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A Weak Signal: America’s Broadband Battle and 21st Century Infrastructure

Episode #31  |  April 14th, 2021
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In This Episode:

On this week’s episode, the cable and media industry legend Leo Hindery, founder of the venture capital firm Intermedia Parters, former CEO of AT&T Broadband, and former CEO and founder of the YES Network (the largest regional sports network and home to the New York Yankees) sits down with Trish to explain how broadband access is now an American infrastructure cornerstone. It’s a project in need of government and corporate partnerships if all Americans are to ever obtain high-caliber internet access. Hindery and Trish also discuss the idea of a Global Infrastructure Bank (which Hindery says could save taxpayers a ton), as well as the recent politicization of corporate America, and China’s ever-increasing threat. 


Leo J. Hindery, Jr

Managing Partner of InterMedia Partners VII, LLP
Leo J. Hindery, Jr., 71, is Managing Partner of InterMedia Partners VII, LLP, which makes mid- to large-size media investments.

Episode Extras:

  • There’s the 20th-century definition of infrastructure as roads, bridges, highways, and airports — but in 2021, streaming broadband is now an integral part of the package.
  • The concept of a National Infrastructure Bank would tap thefiduciary community of expansive pension plans and sovereign wealth funds — instead of always relying on theTreasury.
  • Mitch McConnell says corporations have no place in politics, but he’s taken more money from Big Business for reelection than nearly anyone on the Hill.
  • China’s looking to knock us out as the world’s hegemonic powerhouse, meaning it’s more pressing than ever for CEOs to follow an America-first ethos. 


Trish Regan:               Well, we certainly have our share of economic challenges ahead.  Did you see CPI? What have I been saying? Inflation, inflation, inflation – I’m worried about it. I’m going to continue being worried about it. I think that everyone should be thinking very thoughtfully about how they position themselves, how they position their resources. You want a diversified portfolio to hedge against inflation. But simultaneously, you probably still want to be in these markets, right? Because the Fed says they’re not doing anything, they’re not going anywhere until 2024. Meanwhile, Powell is super optimistic on the economy.


                                    What we’re seeing now is really an economy that seems to be at an inflection point and that’s because of widespread vaccination, and strong fiscal support, strong monetary policy support. We feel like we’re at a place where the economy is about to start growing much more quickly, and job creation coming in much more quickly.”


                                    Well, I hope he’s right. I hope the Fed is right. I hope that this is going to be some perfect balancing act where we can grow and grow and grow and we can print and print and print and we never see any inflation whatsoever. But look, I think you have only to look at the last four months now of CPI data and PPI data, and what you see is the creep of inflation. I don’t believe that this is just going to mysteriously go away on its own.


I am so happy to have with me here today none other than Leo Hindery. Leo is the founder and managing partner at InterMedia Partners. They make mid- to large-size media investments, so he knows a thing or two about broadband and about infrastructure. He also knows a thing or two about building all this out. He actually has been a big proponent for an infrastructure bank as opposed to using the U.S. Treasury. So I’m so excited to have this incredible man who’s had such an illustrious career in business. I should point out, Leo, you started the YES Network, which was the sports network home to the New York Yankees. You won five – this is something people may not know about you – you won five Executive Producer Emmy Awards for Outstanding Program while there at YES.


Leo J. Hindery Jr.:     I consider that my wild and crazy side, Trish.


Trish Regan:               You’re of course president and chief executive officer at AT&T Broadband. So you are the person I wanted to talk to when we think about what’s going to happen on the infrastructure front in terms of communications. I figure you are the authority on this, and I’d just like to get your impressions. They’re talking about $2.3 trillion. It looks like it’s going to get scaled down from that, but quite a bit of this money would go for a broadband roll out, something that people say we desperately need. What’s your thought on all this?


Leo J. Hindery Jr.:     I think we’re at a difficult point in the process, Trish, and that we’re not sure what infrastructure means. It’s certainly not the same to everybody. And we talk traditionally of roads, and airports, and bridges, and highways. And broadband has traditionally been one of the components of infrastructure. But the number has really crept up. The actual number according to the civil engineers is about $1.5 trillion that we’re short in spending. And yet now we’re talking about numbers in excess of $2 trillion and we’re expecting Treasury to manage that entire amount. On top of this COVID relief bill, that’s going to be hard on this economy if we spend an excess of a $1.5 trillion on infrastructure and if we do it through the Treasury.


