Paul Tudor Jones, Founder of Tudor Investment Corp., joined hosts Stephanie Ruhle and David Westin for the debut of Bloomberg TV’s new flagship morning program, Bloomberg <GO>. He discussed how the Federal Reserve is approaching monetary policy, his Just Capital initiative, income inequality, and the need for humanity in capitalism.
On a major macro shift in the market, Jones said: “I think for the first time since Volcker, probably, you see the Fed managing, in my mind, they’re managing for the balance sheet to take out the tail risk associated, and associated with expanding debt virtually globally, and not to mention our federal debt. I think it points to a choppier market.”
On the problem of losing the humanity in capitalism, Paul Tudor Jones said: “I think clearly the topic of the day is income inequality. It it is something that is probably I think the biggest social challenge we have. I think it’s something that can really harm this country if we don’t deal with it. The question is, is how do you deal with that? And of course there’s public sector solutions and there’s private sector solutions.”
Paul Tudor Jones vieo and transcript below
[drizzle]STEPHANIE RUHLE: Paul Tudor Jones has just launched JUST Capital, aiming to rank top U.S. companies based on what is important to the public. JUST is surveying Americans to see what matters most. Paul, talk to us about this initiative, and welcome.
PAUL TUDOR JONES: Well thank you so much for having me here. Let me first thank you for hosting the National Fish and Wildlife Foundation benefit ago for us. It was our biggest event ever, and your passion came through and you were spectacular.
RUHLE: Thank you, Paul. Well your passion is not just fish and wildlife. It’s New York City’s poorest and it’s also to investing. So talk to us about what you’re doing right now.
JONES: So JUST Capital is really, I think its larger mission is to try to find the right balance between all the various stakeholders and how we do business in the country today. So you have shareholders, which we talk about all the time, you certainly talk about all the time on Bloomberg News, but we also have employees, customers, local communities, the environment.
And I think what JUST Capital’s mission is, and the JUST Index in particular, is to try to bring, again, dialogue and balance among all those competing interests. Right now probably we have so much of a focus on profits and shareholders’ interests, sometimes to the detriment of other very important stakeholders. And this is really an effort to give everyone a voice.
RUHLE: But Paul —
DAVID WESTIN: So that makes perfect sense, but you’ve been pretty stark in your terms. You’ve said that we’re losing the humanity in capitalism. And you say this as a capitalist. Exactly how bad is the problem?
JONES: Well I think clearly the topic of the day is income inequality. It’s — it is something that is probably I think the biggest social challenge we have. I think it’s something that can really harm this country if we don’t deal with it. The question is, is how do you deal with that? And of course there’s public sector solutions and there’s private sector solutions.
And when the idea of JUST Capital first surfaced, which was about three years ago really with a student in Deepak Chopra’s class at Columbia, who said, what if we put together an index of those companies who are pursuing justness in the way they operate the most, and we had this great index that people could invest in. And as Deepak, and I and another gentlemen named Paul Ciala (PH) began to talk about it, it became clear that this really was a good idea.
I will be frank with you, I have been on Wall Street 40 years. I didn’t even at the time know that there was $4 trillion socially responsible investing business already around that, which of course speaks to the fact that we really aren’t too focused on profits, as opposed to the other things that are really important in business practice.
RUHLE: Okay. And if you didn’t even know that that existed, and you are clearly someone who is ahead of the curve, how are we going to get people to care? When we talk about shareholders, they have got a much bigger megaphone than people going to Whole Foods saying they want to buy products that do good things.
JONES: Right. Well so, again, this is — this whole development of this idea, I kind of liken it to when the internet was first created.
JONES: Well I’m just saying you had a professor at UCLA who first connected to Menlo Park. Little did he have any idea that the ARPANET at that point in time would morph into what it is today, right? So when Deepak and I began looking into this, when the whole team began looking into this, we thought this is an investment vehicle. But then we realized what we were really talking here about is harnessing the power of the private sector.
And the private sector is $14 trillion. So you don’t need — it’s four times the size of the public sector. So addressing something like income inequality, yes, you can try public selector (PH) solutions. Yes, you can try the tax code.
RUHLE: (INAUDIBLE) already.
WESTIN: Well —
JONES: But the elephant in the room is moving the private sector, both on the consumption side, where employees work, what kind of products we make, how companies manage themselves in the boardroom. That’s where you’re really going to have substantive change.
WESTIN: Yes. Now there are different views on this, as you know. I mean there’s a lot of people who are coming to your view there’s a real problem in income inequality. Some people think like in earned tax credit could be a solution to it. When we talked to Warren Buffett recently, who is very concerned about income inequality, and who suggested earned come — an earned income tax credit is the way to go. I think we have a bit of that.
WESTIN: He was talking about how rich the economy is, but he is very concerned it’s not getting shared with everybody.
WESTIN: But again, he thinks an earned income tax credit is the way to go. You think this private sector approach would be more effective.
JONES: Well, look, Rome wasn’t built in a day. And it wasn’t built by one carpenter, right? There are going to be many tactics to address this. And certainly our idea of creating an index of the 1,000 largest companies in America and ranking them from one to 1,000 based on their justness, is but one tactic, but I think it’s an important tactic. And I think the key feature of what we’re doing in this ranking, because there are many indices out there, right? Americans —
RUHLE: I want to pull it up while you’re talking. Let’s pull this up. We have a graphic of it.
JONES: There are —
WESTIN: When are you going to have it up and running?
RUHLE: There we go.
JONES: I think, well