Distinguished Voices Series: A Conversation With Maurice R. Greenberg

Wednesday, March 27, 2019
Don Pollard
Speaker
Maurice R. Greenberg

Chairman and Chief Executive Officer, C.V. Starr & Co., Inc.

Presider
Alan S. Murray

President and Chief Executive Officer, Fortune Media (USA) Corporation

Maurice R. Greenberg reflects back on his career, including his time in the U.S. Army, role as Chief Executive Officer of American International Group, and now as Chairman and Chief Executive Officer of C.V. Starr & Co., Inc.

The Distinguished Voices Series focuses particular attention on the contributions made by a prominent individual at a critical juncture in the history of the country or the world.

MURRAY: And welcome to the Council on Foreign Relations Distinguished Voices Series. Happy to have everyone here. We’re meeting with Hank Greenberg, who you all know. Is the chairman and CEO of C.V. Starr and Company, and the long-time—when I say long-time, what was it, thirty-seven years?

GREENBERG: About that.

MURRAY: Thirty-seven-year chairman and CEO of AIG. I’m Alan Murray. I’m the CEO of Fortune. And happy to be here to have this conversation. And if we could start with China, because I don’t think there’s a businessperson in this country who has spent more time or has a deeper relationship with business in China than you do. And you were instrumental in bringing China into the World Trade Organization in 2001. So I’m very curious to hear what you think about the current trade spat that we’re having with China.

GREENBERG: It’s not China you have to think about. You have to think about Washington, and the demands that they make in these negotiations. I’m worried about—first of all, China would like to do a deal, and so would the United States. We both would benefit from it. But if we insist on putting on—holding the tariffs if they made a deal, on keeping the tariffs on as a weapon in the event China doesn’t live up to the agreement, I think President Xi would have a hard time doing that. So I would hope that they can negotiate that in a way that it doesn’t become an impediment.

MURRAY: Do you think it was a mistake for President Trump to pick a fight with China?

GREENBERG: Yes. It’s the second-largest economy in the world. It’s a hell of a lot safer world if U.S. and China are allies, as much as they can be allies, rather than drive them towards Russia, which would not be in our national interest. And the Chinese people like America and like Americans. And I think it would be a much better deal to have them as an ally rather than as an enemy. China needs the United States right now. And we need the market of China.

MURRAY: But I think if you go back to 2001, when you did play a critical role in bringing China into the World Trade Organization, if you go back to what we thought at that time would evolve over the next two decades, we probably thought that China would become far more integrated into the global economic system and governance system than, in fact, it did.

GREENBERG: Well, you know, there were changes in China, in the leadership. When Zhu Rongji was the—was the—was the premier—I got to know him when he was mayor of Shanghai. We became very good friends. If he had stayed in government for a longer period of time, it would have been a different outcome. But he had one term only.

MURRAY: It would have been a different outcome economically?

GREENBERG: Yeah. Yeah. But, look, it’s 1,400 million people. We have 300 million. Second-largest economy in the world. It will soon be number one. So not to have a constructive relationship is not in our national interest.

MURRAY: Have you told that to the president?

GREENBERG: We haven’t spoken for a long time. (Laughter.)

MURRAY: How about Xi Jinping? What’s your relationship with Xi Jinping?

GREENBERG: Well, I know him. I meet with him on occasion. I usually see Wang Qishan, who is the vice president. We’re very good friends. I’ve known him a long time. Look, I’m not optimistic that China would like to have a constructive relationship with us. It has to be a two-way street. It can’t be just one way. And so I hope that we do it the right way.

MURRAY: Can you talk a little more broadly about—as someone with a long experience in the global economy—a little more broadly about what you see happening in terms of world trade and globalization, and the retreat from those things that you were so much a part of?

GREENBERG: Look, I’m very worried about the future. Europe, we don’t have the same relationships with now. The president has made many changes that are not in the interests of many countries. So I’m concerned about that. I’m concerned that we don’t drive China and Russia together. That would be a very unsafe world if that happened, in my judgement. We can’t just make changes that have been in existence for 25 or 50 years and do it all at once and think everybody will be happy. They’re not. There’s a lot of uncertainty in the world. And you have to be able to manage that so that it doesn’t explode. The next time there’s a war—and God forbid there be one—it’s going to be a nuclear war. Not with rifles. It could be the end of civilization as we know it. But we can manage our way out of that happening.

