One of the things you have to be worried about is you get the collective biases of the people you hang out with. So when you're hanging out in a middle class or lower middle class group of people, you have their biases, you have their feelings about the world, and then all of a sudden you have the financial flexibility and some level of financial independence. And then you start thinking, okay, well, everything's okay. While I was doing that, and perhaps you were doing that, there's a very large group of people that got shifted into downward places related to jobs, related to wages. It turns out that middle class wages have shrunk. It took me getting my ass kicked on the Donald Trump campaign and doing 71 campaign stops around the country to see that, because I grew up in a neighborhood like that. But I didn't realize how blighted some of those neighborhoods had become.
I'm Michael Monahan with Founders and Friends. Today we have Anthony Scaramucci. He's the founder of SkyBridge Capital, the SALT Conference, a former Goldman Sachs managing director, had a brief stint as the White House communications director, and even has a unit of time measurement named after him. We're going to talk about his book, All the Wrong Moves, and a lot of other great ideas. Anthony,
Well, you did promote me though, Michael. I appreciate that. I left Goldman as a vice president. I never made it to MD, but thank you for the promotion. That would have been nice, actually.
You probably deserved it. You probably should have had that promotion.
I don't know. I don't know about that. It was a little bit of a renegade.
All right. So, a lot of times on this show, we reflect usually with an investment question, but I think in your case, a life philosophy question. What did you believe deeply 30 years ago that 30 years of reflection, you now believe the exact opposite?
Such a great question. But I am going to start with an investment answer though, if you don't mind. Buy good quality things and hold on to them. Every mistake that I've made as an investor was selling something that I should have never sold. Apple computer, Microsoft, I could name the companies, you know, just buy good things and put them away. You know, Warren Buffett was right. That would be my reflection on 30 years. As an investor, as a life lesson, I would say that I worried too much and I was, you know, things that seemed like such a big deal at 35 were not a big deal at 45. They were not a big deal at 55. Guess what? They were not. I'm about to turn 63. And I would say worry a little bit less. Like go with the flow a little more.
I think that's a good philosophy. And it sounds like that's kind of how you're living your life right now in the moment is pursuing the things that are interesting to you.
Yeah. And I think it's more enjoyable and it's a little bit more relaxing and you're not overthinking everything. I guess I had very high anxiety as a startup founder. When I left Goldman Sachs in December of 1996, I literally gave myself like a flu from the anxiety of starting my own company. And then, believe it or not, I sold that company successfully and launched SkyBridge almost 22 years ago in 2005. And I had the same level of anxiety. Michael, I would like to say that I was like a smooth character, but I was pretty, you know, ratcheted up. And so I wish I, looking back on it, I probably didn't need to do that, you know, and somebody said to me once in a while you have to hit control alt delete for your brain, you know, just pull your brain out of the wall and let the computer reset. And so I try to do that more.
And what do you do to help reset these days?
Well, you know, I try to hit the gym. I used to run a lot, but my knees are killing me, so I can't run anymore. So I'm more of a walker and a hiker. I spend a lot of time reading. I spend time writing. I think writing can be very therapeutic. I think if you want to really learn something, how about writing a book or teaching a course on something? You feel like you learn more doing that stuff than sitting in a classroom or reading a book. You actually learn more writing a book than reading one.
I had a conversation with Barry Ritholtz recently and that was his view is that writing really helps clarify. And then I think maybe it's the reps, like you've got to a point now where you're calm. You have these reflections, but was it going through all the reps that helped you get to that point?
Yeah. Again, you're a really generous guy. I don't see myself as that calm. I mean, pretty self-aware, I see myself as calmer. I would like to be super zen and super calm. I'm Italian, so I don't necessarily think that meditation works for Italians. I mean, I did try it, but I'm like too distracted to really meditate properly. But, you know, I would say the good news about where I am now in my career is I like the position of helping people. I have a lot of young people that work with me at SkyBridge. I like the idea that I can mentor them. I have five children, three of which are adults, in their either late 20s or early 30s. I feel like I sort of feel like I'm a better father now than I was 25 years ago.
And do you think that's your number one goal at this point is to be a great father or the best you can be at least?
Yeah. Well, it was always a goal, but the problem is when you come from no money and you have money anxiety and you're trying to make money for your family and pay off your school debt. I say I became a better father once I was able to get sort of that financial anxiety and that responsibility behind me. But I think that's always been a goal.
