Billionaire Confessional: David Rubenstein on Wealth and Privilege

Here is another superb article from for The New York Times in which he shares his conversation with David Rubenstein. To read the complete article, check out others, and obtain information about deep-discount subscriptions, please click here.

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“Growing up in a family where your father’s pretty wealthy is much more complicated than growing up in a family where your father is not wealthy.”

David Rubenstein grew up in a low-income home in Baltimore, the son of a Jewish mailman and a stay-at-home mom. Today he is one of the richest people in the world, worth some $3 billion. It’s an up-by-the-bootstraps story that informs his views on education, income inequality, taxes and more.

After attending Duke University and the University of Chicago Law School, he joined the white-shoe law firm Paul Weiss. He then worked as a lawyer in the Senate, and in the White House during the Carter administration. In 1987, Mr. Rubenstein co-founded the Carlyle Group, a leveraged-buyout shop that has grown into one of the largest private equity firms in the world.

He stepped down as co-chief executive of Carlyle years ago, and now stays busy giving speeches, hosting a show on Bloomberg TV and writing books. He is also giving away large sums of his money, including spending lavishly to preserve American history. He has bought copies of the Declaration of Independence and the Emancipation Proclamation, and donated to help repair the Washington Monument and the Lincoln Memorial. He calls it “patriotic philanthropy.”

This interview, which was condensed and edited for clarity, was conducted in New York.

Tell me about your parents.

My father dropped out of high school to go into World War II. He served in the Marines in the Pacific, came back, met my mother, married her not too long thereafter. She dropped out of high school to get married. We lived in northwest Baltimore, and my family was part of the schleppers, the blue-collar people, who all lived in these narrow little rowhouses. My father went to work in the post office, and spent his entire life there and retired when he was 55, and moved to Florida.

What did you want to be when you grew up?

When you’re growing up in the 1950s in a blue-collar family, you didn’t aspire to make a billion dollars the way they do today. If you went into business, you only went in from one of two ways. If you were not Jewish, you would go work for Morgan Stanley, Procter & Gamble, IBM, Standard Oil. If you were, let’s say, ethnic, to use a phrase like that, you would go into your family’s business, whatever it was. If you didn’t have a family business, you would go be a lawyer or doctor or a dentist if you were Jewish.

It was a big advantage in hindsight. Because when you grow up relatively poor — and I don’t want to make it sound like I was poverty stricken, I had parents, I wasn’t living in an orphanage — you have to learn to do things on your own and so forth.

How did the Carlyle Group come to be?

Two things happened. I read that Bill Simon had done a leveraged buyout in the early 1980s where he bought Gibson Greeting Cards and made $80 million on a $1 million investment. I didn’t know what a leveraged buyout was, but it sounded more attractive than practicing law.

And then I read an entrepreneur will start his or her first company between the age of 28 and 37. And after 37, just like a woman’s biological time clock goes down, your chance of reproducing goes down, your chance of starting a company after 37 goes down. So I said, “Oh, if I’m going to do it, I better do it now.” Then obviously, as we built the firm, the money came along, and then you have to figure out what to do with the money.

Given that you grew up relatively poor but are now so rich, how do you talk to your own children about money?

Growing up in a family where your father’s pretty wealthy is much more complicated than growing up in a family where your father is not wealthy. When your family is not wealthy, you’ve got to really achieve something or you’re not going to get anywhere. You’re on your own.

Whereas my own children, and the children of families like mine, I think have a bit of a disadvantage. As a general rule of thumb, the people running the world are people from blue-collar families who are lower middle class. It’s rarely the case that somebody whose father was a billionaire turns out to be better than his father, becoming a multibillionaire or running the world.

With my own children, I wouldn’t say it’s perfect, but what I have done is send them to very good schools — Harvard, Stanford, Duke, that kind of thing. But they don’t have trust funds that they’re living off.

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Here is a direct link to the complete interview.

David Gelles writes the Corner Office column and other features for The New York Times’s Sunday Business section, To learn more about him and his work, please click here.


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