Founder & Chairman, Equity Group Investments
Sam Zell CNBC
great Sam Zell interview on #OWS, Education and Equality in America.
About Sam Zell
Sam Zell, founder and chairman of Equity Group Investments, has been a frequent commentator on the U.S. economy and fiscal policy. In a series of interviews from 2023 to 2025, Zell has repeatedly stated his view that the U.S. is heading toward a recession, citing the large increase in national debt and the Federal Reserve's handling of monetary policy. He has described the addition of "seven or eight trillion dollars" to the national debt over a few years as creating a "huge burden" and has compared the situation to the Weimar Republic. Zell has criticized the Fed for keeping interest rates too low for too long, saying he has "never seen the Fed get lucky" and that the central bank is "just beginning to pay the price" for its mistakes. He has also stated that the stock market tends to get "too excited about everything" and that the current environment is one of "enormous uncertainty." Regarding specific sectors, Zell has described the retail real estate market as a "falling knife" that has not yet hit bottom)Skip. He has also commented on the office market, stating that while it was oversupplied before the pandemic, he believes workers will eventually return to offices because "you can't motivate by modem." Zell has also discussed his investment philosophy, emphasizing the importance of discipline and avoiding the "enthusiasm of whatever the current event might be." He has noted that his firm is "busier than ever" sourcing deals as the economic environment has deteriorated, but that buyers and sellers have not yet agreed on prices.
Transcript (24 segments)
✨ AI-enhanced transcript with speaker attribution
H
Host0:00
Let's get some more thoughts from our guest host, Sam Zell, Equity Group Investments chairman. So let's go to it. Occupy Wall Street, Louisiana. What do you think of Occupy Wall Street?
S
Sam Zell0:11
Not much. I think that it's collected a whole bunch of people with very disparate views. I think that quote-unquote protest is both healthy and critical to the dynamism of our country. At the same time, I don't see any justification for taking over private property. I don't see any justification for creating health issues and attracting all kinds of people who, more than anything else, want to get on television.
H
Host0:46
So if you were the property owner... Yeah, Brookfield's the property on that. You were the property owner that I was okay. Park, you would have done...?
S
Sam Zell0:51
I would have evicted them on the first day. You know, I would have said it's private property. If you want to go protest, go find some public park and let Mayor Bloomberg deal with it.
H
Host0:58
What do you make of the larger conversation just around, forget about Wall Street, but economic inequality in this country? I'm just throwing it out there as a question because you are a member of the one percent, as are other people at this table, but it's worth it.
S
Sam Zell1:13
And the answer, Andrew, is that there has been a significant bifurcation in economic equality in our country. The rich got richer and the poor got poorer. But as David Brooks said yesterday, the real issue is not income inequality. The real issue is educational inequality. The fact that we have an upper tier, highly educated, highly motivated, highly productive, and highly reimbursed, and then we have an uneducated scenario that's getting killed. I mean, we operate a company called Amster, which is a six billion dollar distributor of wiring, cable, and fasteners around the world. We decided to set up a plant in the United States to provide fasteners if we had a supply disruption. We can't fill the plant with workers because to make fasteners, you've got to be able to read plans, and we can't find people who can read plans and specs who are vocationally trained. And yet we have 10% unemployment in the Chicago metropolitan area. I mean, we have an education crisis. The fact that we are not educating our people, the fact that we've abdicated our education to union rules. I mean, I never forgot when Albert Shanker said, 'When the students start paying us, then we'll start representing the students.' And if that's what he's saying and if that's the mantra, we've got really very fast.
H
Host2:57
But I'll tell you, I've reported down and I've been down to Zuccotti Park to report on the protest. One of the things you hear over and over again from so many of the people down there is they are college educated, they have thirty thousand dollars of debt, they don't have a job, and they say, 'Look, the system, for whatever it is...' They need more information. Did they major in engineering or in literary arts? In other words, take responsibility and say, 'I have to provide for myself. I better have a college education that converts into a real working opportunity.'
S
Sam Zell3:26
And as far as I'm concerned, I don't know of too many engineers who are unemployed. I know a lot of LSA people who are unemployed, who basically said, 'Gee, college is just another wonderful four years and I can study all this great stuff.' The reality is that we're doing our country and our people a massive disservice by virtue of under-educating and under-preparing them for our society.
H
Host3:57
We're spending too much or too little money on education? When you look at how much we spend relative to other countries, it's typically as much if not more.
S
Sam Zell4:04
Oh, but not necessarily as a percentage of GDP. Well, not as a percentage of GDP, but as a cost per student, it's probably twice or more. But the answer is, you know, how much proof do you need that money isn't the issue? I believe that the highest subsidy in the country for education is in New Jersey, and I think it's something like ten thousand or twelve thousand a student, and they haven't produced any terrific results. Again, you go into charter schools or other places where you really have a focus on education, and with half of that they produce superior results. So it's not a question of money; it's a question of progress. It's a question of setting out the goals and setting out the importance of education and saying that's more important than preserving union rules. That's more important to the future than almost anything else.
H
Host4:59
Just one last follow-up. Who'd you hire to do those fasteners then? Or have you had to move the production out of the country?
S
Sam Zell5:05
No, we run one shift today and we have demand for three shifts today.
H
Host5:10
That's incredible. How many jobs do you have open?
S
Sam Zell5:12
I don't remember the numbers, but I mean literally we could hire twice as many people.
H
Host5:17
Is it that some Americans won't take certain jobs because they think they're too low-paying or benefits?
S
Sam Zell5:21
No, I don't think that's as much. They're not trained; they're not equipped. And then we said, 'Okay, let's go to the government and see if they could help us with training.' Spend billions and billions of dollars on training. Total zero. No help whatsoever. And the result is we're going to have to set up an in-house training program and see if we can train people. But that's the answer. It should always be instead of going to the government and having them run these wasteful training programs.
H
Host5:47
Why didn't you do that from the beginning?
S
Sam Zell5:49
Give me back my taxes. Yeah, exactly. To provide that training program, and I'll spend it on the company. I mean, the answer is that the government, by definition, is the most incompetent producer of any kind of services. Nobody has ever disputed that. And so limit the government to what it does or has to do: defense, foreign policy, etc. But everything you want them to get out of the education business too.
H
Host6:17
Absolutely. Absolutely. Oh wow, yeah. Absolutely. I don't think... Is there any... In other words, the government has massively moved into education over the last 35 years. Have the results been more or less than what they were before?
S
Sam Zell6:30
Oh, I wouldn't dispute that. But then the question is just how do you make that work? You go back to it. Well, you know, there are charter schools all over the country that work. There are Catholic schools that have been operating all over the country for 100 years and have produced and educated students. You create a system where parents have the choice, the actual consumer of the product can make a decision and a choice.
H
Host6:53
Look, I've actually... I think charter schools are very interesting, not just experiments.
S
Sam Zell7:02
No, no, no. Tremendous charter schools. But I don't think all charter schools are great, just like I don't think all public schools are horrible. Schools fail.
H
Host7:10
But with public schools, don't... That's the right. There was a great piece in the Journal. Someone wrote an article on if your local supermarket was run like your local public school, you wouldn't have any food. You wouldn't have anything. It's the only one you can go to, and you go in and it's like... No way to do the most important thing we do in our life for our children. Government monopoly. And it exists solely for union dues to help elect the right people to perpetuate the same system that they're in right now.
S
Sam Zell7:42
Probably have a union person to defend it because I'm not going to make the debate right now, but we gotta run. We'll continue the conversation after the break.