I have been a proponent as others have been of a national infrastructure bank, Trish, which would use the large pension community as a component of the solution. And I worry a little bit that we’re throwing things into the mix that don’t exactly belong there and we’re going to put a real strain on the economy if we do a full $1.5 trillion – $2.2 trillion on top of the $1.9 trillion of the COVID relief bill.


Trish Regan:               You mentioned that we’re throwing a lot of stuff in there. Look, I look at it and I say that’s kind of noble, right? $400 million to retrofit government housing and to try to really make sure we have more affordable housing for people. There’s hundreds of millions of dollars that they want to spend on changing the care of our elderly, which is obviously a big pressing need in society.


So I’m not saying that any of these things are not worthwhile, but they’re not what you would typically say infrastructure, right, Leo? How do we decide here what’s really, really necessary? Because I actually do think infrastructure is necessary. I’ve done a lot of stories on our electrical grid and I’m very concerned that that’s quite vulnerable. And I believe we need to do a heck of a lot to improve our bridges and roads and anything else that can really upgrade us. But nonetheless, it’s not like money grows on trees. There’s got to be some trade-offs here. So how do you make those decisions?


Leo J. Hindery Jr.:     You’ve been better than most, Trish, in defining infrastructure traditionally as opposed to expansively. And what we can’t lose sight of is that we have approved and are spending today literally $1.9 trillion for COVID relief. If you put $1.5 trillion or $2.3 trillion on top of the $1.9 trillion that we’ve already passed for COVID relief, and as myself and others will tell you, I think that puts an undue strain on the economy. What I don’t want to find out is that the entire infrastructure ticket, so to speak, was paid for through the U.S. Treasury on top of COVID relief. I have been a proponent for years of using the fiduciary community – the large-scale fiduciary community, the sovereign wealth funds, and others to be the source of that spending. I think it would be a relief to the U.S. economy to do so and frankly, more appropriate. But home care is an emotionally important part of our future, yet it’s not infrastructure. And I worry that in trying to expand the definition so fulsomely, that we may end up with less than we need otherwise.


Trish Regan:               Sure, well that’s one of the complaints I had and now we’re seeing that President Biden is kind of walking it back and he’s trying to negotiate. And I’m like, the problem was that the ask felt so out there for a lot of conservatives in Congress that it was almost like DOA. In some ways, you might’ve been better putting the money to the programs – and by the way, I’m not saying not come forward with other programs like how do we take care of our elderly. But maybe do that in the second tranche, which is supposed to be geared to more social-style programs.


Tell me about this global infrastructure bank though because I’m really interested in this and you and I have talked about it in the past. I know that this has been a passion of yours. How would that work so that our listener understands? How would something like that work and why in your view is it more appropriate?


Leo J. Hindery Jr.:     We would set up a federal institution called the National Infrastructure Bank. A very little amount of money would come from the U.S. Treasury to form the bank and all of its primary funding would come from the fiduciary community, from the large-scale fiduciary pension plans and the sovereign wealth funds. And it would have a cost of capital in the 2% to 3%range as opposed to 10%, 11%, 12% when you go to Wall Street and try to get your capital there.


Again, my concern is not – it’s twofold. I don’t want to define things as infrastructure that to your point a moment ago, are not traditional infrastructure and I don’t want to pay for it through the Treasury Department on top of the $1.9 trillion that we’ve already passed for COVID relief. There are people that – every major state has a pension plan that could be a participant in the national infrastructure bank and that would be a good use of their resources, and frankly, a better use of Treasury resources on the other side.


Trish Regan:               What do you think the political reception to something like that would be, Leo?


Leo J. Hindery Jr.:     It’s been quite good. I’ve spent the last year and half, pre-COVID, talking to Congress about it. I’ve written about it in many contexts, and I think the answer would be good. But it needs to start from the top, and I worry that the Biden administration, for all of its interest in the area, is throwing things into the mix that don’t belong there and has yet to confront the opportunity that a national infrastructure bank would present versus Treasury funding.