Yeah. With that, maybe we'll get into some of the book and I want to remind people that Anthony's been generous enough to sign a couple copies for us. And so we're going to, at the end I'll talk about how we're going to give a couple of those away. You're obviously wildly successful and literally the great American success story. Your dad was a union guy, you worked your way up, went from there to Harvard Law School, Goldman Sachs, SkyBridge, SALT's probably one of the most innovative conferences in the world. You built all that and you had all this great success, but what I read in the book is in that time period there were economic decisions in the background that maybe were stacking against the everyday American. What did we miss observing during that time period?
Well, listen. I mean, for you, for Wall Streeters, you know, when people have funds, it's been a very good time. We've been in basically a 35-year bull market. We had an interruption with the global financial crisis, but generally we've had a pretty good run since the day I left law school, which is 1989. So Wall Street's done just fine. I also think one of the negatives, one of the things you have to be worried about is you get the collective biases of the people you hang out with. You and I both worked at Goldman, so you know, it's an exciting job, but it's also very well-paying. And then all of a sudden, you have the financial flexibility and some level of financial independence. And then guess what you do? You start hanging out with people that have that. And then you start thinking, okay, well, everything's okay. And what I tried to explain in the book, while I was doing that, and perhaps you were doing that, there's a very large group of people that got shifted into downward places related to jobs, related to wages.
It turns out that middle class wages have shrunk
or been flat over the last 30 years.
Lower middle-income wages down. Lots of things happened. I mean, one of the things I blame is the decision to let China into the World Trade Organization. No problem letting them in. Respect China. I definitely think we need to have harmony with them. And I'm happy to have some level of economic interdependence with them if that will help us keep peace and grow prosperity, but I think we should have been more careful about monitoring them. You know, we thought that they were going to open their markets to us. They really didn't do that. And then we thought that they would sell goods and services into the United States cheaply, which they did. And then that would cause a transition effect for our workers, which it didn't. And so one of the big things that happened to us in the 90s, we got very overconfident. We had the budget under control and we were making a decision to integrate China into the global economy and we were very smug about that and we probably needed to check them more. You know, we probably committed some political malpractice by not... when they came in, they were treated like the Dominican Republic. You know, they could sell their goods and services to us and we had to accept their tariffs, but when they got to the size and scale of say the UK or Germany, we probably needed to treat them like the UK or Germany and that caused a problem for the American worker. Something I didn't see, by the way, I would point out it took me getting my ass kicked on the Donald Trump campaign and doing 71 campaign stops around the country to see that. And it doesn't reflect well on me because I grew up in a neighborhood like that, but I didn't realize how blighted some of those neighborhoods had become.
Yeah. I mean, I think that's the experience of the reps. And same thing, I'm a decade behind you, but when I was sitting on the Goldman Sachs trading desk, I believed capital efficiency and all these spreadsheet-driven... can we say a bad word? It's my podcast. Yeah. And then you start thinking about it's not about what looks good in a spreadsheet, it's what's good for the longest term, good for the workers.
And all this spreadsheet math was kind of... And so one of the great things, we don't have to diverge too far, but like all this stuff that Elon's bringing back with bringing back manufacturing, I think is going to be very good for the American worker. At least I hope so.
Yeah. And it'll be different as he points out. There'll be some more automation. There'll be more robotic technology. I think I like his vision of AI, frankly, when I hear him speak about it. The notion that we could have AI help people get better educations or you could have AI as a tutor in math or science or reading. And there's a whole world of abundance ahead of us.
Yep. If we can manage our politics, if we can try to stay out of wars, which, you know, America has been at war, I guess, my entire lifetime. I mean, there are maybe months of patches where we haven't had a war, but we're more or less in a permanent war. And I would rather spend that money on infrastructure and education and rebuilding the bridges, roads, and tunnels of the country than dropping bombs on people.
I agree completely. I mean at one point in one of my old companies we had a contract manufacturer in China in Suzhou and you would fly over there and the modernness of the trains, of the airports.
Well, we were spending money dropping bombs. They were building beautiful high-speed trains. They were building beautiful airports. Yeah.
And so, you know, I kind of look at that 20 trillion or 30 trillion pile that we've piled up and just can you imagine if we'd been building infrastructure with that, Anthony, the jobs we would have had for people.
