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Influencers Transcript: Steve Rattner, February 7, 2019

ANDY SERWER: Steve Rattner is savvy enough to build a fortune and wise enough to know that influence demands much more. He started out as a New York Times reporter covering Wall Street. Eventually he jumped into the fray himself, becoming a top investment banker and a private equity player. But when the Great Recession hit, he dropped everything.He joined the Obama administration to rescue the auto industry. And within months, he had done just that. Now he manages Michael Bloomberg’s billions, and gives economic analysis in the New York Times and on MSNBC. Rattner is here to help us make sense of a world perhaps on the brink of another economic slowdown.

Welcome to "Influencers." I'm Andy Serwer. And welcome to our guest, Steve Rattner. Steve, thanks for stopping by.

STEVE RATTNER: Thanks for having me, Andy.

ANDY SERWER: So there's so much to talk about with you, Steve. That's why I always enjoy our conversations because you've got media. You've got Washington. You've got Wall Street and everything in between.

STEVE RATTNER: I'm the consummate dilettante.

ANDY SERWER: Right. Well, you're--

STEVE RATTNER: I'm about an inch deep.

ANDY SERWER: Right, right. I don't think so. Anyway, why don't we start off by talking a little bit about Washington and economics. And I guess I have to ask you about President Trump and how you would rate him when it comes to the economy. What would you advise him to do?

STEVE RATTNER: Well look, I think the president's record on the economy is mixed. I do think we needed to reform the corporate tax code. Whether we went to far and were too generous I think is a real question. The individual tax cuts which were regressive and favor of the rich were completely unnecessary. And we exploded the deficit.

We're now going to be looking at trillion dollar deficits and actually ultimately within 10 years on present course and speed were going to be looking $2 trillion deficits. And I think that's irresponsible. We needed some kinds of deregulation and regulatory reform. We didn't need to basically turn Washington over to the lobbyists and to the companies. And so I think his performance is certainly well below what he says it is. We're still in a 2% basically growth environment, and we will be for the foreseeable future.

ANDY SERWER: Drilling down a little bit on that deficit, I mean, that is something that is going to have to be addressed either by him or by his successor. What would you counsel?

STEVE RATTNER: You would think it would have to be addressed. But, as you know, there are many people out there who essentially say deficits don't matter. We've had two very distinguished economists, Larry Summers and Jason Furman, write a piece in "Foreign Affairs" just in the last week or so not quite saying that but basically saying we should be investing in our country, which I agree with.

Look, the problem in the deficit is largely on the revenue side. We've had too many rounds of tax cuts over the last 20 years by Bush 43, George W. Bush, and now by Trump that we really can't afford. And we need to get tax rates back to some reasonable level.

ANDY SERWER: What about the government shutdown, Steve? Do you think the government's going to be shut down again? What does this do to our perceptions of government that we keep having this swinging door?

STEVE RATTNER: Well, obviously, it's terrible for our perceptions of government. And if you look at how Congress rates in public opinion polls, I think at one point they rated below Hugo Chavez in public opinion approval ratings. So it's terrible. It's a terrible sign about how we run our country.

I don't think the government will shut down again. I think that putting the president aside, which is not easy to do, certainly the Republicans and the Democrats are not that far apart. Call it a war, call it a f-- I mean, sorry.l call it a wall, call it a fence, call it whatever you want. The president said we should call it "peaches." They're not that far apart. There's a way to bridge this gap, and it's not really about money. This is an infinitesimal amount of money in the great scheme of what the government spends every year.

ANDY SERWER: It's maybe about immigration policy. But it should, perhaps, be linked to sort of a bigger solution with immigration?

STEVE RATTNER: I think in a perfect world that would be great. I think that's going to be hard in the frame we're talking about. The conference committee essentially is supposed to report out a bill by the end of this week. So to do a comprehensive immigration reform I think is probably a bridge too far.

My view would be you simply compromise on the amount of money. You compromise on exactly what it can be used for and what it can't be used for. And you move on.

