00

  I remember you interviewed him, I believe, right as he was thinking about running in 2016, yeah?

• 41:27Speaker 01

  It was the Economic Club of Washington. It was, I think, December of 14. And he asked me to ask him if he was going to run for president. And I said, President of what? He said, President of the United States. I said, Donald, you're not going to be President of the United States. And I think he said something like, I know, but you know, help me for a while, help my brand or somewhere. I don't really believe that he felt he would be President of the United States. He may disagree with that now.

• 41:48Speaker 00

  So from what I can tell, you mentioned the Kennedy Center, which you chaired for more than a decade, then you were replaced by Trump. From what I can tell, you've always been politically neutral or bipartisan. But now it seems when something like that happens that you get cast as a sort of infidel. You've also supported and championed the Smithsonian, which is under fire from the right for being infected with a woke ideology. What's curious to me is you are the kind of person who is, or at least was, very much a part of the establishment. And then all of a sudden, there's a president who upends the establishment. What's that feel like for you?

• 42:26Speaker 01

  Well, I was the chairman of the Kennedy Center for 14 years. I was chairman of the Smithsonian for, I think, the three years. I currently am chairman of the National Gallery of Art. I'm also chair of the support board for the Library of Congress. I don't give money to politicians. I just believe that if I make a political contribution, I'm going to get in trouble. Somebody's going to say Carlyle is getting some benefit out of it. Or some politician says something that I don't agree with, and people are going to say, how could you give money to this politician? Look what he said. So I just avoid it. And people therefore don't bother me anymore for political contributions, which is good. Am I a member of the establishment? I don't ever feel like I'm a member of the establishment. Clearly, I've had some senior positions. But generally, they're all nonprofit kind of positions. And you don't get that kind of power from a nonprofit job.

• 43:06Speaker 00

  But that said, these institutions that you have been and are still associated with, they are large, wonderful, longstanding institutions in culture and adjacent to politics occasionally. And plainly, the notion of the institution right now has been turned on its head in a lot of ways, universities and

• 43:26Speaker 01

  It's true. I chaired the University of Chicago Board. I did chair the Duke University Board. I was on the Harvard Corporation for six years. These are institutions that I strongly believe in. The Smithsonian is a good example. The money came initially from a British citizen. The organization was set up in the 1840s. And today, it runs 19 museums and about a dozen research centers. And I think it's a great source of pride to many Americans. It's been under attack, I think, unfortunately. All the former chairs of the Smithsonian have sent a letter to Congress saying that we really support what the Smithsonian stands for.

• 43:57Speaker 00

  Can you tell us how you were fired from the Kennedy Center chair?

• 44:02Speaker 01

  I saw the president after he was elected president. Second term, I was in a place and he happened to be there. He said he wanted to talk to me about the Kennedy Center, but we didn't have a chance to talk at that particular time. And I didn't follow up with him. I didn't want to bother him about the Kennedy Center. I didn't think it was that important to him. I had agreed to step down as the chairman of the Kennedy Center after 14 years. I thought that was enough time. And I was going to be succeeded by somebody who was pretty close to Kamala Harris. And when she didn't win the election, this person who was going to succeed me decided this person didn't want to be the chair of the Kennedy Center. So the board asked me to spend another two years there as the chairman. And then I agreed to do it. I don't know whether President Trump knew that or not. But there was a press release that went out saying that the entire board was being removed, or

• 44:45Speaker 01

  most of the board was being removed, including the chairman. My name wasn't mentioned. President Trump told somebody, I think that he thought I'd already retired as chair. But whatever the case, he did invite me to come in and talk to him about it. I did see him afterwards. And, you know, he'd already made his decision. I wasn't trying to talk him out of it. The Kennedy Center has been something that was a great organization for the country and very bipartisan. And we always operated on a bipartisan fashion. And it's had some challenges lately, for sure.

• 45:12Speaker 00

  Is it fixable?

• 45:13Speaker 01

  I think the American people will support making changes that will make it what it once was. But clearly, there's some challenges right now.

• 45:21Speaker 00

  The person who was lined up to replace you, I believe, was Lorene Powell Jobs, yes? Steve Jobs's widow?

• 45:27Speaker 01

  Um, I don't know if I should say that myself, but I would say

• 45:32Speaker 00

  I mean, I believe I read it in the Wall Street Journal.

