Okay, good evening everyone. Welcome to Politics and Prose at the Wharf. I'm Brad Graham, the co-owner of the bookstore, along with my wife, Lissa Muscatine, and we are absolutely delighted to be hosting Anthony Scaramucci, who's here to talk about his new book, All the Wrong Moves: How Three Catastrophic Decisions Led to the Rise of Trump. Only three.
Anthony, of course, is best known for his brief 11-day tenure as White House communications director in July 2017. But he's also, most importantly, a longtime finance leader who's founded a couple of investment firms over the years and also gained prominence in more recent years as a very frank and engaging communicator.
He started his career in investment banking and private wealth management in 1989 at Goldman Sachs directly out of law school in 1996. After leaving Goldman, he co-founded an investment partnership, sold it a few years later, then in 2005 founded the global alternative investment firm SkyBridge Capital, where he remains a managing partner, and he also co-hosts a very popular podcast, The Rest Is Politics US. Any listeners there? Yeah. Okay.
Now, it took Anthony a couple of years after his dismissal from the White House to break openly with Trump, and he's been a vocal critic ever since. In his new book, he examines what he considers the several main government missteps in the pre-Trump years that ended up fueling the populist sentiment that, in turn, powered Trump to the presidency.
His critique is bipartisan. He blames both Republican and Democratic administrations for creating the conditions that led to Trump. And not surprisingly, given his own background in finance, Anthony focuses his analysis on actions that had an especially damaging economic impact. He calls this the money point of view of history. But as some reviewers have noted, the most engaging parts of Anthony's book are the places he reflects on how he also got some things very wrong — not just in supporting Trump and joining the administration initially, but also in miscalculating, as previous administrations did, the grave impact on blue-collar jobs and income disparities that certain policies ended up having.
Anthony's book sounds a lot like him. It's fast-paced, candid, and entertaining. And it's not all criticism. In a final section titled 'How We Have Hope,' he offers five policies for change and proposes three amendments to the Constitution. So, there's much to discuss with him this evening. And guiding the discussion will be the talented journalist and Anthony's podcast partner, Katty Kay, who's currently a US special correspondent for BBC Studios. She also appears frequently on MSNBC's Morning Joe program and has another podcast called — what's your other podcast called, Katty?
Doing it anyway. And she's co-written with Claire Shipman several books, among them Womenomics, The Confidence Code, The Confidence Code for Girls, and The Power Code. So please join me in welcoming Anthony Scaramucci and Katty Kay. [applause]
That was a very generous introduction.
Yeah, you sounded quite impressive, Anthony.
But for a second there, who was the guy he's talking about? Actually, very impressed. Anyway, thank you all for being here. It's a lot of fun for me to be here.
I'm in Washington. I can't get fired tonight, no matter what I say or do. And it's sort of like my 12th day in Washington. Go ahead. Go ahead, Katty.
Yeah. How many Wednesdays were you there?
I was there. I was there for one Wednesday. I got fired on the second Monday, but I got in a lot of trouble on the second Friday. That's really when Trump and I were fighting. And I think that's chapter 14 of my book. And I actually read that for Audible. So I narrate the Audible book. And when I got to chapter 14 and I was recounting what happened, I was like getting scalp sweat and I — I told the producer, I said, 'I got to go downstairs, get a cup of coffee before I finish this.' So —
Yeah. It's still traumatizing, to be honest. Yeah.
And you weren't there long enough to kind of do loads of trades and kind of make lots of money and billions for yourself either, which is a little different between those days and these days.
Well, I'll tell this story. So, well, I had — people don't remember this, but I was supposed to be the OPL director. Do you remember that? So, I was supposed to be the Office of Public Liaison, but this guy, Reince Priebus, hated me, and so he delayed the job. And so I actually had — they're gray badges now, but I actually had a blue badge to go in and out of the White House from January 20th to — I got fired on July 31st. So I had access to the White House. The president said, 'Keep your access, and you know, we'll probably find you a job.' The only reason why I'm bringing this up is that the GSA asked me, you know, I guess the salary for an assistant to the president was like about $180,000. I said, 'I don't want the money.' They said, 'Well, we're going to pay you like a dollar a year.' I said, 'They had to pay me something.' So I have a check from the GSA for like 42 cents, which was like from January to July.