Well, yeah, because it's a huge multiplier effect. I'll use Boston as an example. So, when I left Boston, they were starting something called the Big Dig. And the estimate when I left school was about five billion dollars. I left in 1989. The project was supposed to be complete in 1994. I think the project got finished in like 2013 or some crazy number like that. It wasn't five billion, but it was $21 billion. And so everybody said that was ridiculous. Too much graft and corruption and so on and so forth. But when you really did the externality test, the infrastructure investment led to about 140 billion dollars of positive economic externality to the area and it made it easier to commute from farther distances and it made it easier for people to get in and out of the airport and the towns around Boston grew. The housing prices grew. There were more small businesses that moved into the towns. And so when you spend money, even if you spend money on infrastructure and you think it's going to be five billion, it turns out to be 20 billion, it's still worth it, you know, and we don't do enough of it. And one of the reasons why we don't do enough of it is we've been focused on these wars. And frankly, the situation that happened 25 years ago, the great tragedy of 9/11, and our reaction to it, I think has put us in a little bit of a jam. When Bill Clinton left office, we had a $5.8 trillion national debt.
So you went from George Washington to Bill Clinton, 5.8 trillion. And you went from George Walker Bush to two Trump terms, an Obama two-term presidency, and one term of Biden. And it's just a staggering amount of money. It's 34.5 trillion dollars. And to me, I think it's, you know, listen, we got a great economy. We have taxing power. Rates have gone up, but they haven't gone up astronomically primarily because people still believe in America. But we got to calm this down. We got to create more fiscal discipline.
Yeah. Maybe you could explain how these deficits are a hidden tax on the working class. Maybe walk people through what you've observed.
This is astonishing because the president, President Trump gave a speech to Time magazine and he said, 'Well, one of the ways we can pay off the debt is massive inflation.' But the problem with that is that you kill the working class. And so if you or I own a house, let's use this, it's a great example. Calvin Klein in 1987 bought one of the DuPont heirs' homes in East Hampton, New York. Beautiful house on the ocean.
He paid I think around $4 million.
He sold the house 30 plus years later. I guess it was 2019. Okay. He sold the house and he sold it for $85 million.
The house is listed today for $165 million. So here's the point. If you own assets and the government's inflating the currency, then the assets are going to go up pursuant to the devalued currency. But let's say you're somebody like my dad where you have your time and your energy, you're working a crane, you get an hourly wage, you don't own any assets, but the US dollar, and I'm not making this up, people could look it up. If you go to truflation.com, just in the last six years, the US dollar's lost 23% of its purchasing power.
So, if you take somebody like my father, you give him the $1,000, you've destroyed the guy. He only has $770 worth of purchasing power six years later and the people can't catch up and they're very, very upset and they get very, very angry. So what happens is you run up a big deficit like that, the government typically monetizes the deficit because they don't want to raise your taxes and so they have this pernicious regressive form of taxation that's called inflation. Now, here's the thing about inflation, Michael. The average person doesn't really understand it because if I buy the house like my parents did, they paid $16,000 for the house that I grew up in in 1962.
Okay. Zillow, the estimate, my mother's still living there. The estimate for the house is $783,000. So, my parents think they made a lot of money.
But when you inflation adjust it, they didn't make money. And I tried to explain this to my mom. She got really mad at me, but I'm going to explain it to you. If you bought my mother's house in ounces of gold
it would have cost you, it was $35 an ounce, would have cost you 450 ounces of gold.
Today, at that Zillow price, because of where gold is now, you know, gold's like 4,500, 4,600 an ounce, it's 250 ounces of gold. So, Mom, I know you see the nominal number went from 16 to 783, but the value of your house actually went down when you adjust in gold terms.
And when you adjust for inflation. Now, she gets super mad at me about that, but I'm making this point because it's easy for the politician because the working-class people don't really jive into and pulse on what's going on with the money. They actually think they're inflation-adjusted rich if that makes any sense.
Yeah. I mean, I think it's something I've been observing for a long time. And you talk about empathy as one of the qualities in your book. Why is empathy so important?
Well, because once you have it, and you know, sometimes we grow distant from it, but once you have it, you can start to feel for other people. And when you feel for other people, you can start to figure out a way to make way for them and to help them. You know, a sociologist by the name of Dunbar, he said that we are genetically wired to be able to build relationships and interact with about 150 people. Okay? So, the problem with that is you got 8 billion people. Okay? So, if I take this plastic bottle and I throw it in the air, I'm like, 'Oh, what's the big deal? I'm one person. This is wasteful. Who cares?' But it's actually having a tangible effect on the other 8 billion people because if each person did that it would be deleterious to the environment.