Trish Regan:               I’ve got to say, I’ve been somewhat dismayed at how much they are throwing out there right now. I guess you could say kudos to them because they’re certainly trying. They’re putting a lot on the table, but at the same time, it’s kind of like OK, whoa, we want to take a deep breath. We want to make sure this is being done right now in ways that will not have hangover effects. Larry Summers, very smart guy. You know, Larry, former Treasury Secretary of course under Bill Clinton and former Head of the National Economic Council under President Obama has been rather aggressive in his criticism of Federal Reserve policy and even what we’re seeing from the fiscal side. It’s this combination of fiscal and monetary stimulus that he worries could actually lead to inflation pressures.


And we saw today, consumer price index registered another gain on the heels of the last three months in gains. And so that’s perhaps a real concern. But again, they’re putting everything out there right away. I suppose you want to do it while the winds at your back and you could criticize Donald Trump for not having done infrastructure, something that he wanted to do earlier when he had the House and he had the Senate. But do you worry at all, Leo, that it’s too much, too soon, too fast?


Leo J. Hindery Jr.:     I think it’s all of those three things, Trish. And I don’t agree with Larry Summers on everything, but I completely agree with his opinion expressed today. I think it was in the Wall Street Journal that too much, too fast, too soon, to use your phrase, is too much, too fast, too soon. And we need to spend about $1.5 trillion on traditional infrastructure, not $2.3 trillion. And we can’t forget that we’ve already committed ourselves to $1.9 trillion for COVID relief. We have a universal acceptance of the COVID relief monies being spent and we have a universal sense that we need to spend a great deal of money on infrastructure. But we can’t do a third piece just to solve all of the social ills in sort of a third tranche at the same time. And we will put inflationary pressures on the economy if we keep spending at this level without taking the bird in the hand, which is the fiduciary community and let them fund the infrastructure.


Trish Regan:               Sure, I don’t know how it doesn’t happen. It would be really kind of a miracle if somehow this all worked out perfectly. Believe me, I hope it does. But if you spend this much money and you print this much money and you think that you can manage the inflation, gosh, again, maybe they’ve mastered this in terms of the bond-buying program, etc., in a way that I haven’t anticipated. I’m just sort of a simple girl from a “live-free or die hard” New Hampshire and I’m not quite seeing how this all adds up. So I appreciate Larry’s candor on this. I appreciate your candor on this because I think that people have to raise these warning flags.


Let me talk to you about broadband. It drives me crazy. I’ll give you a good example. I was trying to record this podcast over the summer. We had a complete power outage in my neck of the woods outside of New York in the Connecticut area over the summer. And so I went up to New Hampshire and I spent a little time with my family there, my parents. And I was going nuts because the broadband, it just didn’t have the connection speed that I wanted and needed. Frankly, neither do we have the connection that I’d even appreciate right here, right now. I see that this has got to be improved in order to kind of bring everybody up. Why aren’t private companies doing more? Why wouldn’t the company that runs fiber say, “Hey, this is a good opportunity, we’ve got some people that could use fiber here.” Why aren’t they doing it?


Leo J. Hindery Jr.:     Well, this is going to be one of the trickiest issues in infrastructure that’s addressed. Nobody denies that a young woman or man, particularly school-age children, need in their homes a high-quality broadband if they’re to stay ahead and stay up with the rest of society. And the experiences you talk about this summer when you were in New Hampshire, that’s just wrong that the women and men of New Hampshire don’t have the quality of broadband that you and your family have in Connecticut. But should that be solved by the federal government? And the answer is I don’t think so. I think there should be incentives built in by the FCC, and by the Treasury and otherwise, and by the administration into wiring up those areas of the country that still have little or no broadband. American Indian reservations are an example. You can’t solve the tragedy and the poverty of the American Indian reservations without broadband, and yet somebody needs to give them that broadband. What you don’t want to do is have the government doing the poor areas and the for-profit companies doing the rich areas, and that’s where you’re headed now. And so I’m a believer that the federal government should put incentives in place to develop broadband in the poorer areas of the country, the rural areas, but it shouldn’t completely divorce itself from the at-profit part of the equation.


Trish Regan:               I’m not – and frankly, forgive me – I’m not familiar enough with what they’re trying to do. It seems like the logical thing to have sort of a private-public partnership on the broadband front. Do you anticipate that that’s going to happen, or do you think that the government is going to go for gold here and just try to do it all?