And so that was the extent of my financial benefit. Okay. I didn't triple my net worth like Howard Lutnick or quadruple my net worth like Donald Trump. But anyway —
Yeah, that was a different administration. Okay. Anthony, the money view of history, which is a very good phrase, by the way. I like that phrase. What does it mean, and what do you mean by it? What do you want us to understand by it?
Well, I start at the beginning of the book saying that if you follow the money in the United States, you'll have a pretty good idea where the policies are going. You have a pretty good idea where the history is going. You can go all the way back to the Whiskey Rebellion, frankly, the Boston Tea Party. This has been a money-centric culture since Jamestown. And you got to follow the money in this country. And people come here for money. And you know, maybe your family didn't come here for money, but my family did. My family was dirt poor in Italy. And they're like, 'I got to get out of here. I got to find a job and I got to find some opportunity.' And so when you get a whole collection of people like that that are looking for opportunity, and you have to think about the bravery of these people — they're leaving the place they grew up in, the family of origin, to come here. You know, I dedicated the book to my grandmother. You know, my nana got here in 1923. She was 18, and there were signs in Brooklyn. She used to tease about this. She said, 'When the Irish got to Brooklyn, there were signs that said, No Irish need apply.' And then the Italians came after the Irish. They didn't have to change the sign: No Italians need apply. And so my grandmother ended up as a maid, but she came here for the opportunity. And she hustled. And I think that's the country. I think you have to really understand the flow of money in the country. And when people start to feel anxious about money, they get angry. And when they get angry, they get motivated politically. And that's a big thesis in the book.
You write in the book, you tell the story of you're at Harvard Law School and you're in a class, and Professor Laurence Tribe, who I'm sure many of you know who he is, the constitutional lawyer, is asking a question of all of the students: which is the most important constitutional amendment? And everybody is giving their answers, and you give a pretty unusual answer, and I think it's tied with this money view of history. It shows how you think of American history. Explain what happened there, because I think it's such an —
I'm going to call him Larry, if you don't mind, not out of disrespect but out of personal friendship. I've had a 42-year relationship with Professor Tribe, and he always brings up that that was the one answer in all of his teaching he didn't get. He, by the way — so here was the assignment. It was Labor Day weekend. Read the Constitution. Be prepared to talk about the Constitution. And then his Socratic question on day one: what's the most important thing in the Constitution? And he went through the class. His answer was the Fourth Amendment, which is interesting because he is actually — if you really study constitutional law, Larry believes in judicial activism, and you can actually get the most leeway in terms of constitutional interpretation through that amendment. That's where the Miranda rights came from and your rights to privacy and other things. But I said that it was the commerce clause, just to remind everybody what that was. In 1789, the states were scrabbling, and you guys will remember this — in the 1820s and 30s we had lots of compromises as we were bringing in new states because they were trying to keep the balance between the slave states and the free states. But in 1789, the big debate was: are we going to tax each other for interstate commerce? So if New York is selling into New Jersey, are you going to be able to have a tax on that? Or if they're selling into Georgia? And Hamilton really made this decision. He said there'll be way more trade, free trade, if we have no taxation on interstate commerce. And so the commerce clause — and I do really believe this, and you know, I think people like Professor Tribe would challenge me on this, but again, follow the money in the United States. You get rich in the United States, you get an expansion of liberty. You get rich in the United States, you get endowed with more rights. And I really believe that countries that struggle with wealth — Russia — they yield to authoritarianism. It's like what Dostoevsky said, you know, are you going to choose bread or freedom? You remember the conversation in that book with the Grand Inquisitor? Are you going to choose bread or freedom? And Jesus said, 'They're going to choose freedom.' And the Inquisitor said, 'No, they're not going to choose freedom because they're hungry.' Okay? And they're always going to choose their bellies over freedom. But in the United States, if your belly is full, you can have a lot of freedom. And so we did something in the United States that the Europeans constantly marvel at. What did we do? We created a continental free trading block. Free trading block with a single currency. Think of Europe and think of the thousands of years in Europe and the multiple cultural backgrounds, the multiple currencies and the bureaucracies. And then after the Second World War, because of the devastation, they want to pull it together, but they're still really struggling with that. And again, not to give an economics lesson here, but the euro is a fixed exchange rate mechanism among those countries that are participating in the euro. There's no specific guiding principle from any budget. They don't follow a budgetary process like we do in the United States. People in this room know that the United States — each of the 50 states has to balance its budget at the end of every year or come very close to it, which is part of the federal system. Europeans don't have that. That is a major advantage for the United States that we can take our currency continental and there's no interstate conference. Now the internet — when the internet came on, you know, Amazon had to yield to — if they're shipping into your state, they are doing business in your state, that you have to pay the sales tax. But that was the only time that we changed that.