The tragedy of the commons.
Exactly. So I feel we got to have a little more empathy for each other. And I feel we have to recognize that this thing is splitting now between the super wealthy or the very wealthy and the working class that are going in this direction and they're going to grow very dissatisfied. They're going to get angrier and angrier. If you think we have anger-based populism now which is represented by the democratic socialists on one side and represented by MAGA on the other, I'm telling you it's going to get worse.
You're a solutions guy. What would be your solution to try and fix some of this?
I feel like I've been such a great beneficiary of the country. Got a good education. I got to work at some great organizations. I was able to create a life for myself and my family. And I want to make sure that I want people to believe that we can do that for other people. And so the point of writing the book is how do we get here? Here are some things that we did. And again, the book isn't picking on anybody. It's just looking at the world and saying, you know, we had some very smart people. Smart people can make bad decisions. Smart people can expect certain outcomes and then the outcomes go the other way. And so I am a solution-based person. And the first thing you'd have to do is you'd have to corral the spending. You don't want to DOGE it. I don't think you need a chainsaw to it. I don't think we'd have to be crazy because that'll touch off a recession. It'll create a contraction in the economy. But you could go back to the Clinton tax rates where the rich have to pay a little bit more money and there are spending controls on the Congress. And if you did that for about 15 years, you'd save 10, 12 trillion dollars. You still have a deficit, but your deficit would be way more manageable. It would go from 100% of the debt. Again, I'm not counting the Fed. What you don't want to do is go from 100 to 200.
Yeah, which could happen and then that causes a crisis and could potentially even cause a crisis for the US dollar.
Yeah, I think your proposal even if we're not making an immediate impact, it's the derivative. It's the signal that it would send to the long end of the curve and some of these other financing mechanisms that we're moving in the right direction, not the wrong direction. Anthony, one of the observations you made was that the trade globally was well-intentioned but had unintended consequences. I think AI has great benefits. I'm an AI maximalist. What lesson did we learn so that maybe we can foresee some of those unintended consequences to help workers as we're transitioning?
Well, I mean, you know, I don't think we learned the lesson. That's the irony. Okay. The lesson should be that if you have an atom bomb and you dropped two of them and you killed a half a million people and irradiated another million people and it caused, you know, countless innocent deaths, but after those bombs were used, people looked around and said, 'Okay, we can't use these bombs. This will end the civilization.' Yes. And so we took great care with atomic energy and we took great care with atomic bombs and we've done a knock on wood, I don't want to jinx us, but we're 80 years out from that or 81 years out from that and we haven't had a catastrophe. And one of the reasons why we didn't have a catastrophe is we teamed up with each other. You know, whatever you think of the Russians, whatever you think of foreign adversaries, we're like, you know what, we like our children, you like your children, can't use the bomb. And so we didn't use the bomb. And so I would put that overlay on AI. I would be like, 'All right, listen. This is wicked dangerous. This could end, to quote Dario Amodei, the Claude or Anthropic founder, this could end the civilization.' So we have to take that level of seriousness. The other thing that's going on is you're an AI maximalist, I'm an AI maximalist. I'm hoping my job will be there and I'm hoping people will be able to work the way I'm working. But I think it would be foolish to think that some jobs are not going to get displaced. You know, also if you're at a white shoe law firm and you're using AI, are you able to charge the 20 hours or now do you have to give a discount because the AI did it for you? You know, that's another big debate. But I'm just saying you're going to create job displacement. So then therefore, how would somebody like me look at it? I would say that the attributions of economic rent from capital and labor, when they're roughly half and each side is benefiting.
We have strayed from that. It's probably 55 now 60 towards the capital. Yeah.