Leo J. Hindery Jr.:     Broadband works really well in dense areas of the population. You take New York as a city, it’s a very easy proposition, very profitable for the broadband purveyors. It’s when you go to upstate New York where the homes are distant from one another, rural areas, they’ve ignored it and it’s been wrong. It’s something the FCC should have corrected years ago, which is to have licenses for broadband in rich areas should not preclude you from having an obligation to wire up the poor areas. And there has to be government incentives or government mandates even to induce these companies to treat all society in their service area the same as they treat the rich areas.


Trish Regan:               Yeah, that makes all the sense in the world.


Leo J. Hindery Jr.:     But you take your example of your home in New Hampshire, your folks’ home, nobody is voluntarily going to go to that home and give them broadband without some incentive to do so. It’s too expensive, yet in Manhattan, in Connecticut, it’s very lucrative for the broadband companies to be engaged in purveying that service.


Trish Regan:               Yeah, that’s interesting. And even – it’s not perfect, trust me, where I am in Connecticut either. I still don’t have fiber, which I lament every single day. But this is the thing… it’s like how do you make this work in a way that capitalism remains the prevailing way of living, but simultaneously, ensuring that everybody gets this?


Let me turn to – you sound pretty clear on your hesitancy for all this spending. I want to turn back to that for a second because at some point, Leo, aren’t taxes going to have to go up considerably because of this gap? We’ve just learned that federal deficit in the first three months of the year hit a record. And by the way, I actually, initially when COVID happen, was a proponent of the spending and a proponent of stimulus checks, not so with Trump’s second round because by then, it seemed as though the economy was getting back on its feet and I started to get a little bit nervous about all this spending. I think that government needs to be there for people that are struggling and dealing with this at a time when they don’t anticipate it at all, this thing sort of came out of the blue. And it’s been very hard on people, but simultaneously, you need to get the country back on its feet. How do you think about all this spending in light of taxes and in light of our future and our kids’ future?


Leo J. Hindery Jr.:     We’ve talked about it from a different direction, but Larry Summers and I and others would say if you have an alternative to just more federal spending, take the alternative and that alternative is the national infrastructure bank. We’re putting tremendous pressure on the economy with the COVID relief bill of $1.9 trillion. If we add to that $2.3 trillion for defined infrastructure spending, that will be too much – to steal your phrase again, Trish – that will be too much, too soon, too fast. And so the answer is you’re going to have to raise taxes, but you’re going to have to raise taxes on corporations modestly, I don’t think inappropriately. You’re going to have to raise taxes on the extremely wealthy, not inappropriately. But you still have to do – you can’t bring onto the economy the total of $4.2 trillion. You just can’t do that and not expect adverse outcomes.


Trish Regan:               Yeah, I hear you. It’s important that that message get out. I fear that the Republicans have become so toxic because of everything that’s happened that in part, it’s too easy to ignore that fiscal discipline message and it’s too easy to shut it out, but it’s an important one for people to hear. Let’s talk a little bit about just over the last year. We’ve just passed the sort of one-year anniversary when all of this effectively blew up. We’ve lost so many lives. It’s been so tragic. I’ve lost some people close to me. I’m sure you know people that have suffered as well, Leo, from this. It’s a miracle that we’re still standing. It’s a testament really to the strength, I think, of the American people and the American economy that we’re emerging from this as intact as we are, but it’s been a rough year and we have lost a lot of people.


But we’ve got a whole group of kids now that are graduating from school and they’re looking for jobs that – in journalist organizations or with me or firms like yours, and it’s a very different experience. I now have my office all set up at home. You were telling me you moved out of the city and you’re working on Zoom calls, etc. What’s it like for young people now, do you think, getting into the workplace and how does it affect their future?


Leo J. Hindery Jr.:     Oh, I worry greatly about the young people, the ones who are just coming out of college, the ones who are trying to get into college. A college experience on Zoom is simply not the same as an in-person experience. A lot of the social maturity that these young women and men are being asked to aspire to will not happen over Zoom. And so we need to get everybody back to school as quickly as we can. And just as a quick digression, I would add to your list of people who deserve great accolade, I would add Big Pharma. The pharmaceutical industry in this country has done a remarkable job of immunizing us against the COVID-19, the coronavirus.