Yeah. You're right about how in many ways the American Revolution was a free trade war between these 13 states, colonies that had this free trade block a long time before the European Union introduced its free trade block. And then you take us through history, Anthony, and there's a theme in the book, and I love this — the first quarter of the book is all about the history that gets us to the point of the three catastrophic decisions, and we'll talk about that in a second, but you talk about this important relationship between capital and workers and how it has got so skewed that we end up eventually with MAGA, and we'll go through that process in a second. But talk about a time when the relationship was less skewed, when America got this relationship between the needs of capital and big business and the needs of workers right, because I don't think we've always been in the position that we are in today in America.
No, but it was shorter than people think. And so what happened is America is booming. The system is set up where the government is very decentralized. If you go look through the founding documents or you look through the Federalist Papers, they're trying to avoid tyranny. They're trying to avoid autocracy. So they're really separating the powers and they're trying to make sure that there's a check and balance in the powers. And of course, there's a very famous Supreme Court case, Marbury v. Madison, where our first Supreme Court justice tells Thomas Jefferson, 'You can't do that.' And Jefferson says, 'Well, the court doesn't have an army.' Like reminiscent of what's going on today. And Jefferson looks around and said, 'Well, you know, I wrote the Declaration of Independence. I helped frame that Constitution. He can't really push me around, but he's going to be able to push me around because I'm going to adhere to this document.' Jefferson says something, he cites Cicero. He says that we are slaves to the law in order to be free. So he subordinates the government to the law. And in a rules-based society, when we're connected, we can be way more prosperous. And so this unleashes unbelievable amounts of economic activity in the country. We got to get immigrants in. Even though we've always had ism and racism and, you know, we've had all different types of knuckle-dragging activity in this country. We got to bring the immigrants in because people want to make money. And so we create this unbelievable growth, unbelievable melting pot. But we're fighting. Okay, so I'm going to take you to the 1890s. It's the robber baron era. Rockefeller is trying to get a monopoly going. The state of Ohio won't allow him to have the monopoly, Standard Oil of Ohio. He moves to New York. New York wants the business, so they allow him to start monopolizing. It's one of the worst things that can happen because once people start monopolizing, they control pricing, they eat their competitors. You know, we'll get into the seven big tech stocks in a second, they eat their competitors, and then they make it impossible for innovation. Okay? So in comes Teddy Roosevelt. He's the father of progressivism, even though he's a Republican. And he starts knocking these guys around. Why is that important? Because he's letting people know that as president of the United States, he's not going to allow for this ultra concentration of wealth. He tells Rockefeller, 'You can't have 2.5% of the GDP.' And this is important because it sets up the bedrock for the middle class. And then of course, very famously, fast forward in 1944, we did a treaty with 10 or so — there were 28 nations represented, but there were 10 big ones — called the Bretton Woods treaty, where we fixed the exchange rates, linked the US dollar as the anchor, and this set up, Katty, the greatest middle class boom that has ever existed in the world.
And that's the boom, Anthony, that you're — to get it back to your personal story, because you write very movingly about your grandparents and your parents and what they went through and how much they benefited from this period, this post-war period where actually the working and the middle class in America — what we would probably call working class and Americans call middle class — benefited enormously from —
Explosive wages, the rights of unions, stable currency. So if a guy like my dad was working on a crane, he got an hourly wage and you paid it to him, and the dollar was tied to gold. Well, guess what? He had real durable savings and real durable currency. Okay? He was then able to buy a house, the one that my mother still lives in, which Katty came to and crashed my Lamborghini, but that's for —
You know, it really wasn't a crash. This is an urban legend. It was a tiny one. I bought the license plate back from the road where she actually did —
They found the license plate in the — anyway.
And then he sent it to the shop, and I heard grief about it for weeks afterwards.