And that's the irony because the capital,
you know, 1 to 2% of the population owns the capital. The irony is you can give 1 to 2% of the population 50% of the profits and the other side is happy as long as they've got 50% of the profits. When you start eating into them, you get anger-based populism, you know. And but I'm just saying to me, I would be like, okay, these companies who are going to be leaner and meaner, they have to apportion some of their profits to the labor force pursuant to what I just said. And so whether it's Claude or it's a service company or a law firm or whoever it is, you got to benchmark and put some of that money back into the society. And maybe that's universal healthcare or universal education or AI-based tutor-based customized education for kids which is readily available now as a result of AI, you know. So to me, we're not thinking about that. I know we're going to rush ahead and the president has said and I don't necessarily disagree with the president because I do see an AI arms race if you will but I don't want us to get into a position where it becomes reckless or out of control and we're all sitting around here and we're working for Skynet, you know, like back in the Terminator days, you know. But those are some things I think about, how do we make it fair and then how do you share the profits with people so that they have good aspirational living standards.
Yeah. And these are big philosophical questions because I think I agree like on healthcare, we don't want to walk by the street and not help someone who really needs help, right? Education, but how do we have that market clearing price that you and I know to be so effective to drive the best services? How do we have that market clearing price to make it work and still help each other? To me, that's the really hard part. Like, how do we do that?
Such a great question because the democratic socialists are like, you know, let's take the money from the wealthy. The wealthy have a happy fee.
They started taxing the non-domiciliary residents of London. They picked up and they moved to Milan. Okay. So now you lost all that activity around their restaurants, their services, the stores, the retail shopping, all that stuff left with them. So you don't want to do that. Okay? So you have to come up with like a balance. You have to strike a balance between you can have unlimited opportunity and unequal outcomes in our economy. No problem. If you're Jeff Bezos and you create this unbelievable mousetrap that everybody's using and you want to shoot yourself and your girlfriend up into outer space, go ahead. That's America and that's capitalism.
But I think we're rich enough where we should have a platform of equal opportunity.
Yeah. Like, you know, I can tell you, Condoleezza Rice says this all the time, so I'll share it. Condi says, 'Tell me the zip code. You tell me the zip code of the kid, I'll tell you whether or not they can get a good education.' Poor urban zip codes, the kids don't get great public school educations. And so how do we make it fair? How do we flatten that out so that we give these kids a chance at the starting block? Those are some of the...
things that I think about. Yeah. And we need to change education. I think the education is still set up to train people to work in a factory from the Model T time. And we need to change to help people think and also give them other support, you know, the right nutrition, all the things so they can have the best impact as they're trying to learn.
Yeah. Well, we also have a group of people that want to put fertilizer in your children's cereal and they want to chlorinate your chicken and they want to do, you know, the red food dye and they want to do all different types of things that
Europeans would never allow.
Let's go there because it's one of my passions. We've never talked about this before, but one of the things that just strikes me when I'm traveling around the world, I can go to the train station in Lucerne and they have fresh food there at the train station in Lucerne, a small little town in Switzerland. I can't get anything fresh at a major airport in America. Why have we, as the richest, most powerful country in the history of humanity, chosen not to have nutritious, fresh food? What is going on?
I think it's very simple. We've allowed the big food companies to lobby our Congress. And the big food companies said, 'Listen, we got to put this type of preservative and we have to put this type of packaging on the food and if we do that, our food's going to have a longer shelf life and we're going to make more profits. Okay. But that's going to make everybody fat in the country.' Well, we don't care about that.
You know, and that's what happened. And you know, and this is this whole loop around Citizens United. They pay the money and then the politicians say, 'Okay, we'll let you do what you want.'
And you know, listen, this is another thing because it has consequence. If we got back to the weight that we were in 1990, that's 36 years ago. I'm not talking about you and me. Trust me, I've gained weight since 1990, but I'm talking about the 30-year-old kid.
In 1990, that weight versus the 30-year-old kid today in 2026. If we get back to that weight, you'll save $2 trillion on health care expenditures in the United States.
Well, that's a little bit of where we're going.
$2 trillion, guys. It's all connected, you know, we got to cut it out.
Yeah. We've got to start doing root cause analysis. Meaning, we need to be giving people health care, but we could probably take 80% of the health care off the table by better inputs into our fellow citizens.
100%. So, well said. And I think that's something that nobody's talking about. These guys want to beat it out, beat up each other on cable. They want to sell a deal in the stock market. You know, people are criticizing Trump, but then the people that are criticizing Trump are doing the exact same thing. They're just doing it in a smaller way.
Is there even really left and right at this point? Anthony, is there two parties or is there sort of one party playing two different roles on TV?
I call it the Demo Republicans. I call it the Republic. It's a one-party system. Yeah.
It's literally like a cartel. It's like a duopoly.
