♪ he is the american success story, the sum of a plumber who went to night school at nyu for business. ken langone fought his way onto a wall street that did not want him and put together important deals, culminating in cofounding home depot, now a national chain with 300,000 employees. he is the first to say he could be rough around the edges and he is not afraid to speak his mind, a supporter of donald trump. on this edition of bloomberg big decisions, ken langone.

welcome to big decisions. ken: thank you for having me. david: you and i both know, you always said you are better off missing five or six good deals than making one that one. ken: i tell them the best deals i ever did are the ones i did not do. david: what are the ones that you are glad you did not do? ken: i will not name names. i do not understand what i was getting into. where i did not understand the business. where the surviving company's management, it was obvious they did not have basic ship skills. walmart the great company? and kmart, which was a giant when walmart started and now bankrupt? it is part of sears and they are struggling? what is the difference?

people. are and david glass and now the guy who runs it now is pathless -- fabulous. david: when you take a look at a deal, how do you assess the character of leadership? what defines a good one? yeari met jeff bezos last and i told him i would love to spend time with them. he said he would like to meet frank blake who ran home depot, that he is retired. frank and i agreed to fly to seattle and have lunch. we have bunch of his boathouse. let me tell you why this guy is an winner. -- winner. ,he scope fabulous ingredients

smart and humble. him.nt to learn from when we left, i felt like my brain had been sucked out of my head. there is a leader. it is no accident amazon is the success it is. same with dates. same with the guys at google. look at the size of these companies, chile and other companies. look at the size of them. what happened to general motors? and ibm? they had so much when it started. i cannot emphasize enough to the people. david: you talked about humble. what about integrity? what has gone wrong? david: the me too movement -- ken: the me too movement is something else altogether.

i am going to say this. moonves is a friend of mine and always will be. i do not judge anybody. whatever it is, you do that, it is bad. do noteach of us remember the kindness of people, no matter their sin, something is wrong with us. i am 62 years in a month. we are nuts about each other. do not explain how a guy puts ahead on a woman or how he, but that is not the point. it is wrong. period. if you do it, you should be punished. that is it. david: the board should be on top of it. ken: that is one issue.

you want to be a ceo for one or two reasons. you want to be a ceo if you want to get something done or because you want to say you are the ceo. sometimes people are promoted for the wrong reason, and why? because the people made the decision to like them or they dress a certain way. i cannot explain that. i cannot explain it. i hope i do not do that. i feel if i can get a personal woman or man that can motivate , i want to beings kill them. not the killer in the sense somebody gets murdered. -- is his italian heritage, talking about killing somebody.

it is always about the people and do right. if you are going to fire somebody, leave them with their self-respect. walters.g fan of jack could call somebody into a room and let them understand not get the job done, but left them also with the notion they are good people. borrowing is a necessary part of capitalism, but if you cannot leave the person who did not work with some degree of self-respect and hope, you are not a good leader. david: you take a look at different opportunities. howdid they come to you and do you pick up the good ones? the jamie and i were on board of -- together.

i wanted jamie to become the head of home depot. jamie came back and said i want to stay at -- services. i wanted to have a bet with jamie. six years ago, jp morgan had warrants that were issued to the connection with a tarp debt, which jp morgan never wanted. we started buying warrants and jp morgan today is my second biggest home depot. david: where do you think capitalism has worked the best, and not to the individual but the country? ♪

david: you love capitalism. ken: i adore it. david: why? ken: because it works.

david: how do you know it works? ken: i know it works by virtue of my own life. my father was not a capitalist. he was a plumber. he did not make much money. my mother worked in a school cafeteria. the money they made by virtue of time in their hands. this, up but i have talent or inside or whatever and become a capitalist. i do not want to sell my guy am bragging but i wish i had a nickel every time somebody told me how grateful they are for what i have done that gives them employment, opportunities. david: where do you think capitalism has worked the best, and not to the individual but for society, the country? ken: what i do not understand is go to hungary, cuba, venezuela, go all over the world where they hate capitalism.