ANDY SERWER: Let me ask you about the economy, Steve. You know, personally, I'm a little confused by what Jay Powell has been saying and doing. And, you know, he's stopped the tightening because the economy is slowing down, but everything's OK. So is it a Goldilocks scenario? Or what do you see in 2019?

STEVE RATTNER: I think Jay Powell was right to do what he did. It is very unusual for a Fed board and its chairman as the spokesman, effectively, to in one meeting announce they're going to continue raising rates and literally a month later announce they're not going to continue raising rates. But as Keynes was reported to have said but didn't say, when the facts change, I change my mind. What he--

ANDY SERWER: He never really said that?

STEVE RATTNER: I don't think he really said that-- no. I've tried to find it, and I don't think so. And so we are looking at a fairly worrisome global picture. The IMF has been-- everybody's been revising down their economic forecasts for global growth. We can take a quick tour around.

Europe is very weak. Italy is actually technically back in recession at the moment I believe. Germany had a negative quarter last year, but that was probably aberrational. And then, of course, you got Brexit hang over Europe. So Europe's got its set of problems.

China has its own set of problems, which had to do with too much credit and kind of over-leverage. But then we threw the trade war on top of that. And so the Chinese consumers have pulled back, and so things in China are quite slow.

Modi has his hands full in India with his reforms that are not going perfectly, shall we say. Brazil has a new president. So there's a lot to worry about around the world.

I think it is a little bit of Goldilocks in the sense that I don't know which way it will tip. We could continue to muddle along at this growth rate, which is the likely scenario. But could we go into recession? Sure we could.

ANDY SERWER: I mean, so there's a possibility into your mind of a recession before the 2020 election?

STEVE RATTNER: I think you have to-- yes. And I think there's a couple of ways to think about it. First of all, this is the second longest recovery in modern history in the US. In June, it will become the longest recovery in history in the US.

Economists say that recoveries don't die of old age, except they do. You start to build up imbalances. Things start to get off track, and then you have a recession.

And right now we have, obviously, a difficult situation in the housing sector. We have auto sales plateauing at best and so forth. And so I think 25% of economists in a recent "Wall Street Journal" poll expect a recession in the next 12 months and an even higher percentage before the 2020 election.

ANDY SERWER: In a recent op-ed you wrote in "The New York Times," I guess it's kind of a rebuttal for Congresswoman Ocasio-Cortez's suggestion of having that 70% rate on income over $10 million. You talked about a capital gains adjustment. Why would that be a better tax? And set that out--

STEVE RATTNER: Well first, my problem with her proposal is even though I think higher tax rates on income are possible-- we're at 37% at the moment at the top. When I started my working career, it was 50% for wage earners. And then it went down, and then it went up. And it's been moving around, and my work ethic hasn't changed.

So if you want to raise my taxes to 50%, I can probably still go to the office every day happily. But she wants 70%. And on top of that, in New York you have another 12.7%, which is now not deductible. So you're talking about an 82.7% marginal rate. And I think at some point people say, I'm just not going to work.

It's interesting there's a slight side note, but I don't know if you saw this. But Governor Cuomo said the other day that tax collections in New York are going to be $2.3 billion below forecasts, and a hunk of that are wealthy people leaving New York because of the loss of the state and local deductions. So people do respond negatively to extremely high tax rates.

Number two, I think the tax on capital gains is too low. I don't see why capital should be taxed less than labor. The argument used to be, well, we have a 35% corporate tax rate, so this is really a form of double taxation. Well, now we have a 21% corporate tax rate. So why not take those 14 percentage points and put them onto the capital gains rate? And that would coincidentally bring it to the same level as ordinary income.

So that's sort of how I think about it. I'm all for raising taxes on the wealthy. But I want to do it in a way that is additive to the economy, not punitive to it.

ANDY SERWER: I want to shift gears and talk a little bit about the media. I mentioned "The New York Times." That was your old job. You used to be a reporter at "The New York Times."

STEVE RATTNER: Yes, just around the corner from here.

