WHEN: TODAY, FRIDAY, December 2, 2016
WHERE: CNBC'S "CLOSING BELL"
Following is the unofficial transcript of a FIRST ON CNBC interview with Blackstone Chairman & CEO Stephen Schwarzman following his appointment as chair of President-elect Trump's 'President's Strategic and Policy Forum.' The interview aired today on CNBC's "Closing Bell." Following are links to video of the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000573115, http://video.cnbc.com/gallery/?video=3000573114 and http://video.cnbc.com/gallery/?video=3000573113.
All references must be sourced to CNBC.
GRIFFETH: THANKS VERY MUCH. WE HAVE PRESIDENT-ELECT TRUMP ANNOUNCING THE PRESIDENT'S STRATEGIC & POLICY FORUM WHICH WILL BE CHAIRED BY BLACKSTONE CHAIRMAN & CEO STEVE SCHWARZMAN. HE JOINS US NOW ALONG WITH WILFRED FROST IN A CNBC INTERVIEW.
FROST: BILL, THANKS VERY MUCH. YES INDEED I AM JOINED BY FOUNDER, CHAIRMAN AND CEO OF BLACK STONE STEVE SCHWARZMAN WHO AS YOU SAID HAS BEEN APPOINTED CHAIRMAN OF DONALD TRUMP'S STRATEGIC & POLICY FORUM. STEVE, CONGRATULATIONS. THANK YOU FOR HAVING US.
SCHWARZMAN: THANK YOU. GLAD YOU ARE HERE.
FROST: GREAT TO BE HERE PARTICULARLY SO SOON AFTER THE ANNOUNCEMENT WAS MADE FIRST ON CNBC. WHEN DID YOU SPEAK WITH THE PRESIDENT-ELECT AND TELL US ABOUT THAT CONVERSATION?
SCHWARZMAN: I SPEAK WITH HIM WITH SOME FREQUENCY. ABOUT A WEEK AND A HALF AGO HE APPROACHED A VARIETY OF DIFFERENT ALTERNATIVES OF THINGS THAT I MIGHT BE ABLE TO DO AND THAT WAS IN THE CONTEXT OF HAVING SUBSTANTIVE DISCUSSIONS ON ALTERNATIVES OF WHAT TO DO WITH THE ECONOMY AND OTHER THINGS. HE ASKED IF THERE WOULD BE ANY CHANCE THAT WE CAN MEET ON A REGULAR BASIS TO PROVIDE ADVICE IN AREAS WHERE HE WASN'T AS FAMILIAR AND IDEALLY IF POSSIBLE HE ASKED ME IF I WOULD FORM A GROUP OF TERRIFIC PEOPLE WHO WERE EXPERIENCED AND WISE AND SORT OF EXPERTS IN THEIR FIELD TO JOIN FOR MEETINGS WHERE HE WOULD BE ABLE TO LEARN FROM THEM WITH MEETINGS ON A REGULAR BASIS AND I SHOULD PICK THE PEOPLE AND HE WOULD REVIEW THEM AND HE LOVED THEM ALL. AND THERE WAS NO ISSUES OF PARTISANSHIP. HE SAID I DON'T CARE ABOUT THAT. I DON'T CARE ABOUT ANYTHING BUT TALENT AND WISDOM AND JUDGMENT.
FROST: SO YOU PICKED ALL OF THESE. IF WE LOOK AT THE BREAK DOWN OF THE TYPES OF SECTORS THAT THESE PEOPLE COME FROM THERE IS A BIG TILT TOWARDS THE FINANCIAL INDUSTRY WELL COVERED WHETHER ITS WALL STREET ITS ASSET MANAGERS ITS BANKS ITSELF. SOME PEOPLE HAVE NOTED THERE IS NO SILICON VALLEY THERE'S NO FACEBOOK OR AMAZON OR MICROSOFT THAT WAS A CHOICE YOU MADE NOT HIM.
SCHWARZMAN: WELL NO NOT REALLY. IT WAS SORT OF INTERESTING. I JUST GOT AN E-MAIL FROM BILL GATES WHO SAID I CAN'T DO THIS ON A REGULAR BASIS BUT IF YOU NEED ME JUST LET ME KNOW. THERE ARE MANY PEOPLE SORT OF WHO RUN THOSE TYPES OF COMPANIES WHO ARE LIKE FLAT OUT AND ALL HAVE SAID TWO CASES I CAN'T DO THIS RIGHT NOW BUT CAN YOU GIVE ME A LITTLE BIT OF TIME. I'M REALLY INTERESTED IN THIS.