look at the quality of life of the people there and look at it -- the quality of life of the people who live here. we have things wrong in america that we have a lot of things right. the question is simple. which works better for everybody? there is no doubt capitalism. you want an example of socialism? our government would screw up a free lunch. -- over to private and watch it fly. we will get it right. david: it is not getting better for everybody. you can go places where people are living lives that you would not want to be living and children are raised in situations you would not want to be raised in. why is an n -- capitalism helping? ken: it is not allowed to. look at unemployment.

the lowest it has been. that is good. look at incomes. look at job opportunities. look at society in america. we are better off. i am not going to argue the point that the capitalists made a mess 10 years ago with the --crap.bt krapp you got to give them the blame. all of our hands are dirty. 40% oft it does not help the people does not mean it doesn't help 90%. what would be the percentage be if you did not have it? i argue it would be down and the reason, because capitalism works. every time i have an incentive to hire you, to make money for me, you have got a job.

the more valuable you become, the more i have to pay you. the more i pay you, the better you will like this. what i do not understand is, why are we not adjusting the issues that are going to determine quality of life and standard of living in america? mainly education. does that mean the government has to constrain capitalism? ken: no, the government made it easy. read in the early 90's about an american inheritance right to on your home. people who are not responsible should not own homes. that is what credit ratings are for -- for. the environment was less. guess what? you give a guy a chance to make a buck? he will take advantage. it may not be the right thing. david: are you concerned about

the growing wealth in income inequality? ken: yes. i had a meeting yesterday with andhead of the foundation we talked about income inequality. it is a two headed monster. how can you pay kids a lot of money if they cannot read and write? how? we have kids at home depot that make extraordinary sums of money from where they started. the woman that runs our u.s. stores today started out as a part-time cashier. she is african-american from jamaica. she runs 1800 stores. she makes a lot of money and you know what? she is worth everything we pay her and more. that is capitalism. it works.

does it work for everybody? no, but everybody does not have the same energy level, the same passion. david: it is also qualifications. you said you pay someone more because they are more valuable. education is important. what can we do in this country to fix our public education system? let me go back to me so you of the benchmark you can reference. eight weeks into my college ander, a professor calls me -- in, throws an exam book on the table and said that is the worst english i have ever seen. before, he beats me up too bad, he said you understand economics. how are you doing? he said you are going to be out in january.

is that what you want to happen? he says if i make an effort to help you, we do your part? i said yeah. he said that anybody ever tell you you were stupid? i said a lot of people. he said you believe them. you start by encouraging kids that inside each of them is something valuable and something that deserves to be developed. school and a charter people say, well, you could argue there are school programs and they say, you do not understand. people started a disadvantage with their home life. i say, guess what? up have to do more than make for what those kids do not have at home. do not use it as is and -- an excuse. use it as a reason.

that is where it begins. quality of instruction. be able toould master the subject they are teaching. david: we do not have the education system you described. we do not have teachers qualified. what can we be done? how can we get where we are to now? ken: this now becomes political. first of all, these teachers unions so enormous sums of money at campaigns. they are staggering. asked chuck schumer if he is public to take on the school teachers union. that is part of his constituency and yet he is raising help about a kid not saying able to come and texas from mexico. we got kids here we are not doing much for and worried about ringing kids in. you have nine kids, you cannot

beat them. you have a 10th kid. we have got a problem in america it haslic education and got to be dealt with objectively without sacred cows. david: is that a federal issue or state issue? ken: it starts out by being a home issue, but if there is not forme, we have to make up what the kid does not start with in-home. go from there. david: president trump, was not your first choice. you came to believe in things he stood for. ken: he won by default. ♪

♪ david: president trump, was not your first choice but you came

to believe in things he stood for. ken: he won by default. in my voice -- vote. david: but you agree with him. ken: i agree on a lot of issues. -- watchtold me wash what he does. i am pro-immigrant but i know my grandparents had to come through ellis island and fill out papers and do all the things they had to do and they could not wait for the day they became an american citizen. we need immigrants in america. but this notion of letting whoever can come in to come in, do you want that ms 13 -- the ms 13? guess what? i am wrong. that is the style that got him elected. whod: not everybody

supported president trump supported him on all the issues. for example, spending and trade. ken: i am bothered by the spending. at some point, the grim reaper shows up. we cannot long suffer trillions of dollars of debt. there is no way to rationalize that it is ok to have this kind of debt. david: what about trade? ken: if this is a ploy, god bless him. david: if it is not -- what if it isn't not -- what if it is not a ploy? ken: go back to the 30's. it does not work. believer, passionate in and of itself, if he is a passionate believer he is going to pay a price. reelected.t get if this thing backs up on him.

