There are a few people who can weigh in on topics as varied as financial regulation, New York politics and Playboy centerfolds with as much authority and passion as Kenneth Langone. The billionaire recently sat down with us to offer his advice for Wall Street, Washington and those contemplating $2,000 escorts.
The Observer: What are your thoughts on the May 6 ‘flash crash’?
Mr. Langone: I didn’t think much of it. We dropped 1,000 or so, we came back up, the very nature of the volatility was clearly something in the mechanism of the market doing what it wanted to do. There was no impact on value in the long term.
You said we could be the next Greece. You think we’re gonna have riots in the streets? Should everyone grab a tear gas mask?
I don’t know about riots, but we are absolutely getting a preview of what it might be like here. Do an overlay of our G.D.P. and our rising debt-you don’t have to be a genius to come to the conclusion that where Greece is today, we’ll be in five years if things don’t change. Think about this: When they created the EU, each state gave up the right to print its own money. We have a very similar situation with the states in America. Then compare a place like California to Greece-Greece’s problems are miniscule next to California.
You’re an investment banker. What do you think of the argument some people are making that Goldman Sachs is a different bank today than it was during your time, when it was run by bankers who had a commitment to clients, as opposed to now, when it’s supposedly traders running the show?
I think that argument is ridiculous. And as for the S.E.C. case, let me just say it is a disgrace. They have no case. The essence of the case is that the buyer should’ve been given Paulson’s name. Forget about the fact that he wasn’t big then like he is today. Goldman had a ethical requirement to not give up names on either side of the trade to the other. That case is totally without merit. It’s frivolous and unseemly.
What you think of the proposed financial regulations?
I think they’re far too complicated for someone as simple as me to understand. Listen, when we look at where we were almost two years ago, the financial community was right in the middle of what was going on, and we need to be honest about their role. But we also need to be very careful that don’t kill the United State’s capital formation capabilities.