ANDY SERWER: That's right. Go right across the street over there. And it's interesting that the former editor, Jill Abramson, has a new book out where she talks about "The Times," and "The Post," and "Buzzfeed and vise." And I'm just wondering what your take on digital journalism is, Steve, in terms of places like Huff Post and Buzzfeed? How sustainable is that business do you think?

STEVE RATTNER: I think what we're seeing is it's tough. And it's tough because first, there are no barriers to entry. So you have a lot of competitors. Secondly, even worse, there's no real pricing power on the advertising side that when you're basically trying to sell banner ads or display ads, there's an unlimited inventory.

And so it's very hard to achieve the kind of pricing power that a Facebook or a Google or somebody with a really pay for performance type of advertising. And ultimately, I think you're going to find that these forms of media are going to need to have subscription revenues to go along with the advertising revenues. You know, 15 years ago people said, oh, the internet's all about free. But you can't run a media business, I don't think, and "The New York Times," and the "FT," and the "Washington Post," and all the older media who have successfully implemented pay walls have found that-- that you can't run it for free.

ANDY SERWER: What's your take on how "The New York Times" is doing in terms of digital property. The news they cover, the business model, et cetera.

STEVE RATTNER: Well look, I am a bit of a partisan here, but I still think "The Times" is amazing. And when I think back on the depth of the news report, the size of the newsroom staff what it did when I was a reporter, which is a long time ago, 40 years ago. It's incomparable.

You still open that paper or you go online, and you see these incredible investigative reports. You see the explanatory journalism. You see the depth of the coverage. What's happened is-- and it's unfortunate in a way-- is that a lot of the local newspapers have withered or even died. And "The Times," and "The Washington Post" to some degree, "The Wall Street Journal"-- the quality media are going to take their place for a national audience and an international audience. And that's really what you see happening.

ANDY SERWER: Maybe less local news, though, out there? Right

STEVE RATTNER: Local news is a problem. It's a serious problem. I think that certainly whatever the issues are in Washington, they're just as big in the state houses around the country. And you really need a robust local to hold these politicians accountable, and that is a bit scary. I think there are some nonprofit models that could be explored using, perhaps, government tax revenue or things like that or simply for-profit local digital operations. But we're going to need to somehow resuscitate local coverage.

ANDY SERWER: Another facet of the media-- streaming in entertainment. My understanding is you're friendly with Brian Roberts of Comcast. They've announced they're getting into the business through NBC. I wonder what your take is on that as these companies try to compete with, say, Netflix.

STEVE RATTNER: It's going to be very interesting to watch. The one besides-- obviously you have Netflix, you have Amazon. And then interestingly and maybe surprisingly in some ways, Disney is really the most formidable next competitor at least certainly in terms of where they are. And they're making a big. Bet they're taking a lot of their content-- most of their content back from Netflix, giving up all those royalties and packaging it into their own streaming product.

And what everybody is really betting on-- it's a little bit like HBO. What everybody's betting on is that you have one or two shows that are so compelling, whether it's "House of Cards," whether it's the "Marvelous Mrs. Maisel" or whatever it is that you happen to like. You have one or two shows that become-- "Game of Thrones"-- must-watch television. And people will pay $9.95 a month for that even though there's really only a few things they're getting that they absolutely have to have. But it's the future, and Comcast will have to be in the business. It will be competitive. There'll be winners and losers, but it is the future.

ANDY SERWER: I always thought the model was pretty good actually if you're paying $10 a month, and it's only one show you watch. Well, compare that to going to the movies. I mean, it's not a bad value, is it?

STEVE RATTNER: It's not. And then if you also think about the fact that the video portion of your cable bill is probably $60, $70, a hundred dollars a month now and you can replace that with five or six streaming services-- maybe save a little bit of money and get what you want. That may be the future. There are some services like ESPN, which, as you know, commands the highest carriage fees that they're going to have to figure out what their business model is going to be going forward.

ANDY SERWER: Part of Disney. What about Facebook and Google? Obviously, they're a part of this ecosystem, and there's been a lot of hue and cry about how they oversee their businesses privacy, national security. Do you think these companies need more regulation? Or any regulation, I guess, at this point.