FROST: YOU MENTIONED AT THE TOP THERE WAS LOTS OF CONVERSATIONS BETWEEN YOU AND PRESIDENT-ELECT ABOUT HOW YOU CAN HELP. DID INITIALLY HE OFFER YOU MORE? DID HE OFFER YOU A CABINET POSITION?
SCHWARZMAN: THAT IS NOT A RELEVANT DISCUSSION. SO THIS IS SOMETHING THAT WORKED FOR ME BECAUSE I CAN'T DO SOMETHING FULL TIME GIVEN ALL THE DIFFERENT THINGS I'M DOING NOW BOTH NOT FOR PROFIT AND FOR PROFIT.
FROST: OK AND YESTERDAY IF WE CAN FOCUS ON ONE STORY THAT HAS A LOT OF ATTENTION IN THE BUSINESS WORLD, PRESIDENT-ELECT DONALD TRUMP WENT DOWN TO OHIO AND ANNOUNCED THIS DEAL WITH CARRIER THAT 1,000 JOBS WOULD BE STAYING. IN HIS SPEECH AFTER THAT HE SAID THERE WOULD BE CLEAR CONSEQUENCES FOR COMPANIES THAT TRIED TO DO THE SAME THING. IS THAT NOT DANGEROUS IN THIS WORLD? IS IT SOME KIND OF CORPORATE SHAKE DOWN? ARE YOU A SUPPORTER OF THAT TYPE OF RHETORIC FROM A POLITICIAN?
SCHWARZMAN: THIS WAS THE FIRST TIME FOR ME. I HEARD IT WHEN YOU HEARD IT. AND YOU KNOW THE ISSUE IS HOW DO YOU BUILD THE UNITED STATES, HOW DO YOU CREATE JOBS OR IN THIS CASE KEEP JOBS. AND THAT'S AN ELECTION PROMISE OF SORT OF DONALD TRUMP AND IT'S AN IMPORTANT THING TO DEVELOP AND CREATE JOBS HERE IN THE UNITED STATES. SO I ANTICIPATE THAT THERE WILL BE A VARIETY OF THINGS THAT COME UP THAT NOBODY REALLY THOUGHT WOULD COME UP AND THEY WILL EITHER BE DEVELOPED OR GO AWAY BUT THE BASIC INSTINCT NOT TO PUNISH PEOPLE PARTICULARLY BUT TO FIND A MECHANISM TO CREATE A VIBRANT ECONOMY IS SOMETHING THAT IS A GOOD OBJECTIVE.
FROST: BUT ON THE FLIP SIDE IS THERE NOW NOT GOING TO BE OPEN SEASON FROM OTHER CORPORATES TO COME TO THE GOVERNMENT AND SAY I'M CONSIDERING MOVING PEOPLE ABROAD, AS WELL? YOU HAVE TO GIVE ME THE SAME TAX BREAKS OR ELSE WE ARE GOING TO GO. IT CREATES A PRECEDENT THAT WILL BE FOLLOWED DOES IT NOT?
SCHWARZMAN: I THINK PART OF WHAT THIS ADMINISTRATION IS GOING TO DO AND I DON'T KNOW ON THIS ONE PARTICULAR ISSUE I KNOW ON OTHER THINGS BECAUSE THIS ONE JUST SORT OF DROPPED IN THAT THERE ARE GOING TO BE NEW THINGS TRIED. IT'S THE NATURE OF CHANGE AND SOME OF THEM WILL WORK, SOME WON'T. THERE IS NOBODY WHO NOT THE GOING TO GET THIS ONE THAT IT'S A SYMBOL IN A WAY OF THE SERIOUSNESS OF HIS COMMITMENT TO DELIVER TO THE MIDDLE CLASS AND LOWER INCOME PEOPLE IN THE COUNTRY.
FROST: AS YOU SAID, THAT WAS A BIG COMMITMENT ON HIS CAMPAIGN MAKE AMERICA GREAT AGAIN AND PARTICULARLY TOWARDS THE WORKING CLASS YET SOME OF THE APPOINTMENTS HAVE BEEN MADE TO THE CABINET AND SOME RHETORIC TOWARDS DEREGULATION OF CERTAIN SECTORS AND IN FACE THE WAY THE STOCK MARKET HAS PERFORMED IN A SECTOR SENSE BANKS HAVE SORED. I HAVE SEEN PEOPLE CALLING THE PHRASE IN FACT IT IS NOT MAKE AMERICA GREAT AGAIN THAT IT IS MAKE WALL STREET GREAT AGAIN. WHAT IS YOUR VIEW TOWARDS THAT AND THE GOLDMAN SACHS ALUMNI THAT ARE BEING APPOINTED?