• 45:34Speaker 01

  You know, I'm not going to say it was or wasn't, but that's, you know, anyway.

• 45:46Speaker 00

  You've written about many past presidents. Do you think you'll ever write a book about President Trump?

• 45:51Speaker 01

  Probably not. I think there are enough people. I've read a lot of good books about him recently. I don't think I have anything to add.

• 45:57Speaker 00

  How do you feel that the historical separation of powers in the US government, executive, judicial, and legislative, is holding up?

• 46:06Speaker 01

  The federal district court judges have done an extraordinary job of standing up to the pressure that they've often felt recently. I think they really deserve a medal for what they've done. Because against great odds and political pressures, they've really stopped a lot of things from happening that probably shouldn't have happened. So I think separation of powers is working to some extent, but not perfectly so. I'd say that the Congress has largely been controlled by what the president wants to do the first year and a half of this second term. Whether they'll continue or not depends on the midterm elections.

• 46:38Speaker 00

  The theory that I've heard is that the president has accrued a lot more leverage over the past, the role of the presidency has gotten more powerful over the past 30, 40 years, let's say, in part because Congress has delegated so much decision making to the president because Congress is overwhelmed, because legislation is really complicated and takes a long time. And sometimes it's easier to just kick it over to the boss in the White House. Do you buy that argument?

• 47:03Speaker 01

  It's true to some extent. But I remember when I worked in Capitol Hill briefly, I didn't think we had enough expertise to figure out how to do all the things. We put something in legislation and we'd say, well, they'll figure it out downtown because they have all the expertise. When I went to work in the White House, we'd say, well, we don't have enough expertise in this. We'll send up to Capitol Hill and they'll figure it out in the legislation and they'll fix it.

• 47:25Speaker 00

  That again was David Rubenstein, principal owner of the Baltimore Orioles and chairman of pretty much everything, including the Carlyle Group. By the way, his Orioles had a pretty poor season, finishing fourth in the AL East, three games under 500. On the bright side, Rubenstein recently bought a big abstract sculpture called Blue by Joel Shapiro that used to stand outside the Kennedy Center. And he is having it moved to the National Gallery of Art, where Rubenstein is still chairman. And one more note, a few years ago, we published an episode involving the Carlyle Group called Our Private Equity Firms Plundering the US Economy. We are now updating that episode and we'll replay it

• 48:07Speaker 00

  for you soon in case you were looking to learn more about how Carlyle and the private equity industry operate. If you want to let us know what you thought of this episode, or if you want to ask us anything at all, our email is [email protected]. Coming up next time on the show.

• 48:25Speaker 04

  I think that there are going to be thousands of different AI species, different varieties of minds.

• 48:31Speaker 00

  We start a two-part series about AI and creativity. As you can imagine, there are sharply contrasting views.

• 48:40Speaker 05

  It is like an industrial revolution. I feel so privileged to be living through this era and to see it all. It's fantastic.

• 48:49Speaker 00

  It's obvious that it's a threat. And it's obvious that it will cost people jobs. And we interview an AI performer.

• 48:56Speaker 06

  I mean, I don't get jet lag and I can be in 16 places at once.

• 49:02Speaker 00

  That's next time on the show. Until then, take care of yourself. And if you can, someone else, too. Freakonomics Radio is produced by Renbud Radio. You can find our entire archive on any podcast app. It's also at Freakonomics.com, where we publish transcripts and show notes. This episode was produced by Pete Madden and edited by Gabriel Roth. It was mixed by Jake Loomis with help from Jeremy Johnston. The Freakonomics Radio Network staff also includes Dalvin Abwaji, Claire Keenan-Kurgan, Eleanor Osborne, Ellen Frankman, Elsa Hernandez, Emma Kaisner, and Teo Jacobs. Our theme song is "Mr. Fortune" by The Hitchhikers, and our composer is Luis Guerra. As always, thank you for listening.

• 49:47Speaker 01

  So I'm the chair of the board of the University of Chicago.

• 49:49Speaker 00

  Okay, which board are you not the chair of?

• 49:51Speaker 01

  If you want to be the chair of that board, you can be the chair of that one.

• 49:59Speaker 02

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