STEVE RATTNER: I think they need something. First of all, I think you have to say they've been tone deaf. Now, they're out in the West coast. Some of them have some background that should lead them to understand better the ethos, the mood, the Gestalt, if you will, of the country and the world. But they seem to have missed it, and they seem to be always a step behind what the issues are going to be.

And I think the consequences of that could be very severe. And in an extreme case, you could imagine the government breaking up Facebook. They have Instagram. They have WhatsApp as the core business. Maybe that should be broken up. Those will be things you hear.

The privacy thing is obviously an enormous issue. And so I think they're sort of trying to get ahead of it. But they've really got to get ahead of it, or there's going to be regulation. And if they don't get ahead of it, I would be for some form of regulation.

ANDY SERWER: What type of regulation might that be?

STEVE RATTNER: Well, I think you can look, for example, at what Europe did around the GDPR, the privacy regulations. The right to be forgotten-- things like that. The right to own your data. The right, you know, for them not to be able to use your data in any other way or without your consent. I mean, those are the areas that I think people are concerned about and rightfully so.

ANDY SERWER: Maybe going into a little biography here, Steve, you transitioned from "The New York Times" to Wall Street. Some people do that. Some people go the other way. What was that like, and how much of an adjustment was that for you?

STEVE RATTNER: It was interesting. Look, I was young. I was 30 years old. I did it. I said to myself, you know, you can start at the bottom, do it all over again, and see what happens. And yeah, it's different in a lot of ways. I didn't-- I barely knew how to turn on a calculator when I showed up at Lehman Brothers in 1982. But, you know, you figure it out.

And there are, interestingly enough, some skills that I think are transferable, or helpful anyway. Being able to write is actually a useful thing even in business-- to be able to write, in this case, good memos and good presentations. But the other thing that's probably more valuable is learning how to ask questions.

And when we do due diligence on a company, it's no different than what you, as a journalist, do when you interview somebody. You're asking questions. You're trying to figure out what the truth is. You're trying to get all the information. And having spent almost nine years doing that at "The Times" was actually a helpful tool.

Did I know as much as someone who had spent nine years in investment banking? Of course not. But I had some-- and I had been around the world, you know. I had interviewed CEOs. I had spent time with business people. I was more comfortable in those settings frankly, than probably most people at the age of 30 because I was sort of thrown into it by "The Times." And it was an exciting new challenge.

I went into it saying, all right, I'll do it for a couple of years. And if it doesn't work out, I'll go back to Journalism. And here I am-- what is it? Almost 40 years later, I'm still here.

ANDY SERWER: But you're also kind of doing some journalism as well-- a little bit, right?

STEVE RATTNER: Well, people say to me, do you miss journalism? And I say to them, I miss journalism when there's a big story out there that I will be covering that I'm not. And right now there is a big story, which is the economy, the deficit, our economic policy, what kinds of new programs we should have to fix the issues, whether it's green new deals, whether it's Medicare for all. These are all the issues that I covered as a journalist-- a different form obviously. And so I have an itch that I have to scratch, and I do it by writing for "The Times" a couple times a month or whatever.

ANDY SERWER: And going on MSNBC.

STEVE RATTNER: And I do "Morning Joe" once a week. And I do my charts on the economy and on other things, which is fun for me. And I seem to get a reasonably good reaction.

ANDY SERWER: Right. But since you are a Wall Street guy, Steve, I have to ask you about the stock market and where you think things are headed right now. What is the market telling you, and how are you positioned for 2019 going forward?

STEVE RATTNER: So it's an interesting state of affairs. Because of very strong earnings last year in part because of the corporate tax cut combined with the fact that the stock market did come down a good bit in the fourth quarter, the market multiples today are actually slightly below a 10-year average-- about 15 times forward earnings for the S&P. So the market does not seem overly expensive.

Secondly, I've always believed that if you tell me what's going to happen in interest rates, I'll tell you what's going to happen to the stock market. Because the stock market is the inverse of interest rates. And for a long time in the last few years we had the dividend yield on the S&P above treasuries, and so you could get a better rate of immediate return plus appreciation. So obviously the stock market was going to go up.