SCHWARZMAN: I DON'T SEE THAT AS OVERWHELMING, COMPELLING NARRATIVE. WHAT HE HAS BEEN DOING IS PIB NG PEOPLE HE IS COMFORTABLE WITH. SOME OF THE PEOPLE IN FINANCE TOUCH ENORMOUS PARTS OF THE ECONOMY. A COMPANY LIKE OURSELVES FOR EXAMPLE HAS 300,000 EMPLOYEES WITH OUR PORTFOLIO COMPANIES IN AMERICA. SO YOU KNOW AN ENORMOUS AMOUNT OF STUFF AS COMPARED TO JUST ONE COMPANY. AND SO I THINK DONALD COMES FROM THE FINANCIAL SERVICES WORLD. I THINK HE TENDS TO PICK PEOPLE WHO HE IS COMFORTABLE WITH AND WHO ARE CONFIDENT. I THINK THAT IS WHERE THAL COMES FROM RATHER THAN ANY DESIRE REWARD ANY SECTOR.
FROST: YOU SAID EARLIER THAT YOU HAVE A FULL TIME JOB HERE AND OTHERS, INDEED, AS WELL,TOO BUSY AND PERHAPS CONFLICTED TO TAKE A FULL TREASURY – FULL CABINET POSITION. WHAT IS YOUR VIEW ON THE CONFLICTS OF INTEREST BETWEEN THE PRESIDENT-ELECT'S POLITICAL ROLE AND HIS BUSINESS ROLE?
SCHWARZMAN: I THINK THAT IS A TOUGH ONE BECAUSE HE IS SO INTERTWINED AND HIS LIFE HAS BEEN BASICALLY HIS COMPANY. AND PLAYING GOLF. THOSE ARE THE TWO PRINCIPLE THINGS THAT HE DOES. SO HE'S NOT ONE WITH A LOT OF HOBBIES. HE'S GOT ENORMOUS FOCUS. AND SO DISCONNECTING FROM THAT IS AN UNNATURAL ACT FOR HIM. I REALIZE THAT THE PRESIDENT TECHNICALLY IS NOT – IS SORT OF SUBJECT TO THE SAME EXACT CRITERIA AS CABINET PEOPLE. I THINK IT WILL TAKE A WHILE TO WORK THIS OUT. I THINK HE IS SENSITIVE TO THE ISSUE.
FROST: WHAT ABOUT YOURSELF NOW? CLEARLY YOU ARE ON AN ADVISORY BOARD. YOU ARE NOT TAKING A CABINET POSITION. HOWEVER, YOU ARE GOING TO HAVE A BETTER INFLUENCE AND A BETTER KNOWLEDGE OF UPCOMING POLICY THAN YOUR RIVALS AT APOLLO AND CARLYLE GROUP, TO NAME JUST BUT A FEW. IS THAT NOT A CONFLICT OF INTEREST?
SCHWARZMAN: GEEZ, YOU KNOW, I LOOK AT THINGS AND SAY WE ARE GOING THROUGH A PERIOD OF ENORMOUS CHANGE IN THE UNITED STATES. THIS WILL NOT BE REGULAR WAY. AND IF I CAN HELP MAKE THE COUNTRY BETTER, MAKE IT SAFER, MAKE POLICY LOWER RISK, IF WE CAN HELP BRING THE COUNTRY TOGETHER THAT IS SORT OF AN IMPORTANT THING AND IT'S AN OBLIGATION. I MEAN, PARTICULARLY AS YOU GET OLDER IN LIFE, YOU WANT TO DO GOOD THINGS. AND SO I DON'T KNOW WHAT TREASURED SECRETS I'M GOING TO LEARN. THAT'S NOT THE OBJECT OF THE EXERCISE.