MURRAY: Certainly some of the things in the China relationship that the president has focused on are legitimate problems—intellectual property, for instance.

GREENBERG: Say that again?

MURRAY: Some of the things that the president has focused on as problems in the China relationship, like intellectual property, are serious problems.

GREENBERG: Yes, they are. We should not have to turn over all our technology—any company going to China shouldn’t have to do that. And there’s got to be a more evenhanded—we all know that you can’t have the Chinese be treated one way here, Chinese companies, and American companies treated differently in China. I think they realize that. And even if they make some changes, is it going to be enough? I don’t know. It took me a long time to get a license in China. It took me twenty years to get the only life license in China.

MURRAY: Twenty years?

GREENBERG: Twenty years.

MURRAY: What did you do for those twenty years? (Laughter.)

GREENBERG: I was visiting our offices in Asia. We operated all through the—

MURRAY: But you got the first license.

GREENBERG: It’s still the only foreign life company in China. Now the Chinese had promised to open the market. They’ve made many promises. And so we have to be sure it’s going to happen. And I think it will happen.

MURRAY: You think there will be more economic reform? Because a lot of people look at where Xi Jinping is headed right now and question whether that’s the direction we’re headed in.

GREENBERG: You know, they made promises before. And some of them were carried out, but never entirely. And hence there’s a lot of skepticism. No matter what they agree to, is it going to be carried out? It’s a very difficult country to get things done at the—at the government level. It takes a long time to build relationships. And so there are two kinds of relationships—either you have a close one or you don’t. We built a great relationship. And we have a pretty good business in China. And so there are many other companies the same way. It’s better than it was. It has a long ways to go. Change doesn’t come easily in China. And so you have to be prepared for that.

 MURRAY: Do you think there’s going to have to be a change in leadership before you see further progress on economic liberalization?

GREENBERG: No. I think there’ll be some liberalization. They’re already on the way to doing that. But are we going to agree that what they negotiate is fine, or is the president at the least minute going to come in and say: I have my own view now, I want this done? And that’ll put things off. And so I’m worried about how we handle it as well. We’re not going to get everything we want at one time. But as China gets better economically, they’ll open more.

MURRAY: We’ve been focusing on economics, but the—under Xi Jinping the Chinese government has become more and more authoritarian. Does that bother you? And do you think that will change?

GREENBERG: It doesn’t bother me. We have pretty good relationships. And we have access to see the people. And we candidly tell them they’re doing something that we think is harmful to us, or the economy overall. We talk about it.

MURRAY: So it doesn’t bother you?

GREENBERG: No.

MURRAY: Did you think in 2001, when they joined the World Trade Organization, that this is where we’d end up?

GREENBERG: No.

MURRAY: No? (Laughter.)

GREENBERG: They didn’t either. (Laughter.)

MURRAY: And do you think it will last?

GREENBERG: I think it’ll change. And, of course, if the World Trade Organization exists. There’s some question whether or not it should exist.

MURRAY: The World Trade Organization?

GREENBERG: Yeah. Yeah.

MURRAY: Why wouldn’t it—why shouldn’t it exist?

GREENBERG: I’m not saying it shouldn’t. I’m saying I hear talk about that it shouldn’t.

MURRAY: Well, some people think the Belt and Road Initiative in some ways is becoming—they see it as becoming a replacement.

GREENBERG: Yeah, but that is another story. We insure a lot of the construction in that program around the world. And a lot of countries are finding out that they’re becoming indebted to China from doing that.

MURRAY: So it’s not that popular?

GREENBERG: No, it’s not. I wouldn’t say universally, but there’s a lot of unhappiness.

MURRAY: So let’s do a little history, because I think that’s the intention—part of the intention of the Distinguished Voices Series here at the Council. You had an amazing thirty-seven-year career as chairman and CEO of AIG. You built it from a tiny company to, what, a hundred and—

GREENBERG: Hundred and eighty billion (dollars).