So my point is that when Powell came out in December, announced they were raising rates, announced they were going to continue raising rates, the market rolled over. For a variety of reasons in January, a month later, he and the Fed board reversed course and essentially said no more rate increases. If you look at Fed futures at the moment, they show no rate increases and actually about two years from now a rate decrease.

All of that is actually good for the stock market in my opinion. It puts a floor under the stock market. And so we're constructive. Now, that said, we're not market timers. I'm not a market timer. Every time I've tried to do that, I've probably been wrong. So we generally stay fully invested. But we tweak things at the edges, and right now we're feeling pretty constructive.

ANDY SERWER: I want to go back in time a little bit to when you were the auto czar in the Obama administration. What was the most difficult decision that you had to make when you were trying to strike a deal between the auto companies and the government?

STEVE RATTNER: Well, the most difficult decision was probably in our lab, which was the question of whether you could put an auto company into bankruptcy and have it come out the other side. Because airlines, for example, go bankrupt all the time. But your relationship with an airline starts when you get on the plane and ends when you get off the plane in Los Angeles or wherever it is you're going.

When you buy a car, you have a seven-year relationship on average with that car. And you want warranty service. And then at the end of that, you want a high residual value when you go to sell the car. And we were afraid. And Rick Wagner, the CEO of General Motors, was deathly afraid, and I understood why. The moment you-- there had never been a company like General Motors going into bankruptcy. That the moment you put it in bankruptcy, people stopped buying the cars, and then no amount of government money can save it.

So that was probably our toughest decision. But it was the only right one. There was no way forward with those companies except to use bankruptcy to get rid of their liabilities and restructure them.

ANDY SERWER: Any regrets about the whole process-- things you wish you had done differently?

STEVE RATTNER: Sure. There's always regrets you have. I regret a little bit the way that we fired Rick Wagner-- the way that I fired Rick Wagner. I'm a very direct person. And so when we decided to do it, I just went and did it.

In retrospect, we should have worked more with the GM board and socialized it more, and it would have been probably less threatening to people when they saw the government reaching out. The president in his speech at the end of March was pretty tough-- and this is on me-- on the Lenders to Chrysler-- the hedge funds and investment because they had been very difficult with us. And that brought a cascade of the government getting into Wall Street.

So there's a few things I would have done differently. But honestly, I'm a little surprised. I was a little surprised at how well that actually worked, you know. It's like baking a cake with a recipe you've never used before-- nobody's ever used before-- and you don't know how it's going to taste. And it actually worked out pretty well. Look, we've got pretty healthy auto companies out there at the moment.

ANDY SERWER: The business is changing though right now going forward with climate change, emissions, electric cars. Are we going to have a vibrant US auto industry? Or is it all going to be Tesla? OR what's it going to look like?

STEVE RATTNER: Well, it's so interesting when we did the restructuring. The words "autonomous driving" were never uttered. The word-- to my recollection. The word "ridesharing" was never uttered to my recollection. We did talk about electrification, but there was zero in the projections that we were working with for electrification. So in less than 10 years, it's changed dramatically.

I think the biggest question for the auto companies is probably ridesharing. Because it raises the question of how many cars people are going to own. A car is most family's second biggest capital asset after their house. It's only used 4% of the time on average. So obviously ridesharing makes a lot of sense, and that could lead to a very different level of auto sales going forward.

Autonomous driving-- I think GM particularly has done a great job of staying ahead of that when they bought Cruise, which has turned out to be an incredibly valuable asset. So I'm proud of the way they've responded to that. And electrification-- they're obviously working hard on as well. But I think ridesharing is a real question mark.

ANDY SERWER: After you left the Obama administration, Steve, you faced a pay to play scandal involving an investment in your private equity firm received from New York State pension fund. What happened there? And is it something you regret?