FROST: IN THE PRESS RELEASE TODAY, STEVE, THAT DONALD TRUMP RELEASED WITH THE ANNOUNCEMENT OF THIS BOARD, THIS FORUM, IT SAID THIS. CEOS AND BUSINESS LEADERS WHO KNOW WHAT IT MEANS TO CREATE JOBS AND GROWTH ARE BEING APPOINTED TO THIS TEAM. HE HAS MADE THAT POINT A LOT BOTH ABOUT THE PEOPLE HE IS APPOINTING AND ABOUT HIMSELF. THAT HE BRINGS THIS PRIVATE SECTOR BUSINESS ACUMEN TO THE JOB THAT PERHAPS POLITICIANS DON'T KNOW, HAVEN'T EXPERIENCED BY CREATING JOBS BEFORE. ON THE FLIP SIDE OF THAT, IS THERE A RISK THAT HE LACKS SOME OF THE POLITICAL SKILLS THAT ARE NEEDED MOST NOTABLY WITH DEALING WITH CONGRESS AND ACTUALLY GETTING SOME OF THESE IDEAS THAT YOU, NO DOUBT, WILL HELP GENERATE ACTUALLY MADE INTO LAW.
SCHWARZMAN: I GUESS HE IS NOT A PARTICULARLY INEFFECTIVE POLITICAL PERSON SINCE HE SOMEHOW GOT ELECTED TO BE PRESIDENT. SO IF YOU START FROM THAT AS A BASELINE, AND THE FACT THAT A NUMBER OF THE PEOPLE HE IS INVOLVED AS CABINET PEOPLE AND PEOPLE AT THE NEW WHITE HOUSE ARE QUITE KNOWLEDGEABLE, QUITE SOPHISTICATED. AND REMEMBER, THERE IS A CONGRESS THERE AND THEY ARE THE SAME PEOPLE WHO HAVE BEEN THERE. THEY ARE ACCESSIBLE. THEY HAVE A VISION OF WHAT THEY WANT TO DO, WHICH IN MANY CASES, HAS A HUGE OVERLAP WITH WHAT THE NEW ADMINISTRATION WANTS TO DO. AND BETWEEN ALL OF THEM, I THINK THEY ARE GOING TO FIND COMMON PURPOSE.
FROST: I WANT TO PICK UP ON SOMETHING YOU SAID. IT'S THE SAME PEOPLE, IT'S A REPUBLICAN CONGRESS ONCE AGAIN, AS PRESIDENT OBAMA HAS JUST EXPERIENCED. IN THAT SENSE, DO YOU FEEL A LITTLE BIT SORRY FOR PRESIDENT OBAMA BECAUSE THERE IS UPBEAT EUPHORIA EVEN IN THE MARKETPLACE. A BELIEF THAT THE FISCAL EXPANSION THAT DONALD TRUMP WANTS TO DELIVER WILL IMPROVE GROWTH TO LEVELS THAT HASN'T BEEN POSSIBLE IN PRESIDENT OBAMA'S TERM. YET, HE HAD FAVORED FISCAL EXPANSION HIMSELF AT TIMES, BUT THAT WAS BLOCKED BY A REPUBLICAN CONGRESS. IS IT A LITTLE UNFAIR THAT IT MIGHT NOW BE PASSED BY A REPUBLICAN CONGRESS JUST BECAUSE THE PARTY HAS CHANGED AT THE PRESIDENT?
SCHWARZMAN: IT'S NOT SO EASY JUST TO PASS THINGS BECAUSE THERE ARE STILL TWO PARTIES THERE. AT THE MOMENT, I GUESS, THERE ARE 51 SENATORS AND THE MAJORITY OF TWO. THAT'S NOT MUCH OF A MAJORITY IF A LOT OF LAWS NEED TO GET TO 60 THE WAY THE CURRENT RULES OF THE SENATE ARE. AND SO THERE IS STILL GOING TO BE A LOT OF TUGGING –
FROST: A LOT OF TUGGING.
SCHWARZMAN: AND PULLING TO GET CERTAIN THINGS DONE. ONE OF THE ADVANTAGES ON THE SHORT TERM IS THAT THE CONCEPT THAT IS CALLED RECONCILIATION WHERE YOU CAN PASS TAX ORIENTED THINGS OF 50% PUTS THE REPUBLICANS IN A UNIQUE POSITION TO BE ABLE TO EFFECT TAX REFORM OF ALL TYPES, TO BRING BACK MONEYS THAT ARE $2 TRILLION THAT ARE OUTSIDE OF THE UNITED STATES THAT CAN BE BROUGHT BACK. SO THINGS OF THAT TYPE ARE GOING TO REQUIRE JUST THE 50% WHICH MAKES IT A LOT EASIER.
FROST: SO A LOT EASIER IN THOSE AREAS, BUT CERTAINLY STILL A LOT OF WORK AND TUGGING TO DO AS YOU SAID. IN THAT SENSE, IS IT POSSIBLE IN THE SHORT TERM THE MARKETS GOT A LITTLE BIT AHEAD OF ITSELF IN TERMS OF WHAT MIGHT BE DELIVERED?