Trish Regan:               Amazing, amazing. It’s such a tribute to America.


Leo J. Hindery Jr.:     Yeah, that’s right.


Trish Regan:               Really, it shows you how capitalism really does work. I mean the Chinese now are worried about their vaccine saying that they have to mix it with some others perhaps to really create something that’s more potent and vital and protects. And here we are, there’s been a little bump in Johnson & Johnson’s rollout as well as AstraZeneca, but we’ve got a couple vaccines there, Leo. I just got mine yesterday, Pfizer one. And what a great thing that they were able to do that.


Leo J. Hindery Jr.:     It is a great thing, and yet we need to worry about the lost year. What we can’t accept easily is too much social separation. The economy breaks itself down into the women and men are mostly in the manufacturing category, the women and men who are in the service category, and then what we call corporate America. And if you take the intimacy of work away from all three of those because of the tragedy of this last year, we’ll pay a price for that down the road.


So I hope as much attention is possible is paid to recapturing that year and bringing people back together in a work environment. The Ford Motor Company has authorized thousands of its employees to work from home. That’s not helpful. That’s not a perfect outcome. Working next to a woman or man in your work setting is a gift. It advances your own experiences, your knowledge, your capabilities. And to do that from home, it’s good, but it’s not great.


Trish Regan:               Sure, I imagine a lot of companies are salivating at the cost savings from the real estate perspective. Maybe they don’t need as many offices, they don’t need the same kind of infrastructure for the employees. But I agree with you, there’s an intimacy that is lost and sort of the exchange of idea that you have in a group environment, that’s also lost. And I think people – it maybe lost for a while. I see it with kid’s school. How awful is that that you’re on a Zoom call all day trying to learn? I just don’t think you can possibly learn in the same way as you do in person. And so one would have to think for companies and people just sit around and brainstorm ideas, it’s not the same kind of fluidity as you would have as if you’re in person.


Leo J. Hindery Jr.:     No, interaction is a gift and when you take that gift away, you have to figure a way to get it back. And we can’t solve the social needs of this country on Zoom, we just can’t.


Trish Regan:               No, for sure. That’s one where I really would like to see the government put more pressure when it comes to the kids in the schools anyway, more pressure to get the kids back. And I understand it was scary, but we’re coming out of this intact. And so it would be nice to make sure that the people are back in a classroom learning situation so that they can grow. Venezuela by the way used to offer – still does of course given COVID – used to offer for school kids on TV. Of course, that’s if you’re lucky enough to have the TV, which is sort of reminiscent of what we’ve been dealing with here. You get school classes on Zoom if you’re lucky enough to have a computer, if you’re lucky enough to have a good broadband connection. So it is going to be a lost year for a lot of kids for sure, but American business seems to be coming back.


Let me ask you about and you can be thoughtful about how you answer this, but I’m watching right now the increased political environment that we’re living in. You probably saw over the weekend 100 CEOs got together on a Zoom call to talk about how to deal with states and voting right, etc. How do we navigate this right now? Because there’s I think again in part because of all that has happened and some of the things that were said over the years, there’s a lot of animosity toward conservatives wherever you fall on that scale. And so the culture seems to be swinging almost the other way. The pendulum is going the other way and corporations are sometimes stuck in the middle. What’s your advice to other CEOs that are trying to navigate this?


Leo J. Hindery Jr.:     I’ve had the privilege of being the CEO in large companies and I always thought that my responsibility was twofold. It really was to my employees first and foremost, and to my shareholders and my community second. I listened to Mitch McConnell the other day say that corporations have no business in politics. Mitch McConnell has taken more money from business for his election than any man in recent history. And so I think it’s a narrow beam that you walk on. Campaign finance reform would be a real start in this country to take away from American politics the role of corporations.


But until you do it from both sides, you’re not affecting the outcomes that we feel we need. And I applaud all of the women and men who signed that pledge to look at campaign finance and campaign election reform in some of the changes that are being proposed, and I think it’s their responsibility. They’re on behalf of their employees, and their employees, if they’re ever prevented from voting or making it more difficult to vote, I think they have the obligation to speak out.