understand something. he said something the other night and i find his appearance humerus. i was listening to him in columbus and he said something profound. blame thedo not chinese leaders. i blame our people. the point is, how do we get to where we are? explain why when we ship a car tariff is, the multiples of the tariff they pay to have a car in america. explain how it happens that china and the getting $500 billion. how does china and up with a trade surplus of $50 billion a year? david: we do not have to buy the stuff and if we are running a big budget deficit, you almost

begin traded us it. ken: they need us. they have the surplus. that tells me we have got leverage. when a vendor comes to home depot, to sell home depot a product, he wants access to our customers through our boxes. we have leverage. we america are the home depot's, the china. where is the leverage to say, come on. maybe we will have a better deal for our people. intellectual property. these are valid points. what has every guy done in the past? push it down a road. david: intellectual property, which everybody agrees is a problem with china, the europeans are on our side. is it the smart move to get the other folks on your side to go after china, rather than make m&a's?

-- enemies? ken: let's go back to the beginning of the discussion. if i were trump, i would wear my issues quietly with mexico. let's go get them. i am prepared to say his way may be right. we are going to see. i would not have done it. i said earlier, his method leaves something to be desired on my part. he won the election. -- sure people and america are saying, i could have one. --won. david: he ran as a great ceo. given what you said, would you put him in charge is a major corporation? ken: i think he was a real estate speculator and developer. big difference. i do not think he was bragging about his business career. he had more bankruptcies than

god had children. i think he was saying the right things, make america great again. ohio and pennsylvania, like it or not look at those rallies. they stay there for hours. they wait 10 hours to get a seat in front. david: as you approach the midpoint in your career, looking back as you do, what would you done -- have done differently if you could do it again? ken: you know my problem with that question? if i move this up, what happens to that thing down there? david: the butterfly effect. ken: i have to look at the totality and say i made a lot of bad decisions. i make good decisions. i made mistakes.

i did a lot of things right. game.k it is a risky that i did not always get ed off.ff --piss i wish i was more rational when i was angry. i wish i had more compassion for people. i wish i had more sensitivity to the plight of other people. i still do. wish i was more interested in history as a kid. i cannot get enough of history now. i wish i did not swear so much but i found -- find certain words expressive and to the point. there is no doubt in my mind if i had not married my wife, i would not be where i am. i know without elaine, this would not happen. david: we are glad it happened.

ken: i am thrilled. david: thanks for being here. ♪ . . xfinity mobile is a new wireless network

designed to save you money. whether you use your phone to get fit. to find meaningful, thoughtful, slightly-weird gifts. or just to know which way you're facing right now. however you use it, your wireless bill is about to cost a whole lot less. ask how you get xfinity mobile included with your xfinity internet. so you just pay for data -- by the gig or unlimited. saving you hundreds of dollars a year. plus, get $300 back when you buy a new smartphone. xfinity mobile. it's simple. easy. awesome. click, call or visit a store today. this is moving day with the best in-home wifi experience and millions of wifi hotspots to help you stay connected. and this is moving day with reliable service appointments in a two-hour window so you're up and running in no time. show me decorating shows. this is staying connected with xfinity to make moving...

simple. easy. awesome. stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today. manus: you are watching the "best of bloomberg daybreak: middle east." the manager stories writing the headlines this week. turkey rattles markets as president erdogan stands defiant in the face of u.s. tariffs. the lira gets smashed, emerging markets feel the pain as contagion spreads. plus, is saudi arabia about to help? elon musk takes tesla private. is the uae, demand for properties missing on second-quarter net income. we hear from the company's cfo. ♪