You told me to turn — you did say, by the way — tries to low-key stuff. She's way more bougie. Should have seen it. Back to the book.
You should have seen her in the Lamborghini. Way anyway, unbelievably bougie.
So there were these postwar presidents who understood the value of a global marketplace, right? And who understood that a global marketplace and free trade with other countries was a good thing for American workers as well. And that was such a contrast to what we have today.
Yeah. And build up other countries. The neo-Victorians that were running this country at the end of the Second World War adhered to Bretton Woods. They started the Marshall Plan. They created the General Agreement on Trade and Tariffs where it was uneven, meaning you could send goods and services into the US relatively unprotected — you know, the US wouldn't tariff you — and if we sent goods out of the country, we allowed them to tariff us because we were trying to create rising living standards around the world. You have to think of the genius of this vision. The other thing the Americans did at that time is they fortified the alliance. Okay, you guys may remember the potential assault on Greece. Harry Truman said, 'We're not going to do that. Sorry.' Truman Doctrine: if it's part of the free world, we're going to keep it in the free world. There's a major piece of foreign policy for the Americans that made America more prosperous. It made Western Europe more prosperous, but it made America more prosperous. People don't remember all this, but this is really the blueprint for the American century. And my parents, who didn't go to college — my father grew up in a coal mining town in northeastern Pennsylvania. My mother grew up on Long Island, where I was born and raised. Nobody went to college, but everybody had a house and everybody had a good wage, and we had air conditioners and heat and everything, you know. Although my father, Katty, you know, my father may have sold recipes. The air conditioner went in on Memorial Day weekend. It came out of the window on Labor Day weekend. It didn't — it could have been 500 degrees the day after Labor Day. He didn't care.
They were tougher than we were.
They were tougher than we were. You sweat it out, and a couple of weeks you won't know any better. But his, you know, he was watching his P's and Q's, but he had a great job for that era. And I say in the book, when I was on the Trump campaign — I've done a lot of stupid things. Working for Trump is probably the most stupid, but it was a big learning experience for me because I was going into towns where the towns were literally blighted. I was going into town. Somebody said to me in New Mexico, 'Haha, you think you're in New Mexico.' That would be Mexico. New Mexico is Mexico because everything in this area left for Mexico after NAFTA, and we're all struggling looking for work.
Anthony, I mean, you've told me this story, but I think it's worth, you know, talking about the fact that you did join the Trump administration, and we will get to the wrong moves, but one of the things that you have always said to me that attracted you to Donald Trump was that he understood what working-class Americans — he just got it in a way that you thought, here is a politician who gets it and will do something about it. And we'll try to close that gap between the working class and capital, the big corporations. We'll try to do something to help the people who feel that they've been left behind. That's why you went in.
Well, yeah. And let me give the economic background because this is the money point of view of history. '93 is NAFTA. Starting to see this erosion. '99 is the protest that I write about where us on Wall Street get it wrong. But by '01, China is now a permanent member of the WTO, and China comes in with all these privileges relative to the West. And now we're starting to see the pain. We're starting to see the flattening of wages. Fast forward to 2015. It's 15 years later, and Donald Trump is coming down the escalator. And the Republicans — did they care about those people, those white working-class voters? They did not. Did the Democrats care about those people? Sorry, not sure who they are. They did not. And here comes Trump with a message for those people. And I was on Jeb's campaign. You see the people in this room right now? This would have been a colossal amount of people for Jeb. If we had five people — and I'm not making this up — if we had five people in a room in New Hampshire, three of them were paid staff, okay? And one of them was like, 'You just got off the ship at the diner. Here's $30. Can you go in there and hear Jeb?' You know, and then at the end of it, he'd say, 'Please clap.' We would be like, 'Oh my god, this is like a disaster.' I was like watching paint dry. And then Trump convinced me to go join him. My first Trump rally there: 9,000 people waiting for the candidate. There are 5,000 people, Katty, outside the arena. You, as a BBC correspondent, went to these rallies. You saw what was going on because there was a vacuum of advocacy for these people. Nobody was addressing their needs or concerns. And Secretary Clinton — she got the nomination in the big fight with Bernie Sanders. And you guys know they sort of took it from Bernie. That's why Debbie Wasserman Schultz had to get out of town on the evening of the convention. And did she go to Wisconsin after the nomination? Right. It's a trivia question. Did she go? She didn't go one time to Wisconsin. She said it was her blue wall. Trump went 14 times to Wisconsin. She went twice to Michigan. Trump went 17 times to Michigan. She did go to Philly. And Katty knows I'm going to tell this story because I got to tell you where Katty was, okay, in Philadelphia with Secretary Clinton. She was with Jon Bon Jovi and she was with Bruce Springsteen.