Trish Regan:               Yeah, it’s a good point and wouldn’t it be great to get the money out of politics. Let me ask you this from the flipside – I realize Mitch McConnell saying oh, they need to stay out of this, to your point, he has accepted a lot of money from a lot of corporations over the years. Is it at all a freedom of speech thing? Like if I’m a corporation and I want my particular agenda advanced, then shouldn’t I have the right to go and spend the money, or do you think that that’s one where we need to just jot a line in the sand and say let’s keep church and state separate, business and politics need to be separate?


Leo J. Hindery Jr.:     I think it’s going to be hard for us to evolve to an environment where we don’t have corporate money in politics. I think that’s naïve where we’ve gotten ourselves. What I would like to see it at a minimum is more disclosure. I don’t want to find out that corporations are spending money with women and men who are candidates for office who have social agendas that are antithetical to the best interests of this country. Transgender youth, it’s a political issue and it should be a health and social issue. That’s just wrong. So women and men who spout sort of behaviors that sort of conflict with the best interests of our society shouldn’t have that opportunity – or at least, I should know what they’re up to.


Trish Regan:               Yeah, you should be able to know. The clarity matters. Let me turn to the markets for a moment because they have just been on fire. When this all sort of started going down last March, I remember saying look, this is overblown in terms of the markets. We’re losing 1,000 to 2,000 points a day. I have faith in America, I have faith in our pharmaceutical industry that we will see this through. There will be a light at the end of the tunnel, unless it becomes a systemic issue a la 2008 where they’re trying to sell certain assets like hot potatoes, I think we’re probably going to be able to get through this. And sure enough, we have gotten through this. And we’ve gotten through it on the market’s side of things and then some, Leo. We’re trading at valuations now that we just haven’t ever seen before. And so I guess my question to you is do you think it lasts? Does it last for a while? Is this an asset bubble in the making? How should we think about this? Because what I’ve sort of been a believer in is you want to capture the upside while it’s still there. The Fed tells us they’re not going anywhere till 2024. So I guess it’s game on until then. Your thoughts?


Leo J. Hindery Jr.:     If you thought that the unemployment rate in real terms was 12%, not the 6% that the Bureau of Labor Statistics said last month, I think the answer would be found in simply that observation. I think we are a long way from recovering from the COVID crisis, and yet we’re behaving as if we’ve passed it and we’re moving forward. There are still 10 million women and men who are not counted every month for being COVID-related unemployed. They’re underemployed, they’re not counted for reasons of being marginalized workers. And I worry about the economy getting ahead of itself and leaving these 10 million women and men who don’t get counted every month, leaving them behind.


Trish Regan:               Yeah, I think that that’s a fair thought. I guess if you think about those people that haven’t quite caught up, it would suggest though that there’s more room for expansion. Or you think that the markets just sort of getting ahead of itself assuming we’re right back where we started, and we still have a lot of people that need to come back in?


Leo J. Hindery Jr.:     Oh, I think it’s the latter, Trish. I think that the enthusiasm and March unemployment rate was ill-placed. There’s still 10 million more women and men not being counted, and the real unemployment rate is closer to 12% that it is to the BOS’s rate of 6%. And if you think you have a 12% problem, you’ll react one way. If you think you have a 6% problem, you’ll react quite differently.


Trish Regan:               Since I have you here and you’re humoring me and this is a conversation with Leo Hindery, you’ve had a position at the CFR for some time. Any thoughts on where we are internationally? I want to get to China, but also Iran. But Iran has been making noise as of late and they are said to be enriching their uranium now at a capacity that’s far higher than what was originally agreed to and anticipated. What’s going to happen to the Iran deal? Do you think it’s back on the table? Do you think we’re able to foresee some kind of peace in that region or is this just an ongoing conflict?


Leo J. Hindery Jr.:     I think Iran will come back into the nuclear agreement. I think they should never have been tossed out of it. Was the nuclear agreement perfect? Far from it. Was it better than nothing? By far, it was better than nothing. And here we are trying to persuade all the parties, 10 nations to recapture the agenda of the nuclear agreement. And Israel went after their plant over the weekend. And we can’t have part of the global construct trying to break up the nuclear agreement and the rest of us trying to put it back together.


