Why billionaire Tom Barrack believes Trump can fix inequality
Editor’s Note: Yesterday, economics correspondent Paul Solman sat down with LinkedIn co-founder Reid Hoffman to discuss why he’s standing up to Donald Trump and urging others in Silicon Valley to follow suit.
Today, we have a conversation with Tom Barrack, CEO of Colony Capital and a Trump advocate. Barrack is a longtime friend of Trump as well as an economic adviser and fundraiser for the real estate mogul. Below, Barrack explains why he thinks Trump is the man to address economic inequality and “radical Islam.”
For more on the topic, tune in to tonight’s Making Sen$e report on the PBS NewsHour. The following conversation has been edited for clarity and length.
— Kristen Doerer, Making Sen$e Editor
PAUL SOLMAN: Your main reason for supporting Mr. Trump, besides being his friend, is economic policy, right?
TOM BARRACK: Yeah, his change. His progress. I have the blessing of having entrepreneurial DNA from my Lebanese heritage and the beauty and gift of American entrepreneurism. And that American entrepreneurism is bred in a transparent environment that offers opportunity to people who take risk at every level. And that road is quite complicated when it starts being intervened by rules and regulations and tax codes and legacy establishments.
And what happens over time is, naturally, the institutionalization of those establishments takes on a life of its own, and it starts crushing the very essence of what that capital program and plan was, the very fabric that holds us together. And as time has gone on and as I’ve gained wisdom and age, I noticed that most of us who participate in that sandbox don’t want to participate in the political process that creates the sandbox.
PAUL SOLMAN: You’re a very successful businessman. Do you feel constrained, encumbered by government bureaucracy in your business?
TOM BARRACK: I don’t feel constrained or encumbered. I don’t understand it, and it’s really simple. I make a payroll every Thursday night for the people who work for me. So I understand what the expenses are, what the revenues are, and I have to make it work. So I understand every line item of both of those entities. I pay taxes like we all do, and I couldn’t tell you what any of the line items are!
I couldn’t tell you what the Department of Commerce does, what the Department of Interior does, I don’t know what Office of Management and Budget does, I don’t know what I’m paying for in military defenses. I don’t know what a $20 trillion dollar debt is or what the difference between a $20 trillion dollar debt bill and a $30 trillion dollar debt bill is when it’s not backed by gold or silver or full faith and credit of the United States. So accountability is what it’s about. It’s not about whether it is harder or easier for me. It’s about accountability.
We have an unequal barbell society. The rich are getting richer, the poor are getting poorer, the middle class is evaporating. I see it every day in our businesses. So somebody has to intervene other than professional politicians who are paid to increase the bureaucratic morass of what everybody else is dealing with.
PAUL SOLMAN: But Mr. Trump’s policy with regard to, for example, taxes, would actually cut taxes more on the people who are on the the richer side of the barbell!
TOM BARRACK: Well, I don’t think it’s fair to say that. Right? The concept is that if you incent people to take risk, they will take risk. They’ll infuse more capital into the system, and at the higher end of that equation, that will eventually produce more growth, and growth will produce more opportunity, and the tax base itself will increase.
A single lower tax bracket, for years, starting with Reaganomics, was something that people thought was sensible. But to take the 180,000 pages of tax code and say, “Now we’re gonna equalize it across all the special interests who have so much invested in keeping it the way it is,” it’s not easy. And whether it’s Mr. Trump or whether it’s Hillary or whether it’s a follow-on, it takes congressional interaction, and it’s not simple. But it takes all of us on the outside, gently knocking at that door and saying, “It’s time to reexamine these things. Let’s do it.”
PAUL SOLMAN: “Conciliator,” you said of Trump in one interview.
TOM BARRACK: Yeah. Absolutely. So to do this, you have to explain to people what are the benefits and what are the detriments. And I think we’re all waiting for that next chapter. So I don’t think Donald is being harsh, I think he’s saying, “Look. You have two choices. You’ve had 26 years, basically, of what you’re listening to.” And the verbiage from Hillary, who’s obviously very qualified, very talented, and she can’t take blame for everything that’s happened that’s bad, and she can’t take credit for everything good that’s happened. But she’s been a part of the team, and a very competent part of the team.