I was not actually with them. I was like way out in the back of the crowd with the press.
Let's not make this so bougie. You were at the glorious name-dropping celebrity concert that Hillary was having, and we all assumed Hillary was going to win 48 hours before the election. They were all there clapping, and her sign was 'I'm with her.' Everybody remember that? You know where I was on that night? I was in a farm field in western Pennsylvania in the drizzling rain, and it was, you know, getting into the later fall months and it was getting cold. And Trump was out there with the hat on and his trench coat. And he said, you know, 'She's got all the celebrities with her on the eastern side of the state, but I'm here with you. Her message is I'm with her, but my message is I'm with you. And oh by the way, I'm your only celebrity, so you better take a chance on me.' And I remember looking at that and saying, 'My — he's going to win the state of Pennsylvania.' Okay? And he won the state of Pennsylvania. Why? You had wage anxiety in the country that those people thought he was going to address, and he did absolutely nothing for them. By the way, it's 10 years later. He did absolutely nothing.
So let's go back then and look at the three — what you call the three catastrophic moves. In the first one, which is — you mentioned it, China's entry into the World Trade Organization, which happened at the end of the 1990s. Bill Clinton was negotiating the whole process. I remember in 2016 going to talk to voters up in Ohio who had been lifelong Democrats who switched parties to vote for Donald Trump in the Republican Party, and who could cite chapter and verse of China's entry into the World Trade Organization and how they had been directly harmed by it and how their steel town had been hollowed out by it. But take us through that process, because you write in the book that it's not — Anthony, you as a historian, an economist, to the extent that you've studied all of this, and somebody who's worked in finance — it's not that you think globalization itself was the wrong thing. It was the way that it was handled by Clinton and then by Bush, but by Bill Clinton and the negotiation of how China was allowed into the WTO.
Exactly. So the book that I was trying to write — hopefully I achieved it, and you guys will let me know if I did or didn't — but what I was trying to look at: I get asked, I go around the country and speak, people say, 'What happened? How did this happen to us?' And so I did a year's worth of research, and I wanted to make the book not a polemic that's partisan, not a polemic that's tribal, but sort of an objective historical, political and economic analysis of what happened. And so I submit to everybody in this room: there are very good people who are very, very smart, and they're making decisions expecting a certain outcome, and they get an outcome that's totally unexpected that ends up harming the country when they're trying to help the country. So what Katty's getting to is we're talking about the end of history. The Berlin Wall is coming down. We're talking about budgetary control. Some of the older people in this room will remember the PAYGO legislation in the 1990s tightens the budget. Dick Gephardt votes for it. Bob Kerrey, the Vietnam veteran, crosses the aisle and votes for George Herbert Walker Bush's budgetary controls. Bill Clinton beats Ross Perot and George Herbert Walker Bush, and he adheres to it. And by the end of the year — the year 2000, guys — we're printing a budget surplus. Okay? So we've got things going in the right direction. The wall's down. There's a peace dividend. Democratic free market capitalism lives, and it's going to expand. And you know what? If we let the Chinese and the World Trade Organization — Katty, you remember this because we're contemporaries. People in this town —
You're a little older than me.
Yeah, I'm — well, I'm a lot older than you chronologically, but not that much older than you on Wikipedia. But anyway, the point of the story that I'm making is we're feeling really good about ourselves and we get very aggressive. So aggression number one: let China in. Our CEOs are saying let them in. Why? There's a 1.3 billion market. That market is going to be unbelievable for us. It's four times the American market, and there's going to be all these consumers, and they're going to buy all of our products. Let China in. And the assumption was that China would change.
And they did not. And who got it right? Nancy Pelosi.
She understood that they would not. That they would enter the WTO and they would not change.
So glad that Katty read the book. I — Nancy Pelosi.