I worry greatly about China. China has declared itself on par with the United States. We’re no longer thought to be primary and they being secondary. We have to have a new China policy than the one that was left behind by the Trump administration. I think President Biden will do that well, but it’ll take time. And you have to worry about the Ukraine and Russia. I think they’re going to come in. We’ll be confronted with a tremendous decision to make at that point. And I think the Chinese will continue to try to take over Taiwan and we have to be ready for that outcome. So these are going to be tough times going forward.


Trish Regan:               Yeah, that has me a little alarmed, yeah, the Taiwan situation. Look, China, it’s a headache. And by the way, I know it’s become partisan, but this is not something that should be partisan and not something that’s sort of mutually exclusive. Both parties have had to deal with this. This has been a long time in the making. When you look at the success of China relative to the success of our economy, granted they were starting kind of from zero whereas we had already amassed quite a significant presence. But in the last 20 or so years, they’ve really grown. That may be leveling off right now, but nonetheless, when you have an economy that grows that much, they need to protect it. I understand that, and thus grows the military as well.


So I kind of like being still – sorry – the hegemonic player in the universe. I like having that responsibility and it is a responsibility as the United States of America. But I think it’s also important because we need to protect our currency, we need to protect our values, our country, etc. But it looks like there is another kid on the block. China is here and they have expressed a desire to have some sharp elbows. So how does Biden negotiate that one?


Leo J. Hindery Jr.:     Once COVID is behind us, the great challenges ahead are Russia and China. Russia’s aspirations for the Ukraine continue and China’s aspirations to reunite with Taiwan have never been abandoned. And both of these countries have capabilities that would make some sort of land and sea war a very dangerous time in the world. One of the reasons I enjoy listening to you so much, Trish, is that you do such a nice job of bringing into the business side of our economy the global responsibilities, the global challenges.


Trish Regan:               Sure. Look, if you want to protect our currency, if you want to protect our debt levels, all of these things are intertwined with the military as well. And it’s sort of a strange thing, but one of the things you can borrow at such low rates is because we enjoy this status as a hegemonic player. Now there are people out there – Ron Paul is one – who would say we don’t need to be the superstar in the world. We don’t need to be the biggest player, but I’m unique in that I guess I really feel that if we’re going to be the biggest business player, you also have to be able to protect that wealth and protect your economy and protect businesses. But it’s tricky and it’s tricky because I understand businesses, they want to make money, Leo. I get it. And if you can make money in China because you have cheaper labor, then why not?


Unfortunately, China, its government is going to maybe hold you to a few things and so you sacrifice a little too much. But often times, I think people are more interested in sort of quarterly annual results as opposed to what’s going to happen 10 years from now. So is there way to dissuade American companies to be over seas like that? Do you do that via lower tax rates? Do you have a better environment here than you maybe get in China? Because again, you want access to that market as a CEO but you don’t want to give up a lot and the Chinese are kind of making you give up a lot.


Leo J. Hindery Jr.:     You know, with respect to Ron Paul, I think he’s completely off base. I don’t want to wake up some morning and find ourselves threatened by a Taiwan invasion, a Ukraine invasion, by China and Russia suggesting that we are second-rate to them at this point in our evolution. There has to be a reproach law among the three of us because right now, it’s the two versus one and Russia and China’s aspirations are contrary to the best interests of the United States.


Trish Regan:               For sure, but how do you manage it because one of the security concerns is that you have a lot of U.S. companies that are giving data up that maybe they shouldn’t give up, but there’s certain rules if you want to be doing business over there, you’re going to have to give them up. So there’s a feeling that we have some vulnerabilities, some exposure to China, and that the more our companies are doing business over there, the more exposed we will be. But look, we live in a global economy. If you were president today, how would you thread this needle? You want American businesses to be able to be successful – maybe you do – on an international scale, but simultaneously you need to protect what we have as well.


Leo J. Hindery Jr.:     I think the answer you often stated on your show is that you have an obligation as an American corporation first and foremost to America. And right now, we have tax policies and incentives that belie that. You’re incented to move to China with your operations. You’re incented to allow a gas pipeline to Russia that’ll only enrich that country further as you confront their aspirations in the Baltics and in Ukraine especially. We haven’t done a very good job of being selfish, and I don’t mean selfish in a way that is inappropriate. But America first is an important aspect where we need to be. China is China first and Russia is Russia first. We need to match in terms of our aspirations and our positioning where they have gotten themselves and hope to be.