So if you like that, vote for Hillary! You have Donald, who has no political background, but who has a very good background in being able to coalesce these constituencies, most of the time successfully, sometime not successfully, who is saying, “I will challenge that system, and I’ll bring in people who understand the system, but people who are not of the system.” And so to me, that’s the debate. That’s the dialogue.
PAUL SOLMAN: But is he a “conciliator”?
TOM BARRACK: Sure he is. I mean, if you look in this city and you think about the difficulty of building a Trump Tower or the West Side Yards or any of these projects, you start with a concept, and that concept then has a thousand arrows being shot at it by people in the environment — by the mayor, by everybody that you have to get a permit from, by the unions, by the contractor, by an architect, by the tenants. I mean, you have a hundred constituencies that you have to bring together, and then you have to be able to sell it to somebody who’s going to lend you the money! And then, you have to be able to lease it to somebody who is going to have to use it.
This consensual operation takes five or six years, and that’s just for a single building! Now you take that exponentially to the things that he’s done along a broad basis. Making deals and negotiations to me is where the United States is going to have to go in the next decade. We haven’t been good at it. He is a very good deal maker, he needs to learn some of the political process, which is what we’re criticizing him for.
PAUL SOLMAN: But he’s giving no indication that that’s what he’s like when he appears in public, at the debate, at rallies and so forth, right?
TOM BARRACK: I think a man who has the courage to say, “Look. Interpret it however you want. I’m not a political animal, so I make mistakes, I parry and thrust in all of these fabrics, take it for what it’s worth, and that’s who I am,” is refreshing! And I think a big segment of population looks and says, “It’s refreshing! The man is who he is.” He’s not anti-female. He’s not a racist, he’s not anti-Islam, he’s not anti-Semitic, anti-Hispanic, he’s not anti any of these things!
PAUL SOLMAN: He sure makes it seem, sometimes, as if he is! Certainly there are people who think he is, all of those things!
TOM BARRACK: Sure. But, for example, I’m an Arab American. I happen to be a Catholic, but I was raised with Shias and Sunnis and Druze, and he knows that.
He also has many Muslim partners. What he’s saying, which Muslims will tell you too, is radical Islam can only be solved by hope and tolerance and understanding and Islam self-enforcing the abrogation of radicalism. So rather than explaining it in those terms, that this is an attack against all Islam — we’re not going to take anybody who is reading the Quran and hold them in a holding tank for seven hours until we understand it — it’s more of a message to our friends, our allies and our partners across the Middle East. But, remember, the Middle East is only a tiny part. It’s only 300 million of that two billion in the world.
He’s saying, everybody has got to weigh in, and until we all weigh in and have a consensual process of how we fight this terrorism process, we’re gonna have a postage stamp up and just say, “Halt.” And you help us!
PAUL SOLMAN: But surely that’s not how it’s playing in America. I mean, in America, it’s playing to people who are afraid of terrorism, who are more afraid of Muslims as a result of what Donald Trump says, right? And who were worked up by what he’s saying. Am I missing something?
TOM BARRACK: No, I’m sure they’re worked up. I’m not so sure they’re worked up by what he’s saying. I think they’re worked up by the San Bernardino, by 9/11, by events that are caused by a process that they don’t understand, which are a few bad actors within the realm of a great religion that we know.
PAUL SOLMAN: But it’s stoked by him in the wake of those events.
TOM BARRACK: Yes. Because, I think what he’s doing is sounding alarm and saying, “This is critical. We need to get a handle on it.” By the way, the Arabs are saying the same thing. Many of my close friends are leaders of Arab countries — Sheikh Mohammed and Sheikh Tahnoon in Abu Dhabi, the Emir in Qatar, Sheikh Tamim, and Prince Mohammed in Saudi Arabia. They would all tell you that what they need in order to be able to help enforce against radical Islam is a consistent and predictable American foreign policy, which they have not had.