STEVE RATTNER: Well, I certainly-- look, my view was and still is that I did not break, New York law. I did not actually pay any fines to New York. I paid some restitution, as did my former firm. So there was no finding that I had done anything wrong. We simply all agreed let's just move on from this.

But the fact that I ended up in front of the attorney general of New York and the SEC-- obviously, I regret anything I did that caused them to question whether I had operated appropriately. I've been in the business world for 40 years. Nobody has ever questioned my integrity, or my character. They've certainly disagreed with me about a lot of things. You know, people don't like me, whatever. But nobody's ever said I wasn't honest, and this was one foot fault, if you want to call it that, that obviously I wish hadn't happened.

ANDY SERWER: Were there political motivations on the other side perhaps?

STEVE RATTNER: It's always hard to know. I had some real issues with the way-- particularly the attorney general handled it. And I spoke out about those, and I don't regret speaking out about them. I think it was-- I think there was a lot of grandstanding that went on. But I also probably could have done some things differently to not end up in front of them in the first place.

ANDY SERWER: Let me ask you-- looking forward-- presidential election 2020. The Democrats-- I think it's a cast of thousands at this point. You're involved in democratic politics. I don't know if you have a favorite right now. If so, please tell us who that person is or what's the process for getting to a favorite or favorites?

STEVE RATTNER: I'm happy to tell you my favorite. My favorite is Michael R. Bloomberg and not just because he signs my paycheck. But look, I'm a centrist. I am a Democrat. I can't remember whether I voted for a Republican in my lifetime or not-- probably I did. But for the most, part I vote Democratic.

But I do worry about the Democratic Party. I do worry about the country in that we're being pulled to these extremes-- that the Republican Party has gotten more conservative and the Democratic Party has gotten more liberal, or progressive, or whatever you want to call it. And I'm all for progressive ideas, but I want them to be done responsibly.

And so I'm looking for a candidate who fits those criteria. Michael Bloomberg certainly does. And then beyond that, I don't know. I mean, Joe Biden is maybe in the mix. Amy Klobuchar, who I'm a great fan of may be in the mix. Steve Bullock, the Governor of Montana, who you may never have heard of, is terrific.

John Hickenlooper from Colorado-- the governor. Michael Bennett, the senator from Colorado. Those are the kinds of people that I would love to see get some traction as this thing unfolds.

ANDY SERWER: And I have a bunch of follow up questions. First of all, Michael Bloomberg-- is he just going to tease us again, though, Steve? I mean, you're close to him. Is he really going to run this time?

STEVE RATTNER: I don't know because, honestly, I don't think he knows. And he's very open. What you've heard him say publicly is the same thing he says privately that he would only run as a Democrat. Running as an independent makes absolutely no sense, and we can talk about Howard Schultz if you want. And Mike basically is a Democrat.

Like me, he's a centrist. He doesn't agree on every bit of democratic dogma. But fundamentally, he's progressive. Fundamentally, he believes in trying to help the people who are left behind. And he's trying to figure out where there's a path forward for someone of his views and with his record.

What Mike is not going to do is his quote, "apologize" in the sense of going back over his positions and the things he did as mayor and say, OK, well, the democratic dogma now is against this. So I'm going to say I wish I hadn't done that. It's just might not Mike's nature. He's not going to do that. And so the Democrats are going to have to love him for what he is and what he has been, not try to recast him in some other vein. And whether the party is ready for Mike Bloomberg is the question he has to figure out.

ANDY SERWER: A lot of people admire him as a leader. I think you're probably referring maybe to stop and frisk or some policies like that. And there is also the notion-- I mean, he told me himself I'm a short Jewish guy from Boston who doesn't like guns. And then I said, well, don't make that your campaign slogan, right? And so is he electable do you think, Steve?

STEVE RATTNER: Well, I don't think being a short Jewish guy-- he actually calls himself a short Jewish divorced billionaire.


STEVE RATTNER: Those are the four adjectives. I don't think those really would be the issues honestly. And guns-- certainly he's on the right side of as far as both the Democratic Party and the country.