Trish Regan:               I’m glad you said it. It’s almost like America first – it’s like a dirty word. You’re not supposed to say it, but I’ve kind of always thought from the beginning, well, isn’t that sort of obvious. Shouldn’t we – don’t we want to put ourselves and our country and American businesses first? Which gets me to this global tax thing. You probably heard Janet Yellen the other day talking about the need for taxes for every society. I don’t disagree with that, but I’m sort of amazed because I don’t know as the U.S. could just go around and just say hey you, you’re going to pay 15% because we decided. And maybe she’s got some mighty influence in that small stature that I just am not aware of. But how does the U.S. navigate something like that? Can we really go around and tell every other – maybe you could tell the developed world. But what happens to the countries that are coming up through the ranks and they’re like, “Hey, wait a second, we need to offer a 12% tax rate, otherwise we’ve got no business?”


Leo J. Hindery Jr.:     I think Mrs. Yellen, that’s a pipedream that’ll never be realized. You have 370 countries in the globe, you’re not going to be able to dictate a common tax rate among all of them. It’s just foolishness. What is not foolishness is to let American companies avoid taxation here in the United States by shipping their operations as Google has to Ireland. That’s just tax avoidance on the backs of Americans. So I wish Mrs. Yellen would spend more time on tax avoidance in the U.S. than trying to concoct a common rate among the world.


Trish Regan:               Yeah, I hear you. I’ve called them shotgun marriages… the tax inversion deals where suddenly American companies will buy another company overseas to get the benefit of the tax rate. They tried to get rid of that during the Obama administration because it became such a big deal. But you’re right, it would be nice to focus on let’s make sure that American companies pay up and then we can worry about what Ireland’s doing. I’ll tell you, Ireland’s not going to take that too well. They like their 12.5% rate and it’s been a big part of the economic success.


Leo J. Hindery Jr.:     Right, but Google, which generates massive amounts of income in the United States, is getting a free lunch and they’re not entitled to a free lunch. American companies should pay American taxes on their American operations.


Trish Regan:               Jeff Bezos has a lot of backend operations overseas as well, does he not?


Leo J. Hindery Jr.:     He does, and yet he’s standing up for tax reform, which I give him credit for.


Trish Regan:               Yeah, I wonder too… You kind of better stand up for it if you’re him because otherwise, they may be coming for you at some point. I don’t know. I found it interesting only because to your point about Yellen, it would be nice if the companies that are here would pay their fair share – now I sound like Elizabeth Warren – their fair share of taxes. The last thing I want to do is sound like Elizabeth Warren. [Laughs]


Leo J. Hindery Jr.:     Is that how we’re supposed to end this conversation? You comparing yourself to Elizabeth Warren?


Trish Regan:               Yeah, I know. Trish has really gone off the deep end. Yeah, they’ve got to pay their fair share. But anyway, it’s so interesting talking to you, Leo. It’s been a while and I appreciate you coming on the show.


Leo J. Hindery Jr.:     A real privilege for me, Trish. You are the good one and a real privilege. We’ve talked about a lot of things. There’s a lot of challenges ahead, but with your insights and commentary, we’ll knock some of them in the head at least, I hope.


Trish Regan:               Well, I think Leo had some really insightful things to say there. The infrastructure bank would be a much better way to go. I’m pretty darn sure of it rather than having all of us taxpayers on the hook for this. So infrastructure bank, big take away there. China wanting to have a seat at the table, and this is going to be increasingly a big, big thorn in our side as we go forward. But finally, I love that I’ve found someone who also agrees that we are looking at inflation if we’re not careful here. All this money is adding up. It’s too much. We can’t afford it and it would be nice to have some sensible mathematicians in there. I always ask, why can’t anyone in Washington do math?


Anyway, thank you so much for listening. I’m going to see you online at You can go there, you can subscribe –, and you can get all my long-form writing as well as, my daily website with my daily podcast. And you know how much I love hearing from you, so reach out and let’s keep the conversations going right here together. I’ll see you next week.


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