Interviews

Home Depot Founder: Obama Doesn't Like Business

Exclusive: Ken Langone on White House economic policies, job creation

 

NEIL CAVUTO, HOST OF “YOUR WORLD”: Well, it happened again, the Dow Jones ending the week lower for the sixth such week in a row. The last time it did that was back in 2002.

President Obama says he’s not worried so far about a double-dip recession, but business superstar Ken Langone is. And says that is the big part that worries him, the former Home Depot chairman in his own words.

(BEGIN VIDEOTAPE)

CAVUTO: Do you think President Obama doesn’t like business, doesn’t like business a lot?

KEN LANGONE, CO-FOUNDER, HOME DEPOT: Oh, absolutely doesn’t like business. Oh, I think...

CAVUTO: Why not?

LANGONE: Ask him. I don’t know, but it’s clear to me by his actions he does not like -- he doesn’t realize the value. The proof right now is, all that money that’s been spent, we’re still not creating the jobs we have to do. Private sector creates jobs.

The Home Depot, three of us, Bernie, Arthur and myself, 325,000 people. I had a girl yesterday from Arkansas call me, talk to me on the phone. She started as a part-time cashier 14 years ago. She is, tonight, a district manager of eight stores.

CAVUTO: Wow.

LANGONE: I mean that’s what job creation should be all about.

CAVUTO: So, have you advised the president -- not that he would call you, but if you advised the president, I heard from a lot of small-, medium-size, some large business, types just today, Ken -- and I think I was telling you about it -- that just say, well, get off our back. That would be a good start.

What do you make of that?

LANGONE: Look, I will make this concession to you. Too many people get to run major American corporations by not rocking the boat within the company itself.

CAVUTO: Right.

LANGONE: It’s called politics.

Every once in a while, a business leader has to demonstrate courage. The businesses that don’t have leaders that do demonstrate courage don’t make it. They just don’t make it.

Part of running a business -- I have never been a CEO, so it is easy for me to say what some other guy should do -- but the CEOs I have known and respected have always been willing to make the tough decisions.

Bossidy, Welch, Bernie, Arthur, Frank Blake, Ross Perot, Mitch -- I can go down the list. What was a thread that ran through all of them? It was the willingness to stand up and say, this may not be popular, but this is the right thing to do.

And I think if you look at a lot of companies, what happened to them? A lack of courageous leadership, whether it’s in the competition. Look -- look -- look at...

CAVUTO: Do you think we’ve made it too easy for them, though? I mean, you -- you made your riches on a bet and hard work and sweat. A lot of these guys come into office already on third base, and think they hit a triple.

LANGONE: I know. They were born on third base, and think they hit a triple.

CAVUTO: Right. So, all of sudden, they assume the multimillion- dollar pay package is their right, coming in right away.

LANGONE: Look, I’ll say it again. Business leadership requires courage from time to time.

CAVUTO: Well, do you think a lot of CEOs just don’t have it?

LANGONE: No, I think -- I think, unfortunately, the way they got to the top was by not rocking the boat.

CAVUTO: If that’s the case, and a lot of them are failing privately and our government seems to be failing publicly, that doesn’t look good for our economy and, for that matter, our markets.

LANGONE: Let me give you a name. Look at Eastman Kodak. Forty years ago, Eastman Kodak was in the so-called nifty 50.

CAVUTO: Right.

LANGONE: Eastman Kodak was on everybody’s list. You had to own it.

CAVUTO: Right.

LANGONE: Look at what’s happened to Eastman Kodak. That’s leadership, or a lack thereof. Where was the concern with the digitization of photography?

CAVUTO: So, that’s a private sector failing?

LANGONE: Of course it is.

(CROSSTALK) CAVUTO: All right, so, what I’m asking you, what does that say about our country now, where we stand now? Are you -- you’re a big patriot, besides being a concerned guy.

LANGONE: Yes. I see a lot of great companies.

CAVUTO: Well, what -- are you worried that we’re going into a double- dip?

LANGONE: Oh, I think we’re in a double-dip right now. I think right now, this economy -- look, unemployment’s not 9 percent. It is 18 percent. We’re in trouble.

We spent trillions of dollars in the last three -- Keynesian economics; I learned it in college 50 years ago. The idea, they called it pump-priming. You start the pump, and then the pump, of its own force, works. We pump-primed here and it’s not taking hold.

CAVUTO: All right, so the economy softens. The markets, too?

LANGONE: Markets are doing right now as we talk.

CAVUTO: So, this is a slow bloodletting?

LANGONE: Yes. But I think -- look, the one thing about equities, I think they’re cheap.

CAVUTO: Even now?

LANGONE: Oh, yes. Look at -- look -- look; you get nothing on your money in bonds or in bank accounts. There’s any number of great companies where you get -- Home Depot today...

CAVUTO: So, you’re still optimistic about the market?

LANGONE: I -- look, I’m constructive about the market. But I think - - understand, my logic on the market is, I’m thinking about three years, five years. I’m not thinking about the next trade.

I probably have left money on the table by not selling stuff. I bought a stock, which I won’t name, a year ago, at the suggestion of somebody I respect enormously. The stock has tripled. Now, it’s down 15 percent from its high.

And people say, gee, if you had sold it, and I say, hold it, hold it. School’s still out. Give me -- give me another year. Give me two years. Give -- this is to me a disruptive technology. And it’s going to be very rewarding. So, you don’t try and pick tops. Buffett’s a good example.

CAVUTO: Yes.

He doesn’t get it exactly right, but he gets it right enough.

LANGONE: Well, you look long enough over the long term...

CAVUTO: He has done OK.

You know, what I notice, though? All you very rich guys...

LANGONE: How do you know I’m very rich?

CAVUTO: Well, I know...

(CROSSTALK)

LANGONE: Have you seen my financial statement?

CAVUTO: Well -- well...

LANGONE: You know I have that much money because I gave it away.

CAVUTO: All I’m seeing is that, when push comes to shove, and you and Bill Gates and...

(CROSSTALK)

LANGONE: ... and Jones.

CAVUTO: Well, when they want to commit their money, they never give it to the government. They commit it to private enterprise or, in your case, a medical center, a host of other things. They just don’t write a check to the government or the IRS and say, you guys do a good job with this.

LANGONE: No. Well, yes, they write...

(CROSSTALK)

CAVUTO: Why?

LANGONE: Well, they write what they have to.

Bear in mind, Neil...

CAVUTO: But that’s their way of saying, even the liberal among them...

(CROSSTALK)

LANGONE: Bear in mind...

CAVUTO: ... I sooner trust Bill and Melinda Gates or Ken Langone and his foundation than the government.

LANGONE: Understand something. There are many people in America who give away enormous sums of money that can’t take the tax deduction. There’s a limit on how much money you can give away relative to your income.

CAVUTO: What is it?

LANGONE: I think it’s 30 percent.

CAVUTO: Oh, you have a ways to go.

LANGONE: Well, now, hold -- no, as a matter of fact, for a number of years, I -- you have carry-forwards. You can carry it forward.

CAVUTO: Right.

LANGONE: But if you’re giving money away for tax purposes you’re losing...

(CROSSTALK) CAVUTO: OK. OK.

(END VIDEOTAPE) CAVUTO: I think of him, he’s -- he’s got three grown sons, and they are OK with dad giving all the money away. Ken keeps telling me they are OK. I don’t know. I don’t know.

He’s a great guy.

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