STEVE RATTNER: I think things like stop and frisk would be the question. Mike is a very non-ideological take pragmatic technocrat. And I say that as a compliment, and that's how I think of myself. You take issue by issue. And you say to yourself, what is the right answer here? He's very data driven, obviously. And we're in a world right now where people are more interested in ideology and emotion sometimes than they are in actual specific ideas and why they might work or why they wouldn't work.

ANDY SERWER: And you mentioned Howard Schultz, so I got to ask you. What's your take on his candidacy?

STEVE RATTNER: Well, I agree with Mike, and not just because I agree with Mike. Because I actually lived through this with Mike too three or four years ago when he thought about running in 2016. An independent candidacy just doesn't work because we have a little thing called the electoral college.

And if you don't get 270 electoral votes, you end up in the House of Representatives where there are Democrats and there are Republicans. There are no independents. So unless Howard Schultz sees a path for getting 270 electoral votes and you have to go state by state-- does he carry California? No. Does he carry New York? No. Does he carry Texas? No. Does he carry Florida? No. What does he carry besides the state of Washington maybe with a reasonable Democrat and even if it's Trump on the other side? Or else he ends up in the House of Representatives, and he's not going to get picked if you end up in the House of Representatives.

ANDY SERWER: Would he throw the election to Trump conceivably?

STEVE RATTNER: It's very possible. I think it's too early to know that. I think you can make an argument both ways. Obviously, the history that you see among the Democrats suggests that the Democrats think he would take more votes from the Democrats than from the Republicans. Look, we Democrats still have wounds.

In 2000, Ralph Nader cost Al Gore the election. In 2016, right, just two years ago, Jill Stein got more votes in Minnesota and Wisconsin than the margin by which Hillary lost those states. So if she had not run, Hillary might well be president today.

So we Democrats have raw nerve endings about these independent candidates, and I'm not against anybody running. It's America. You can run. But you have to understand the consequences of a candidacy that can't succeed and what it might do to the outcome.

ANDY SERWER: You seem concerned, I guess, about liberal or the left wing of the party maybe not being electable? Is that candidates like Elizabeth Warren or Cory Booker? What is your take on them and sort of the left half, if you will, of the Democratic Party?

STEVE RATTNER: Look, I live, I think, in a world of centrists-- of business people who are not that ideological. They tend to be socially liberal. They tend to be economically conservative or prudent. And I listen to them, and they are my view of-- they are the kind of swing voter that I spend time with.

A lot of them would have voted Republican, but they couldn't vote for Trump. So they voted for Hillary. And I think if you had somebody like Elizabeth Warren as the Democratic nominee, they simply wouldn't vote for her. I think Cory Booker we have to wait and see where he stands on a variety of issues. But Elizabeth Warren and Bernie Sanders have made their views clear, and I think they would be problematic for a lot of the swing voters, at least certainly the ones that I know.

ANDY SERWER: OK, Steve, this show is called "Influencers." And I want to ask you how you would like to use or how do you use your influence in the world?

STEVE RATTNER: Well, with respect, obviously in my day job as a money manager I don't influence anybody except the people who work for me because they have to do what I tell them to do. But my side gig, if you will, of writing and talking-- I just try to be a small voice on the issues that I know something about and care about, and to try to move the debate just a little bit in the right direction.

I wrote this piece the other day that you mentioned for "The Times" on capital gains-- taxing capital gains at a higher rate-- and I was really shocked at how much positive reaction I got, including from capitalists interestingly. That I thought I would be, you know, kind of excommunicated from the capitalist class. But I got quite a number of emails and calls from friends who make their living off of capital income who said, you know, you're right. We should be paying more on this kind of income.

Sure, there were a lot of others who said, what the hell's he doing? But that's how I try to have a little bit of influence. And obviously I'm a small voice in the wilderness, but it makes me feel good to exercise my vocal cords.

ANDY SERWER: All right, good stuff. Steve Rattner, thanks so much for coming by.

STEVE RATTNER: Thanks for having me.

ANDY SERWER: You've been watching "Influencers." I'm Andy Serwer. We'll see you next time.