SCHWARZMAN: MARKETS TEND TO ALWAYS OVERSHOOT WHEN THEY GET REALLY EBULLIENT. THIS HAS BEEN QUITE A RUN. BUT IT ALSO REFLECTS THE FACT THAT WE HAVE HAD A LOT OF DRAG ON THE ECONOMY THROUGH REGULATION. AND IN A WAY, THE SYSTEM NEEDS TO BE DEBUGGED. THAT DOESN'T MEAN ALL REGULATION IS BAD, BUT THERE IS A CERTAIN BALANCE. RIGHT NOW, AS A RESULT OF THE REGULATION, THE U.S. BANKING SYSTEM REALLY IS TERRIFIC. IT'S THE BEST IN THE WORLD AND IT NEEDS THE FREEDOM TO START DOING SOME THINGS LIKE MAKING MORE LOANS. YOU CAN'T GROW UNLESS YOUR BANKING SYSTEM IS EXPANDING AND YOU ARE EXTENDING CREDIT. WE HAVE BEEN SHRINKING. WE SORT OF HAVE, WITH LOW INTEREST RATES, ONE FOOT ON THE GAS AND, WITH REGULATORY OVERLAY, ONE FOOT ON THE BRAKE. AND SO WHAT WE ARE GOING TO DO IS TAKE OFF THE FULL STANDING ON THE BRAKE.
FROST: STEVE, I WONDER HOW THIS SORT OF STACKS UP IN TERMS OF MOMENTS OF YOUR LIFE. ALL THE ACHIEVEMENTS, THE NOT-FOR-PROFIT WORK WE WERE DISCUSSING JUST OFF CAMERA BEFORE AND THE SCHOLARSHIPS AROUND THE WORLD PARTICULARLY IN CHINA. BEING APPOINTED TO THIS ROLE, AS YOU SAY, TO GIVE SOMETHING BACK AS IT WERE AND MAKE A DIFFERENCE. DOES IT MAKE YOU VERY PROUD? ARE YOU EXCITED ABOUT IT?
SCHWARZMAN: YEAH. YOU KNOW ACTUALLY, WHEN I WENT TO COLLEGE, THESE WERE SORT OF VALUES THAT WERE TAUGHT. I GOT TO MEET A LOT OF, YOU KNOW, FAMOUS PEOPLE. I WAS JUST LIKE A MIDDLE CLASS AMERICAN. AND THERE WAS A CERTAIN OBLIGATION AND I HAD THAT WITH MY GRANDFATHER IN THE CHARITABLE AREA THAT IT'S YOUR RESPONSIBILITY TO DO THAT IF YOU CAN. I'M FORTUNATE THAT I CAN. BUT IF I CAN USE MY BACKGROUND FOR PRODUCTIVE THING FOR OTHER PEOPLE TO KEEP THE COUNTRY ON A GOOD COURSE, TO HELP OUT, TO TELL PEOPLE WHAT YOU KNOW IF IT IS USEFUL, THEN I'M VERY HAPPY TO DO THAT. NOT TO MAKE THIS ABOUT ME, THE PEOPLE THAT WERE RECRUITED FOR THE FORUM, BOTH REPUBLICANS AND DEMOCRATS, THEIR MOTIVES ARE ALL THE SAME.
FROST: THE SAME AS DONALD TRUMP'S MOTIVES?
SCHWARZMAN: NO. THE SAME AS THE MOTIVES –
FROST: OH, OF YOU. I KNOW. YOURSELF.
SCHWARZMAN: OF MYSELF TO HELP GET THE COUNTRY THROUGH THIS PERIOD OF CHANGE WHERE THERE COULD BE A TREMENDOUS NUMBER OF GOOD THINGS AND SOME OTHER THINGS JUST BY THE SHEER VOLUME OF IT AND THE NEWNESS OF THE GROUP THAT MIGHT LOOK A LITTLE ODD. THEY MIGHT BE RIGHT, THEY MIGHT BE WRONG, BUT IT IS WORTHY TALKING ABOUT THEM.
FROST: ABSOLUTELY, STEVE. AND I HAVE NO DOUBT THAT YOU AND THAT GROUP WILL HAVE HUGELY SIGNIFICANT IDEAS TO SHARE WITH THE PRESIDENT. I'M VERY GRATEFUL FOR YOUR TIME THIS AFTERNOON AND CONGRATULATIONS ON THE APPOINTMENT.
SCHWARZMAN: THANKS A LOT.
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