MURRAY: Hundred and eighty billion (dollars). That’s not bad. That’s quite an accomplishment. But then in 2005, you were forced out.

GREENBERG: That’s right.

MURRAY: Forced out because of accounting scandals.

GREENBERG: I was forced out by Eliot Spitzer.

MURRAY: (Laughs.) But he didn’t have any cause to force you out?

GREENBERG: No, he made up whatever he wanted.

MURRAY: I mean, the company in the end paid a billion and a half dollars in fines.

GREENBERG: Yeah, but that’s only part of what the total settlement was. It was—very little money changed hands. The accounting was—we never had an accounting problem in the company. The auditor signed off every year. We had 900,000 people working in the company. We operated in 137 countries. We were the largest insurance company in history. We were a national asset. We had boots on the ground in 137 countries. It was a valuable asset. Too bad it’s been destroyed.

MURRAY: Why do you think Spitzer did it?

GREENBERG: Spitzer did it because of a comment I made. I never met the man.

MURRAY: You never met him?

GREENBERG: No. I have since then, but there’s about—what I’m about to say. I was being interviewed and I was asked what the regulatory environment was like today. And I said, a foot fault is like a murder charge. I wasn’t referring to him. I was referring to the federal government, actually. He took that as an insult to him, to himself. One of his people came in, told him what I had said. Sitting in his office at the time was Vacco, the prior attorney general, who was representing a client. And he said, in front of Vacco, I’m going to take that F-Greenberg down, OK? That’s how it all started. Vacco sent me a note—he was a Republican—he sent me a note of what Spitzer had said and offered to testify about that if it became necessary. That’s how it started.

MURRAY: And but at the end of the day, it was your board that asked you to go, not Spitzer.

GREENBERG: Well, hold on, I told the board before all that happened I was going to step down as the CEO at the annual meeting. It was only about three months—

MURRAY: In 2005?

GREENBERG: Yeah. It was only about three months.

MURRAY: But you were a young man.

GREENBERG: Still feel young. (Laughter.) The—I had been in the job for over thirty years. I was going to stay as non-executive chairman, stay on the board. And that plan had—the board knew about that. Spitzer told the board, called the board after this little exchange, and said I had to step down now. The board had a meeting by itself, the outside directors, and gave into Spitzer.

MURRAY: He said he would—he was going to go after the company if you didn’t step down at that time?

GREENBERG: Something like that, yeah.

MURRAY: Yeah.

GREENBERG: So I was willing to step down. It made no difference to me. And I did. I stayed on as non-executive chairman and as a director for a while. It wasn’t working. So I stepped down completely.

MURRAY: But you think it was unfair?

GREENBERG: I think the way it was done was unfair, absolutely.

MURRAY: So not long after that AIG obviously played a significant role in U.S. history. It became the largest government bailout we have ever seen, because of heavy investments in credit default swaps.

GREENBERG: But let’s put this in focus. Goldman Sachs and Morgan Stanley were up to their ears in that kind of debt transactions. AIG was insuring—when I left the company we had a specialty organization that we had acquired called AIG Financial Products. We need to meet with them at least three times a week. They couldn’t do a transaction without our approval. We kept them on a tight rein. And that worked very well. When I left, that all went to hell.

MURRAY: No oversight?

GREENBERG: No oversight. And so they got the same kind of stuff that Goldman Sachs and Morgan Stanley was doing. And things got worse in the economy. And so the stuff that they were taking, they were trying to reverse Goldman Sachs and Morgan Stanley by offsetting it by—by offsetting transactions. AIG didn’t have anybody who understood that. And so they had a lot of—they’re being called on for collateral. And so they had to borrow money from the government. AIG paid between 12 and 16 percent interest to the government. Morgan Stanley and Goldman Sachs applied for and got a license—a government license as a bank and could borrow from that bank—from the Treasury at 2 or 3 percent interest, OK? AIG was not given that opportunity.

MURRAY: Well, is that because AIG hit the wall first? Or hit the wall in a bigger way? Why did AIG get treated so much worse than Goldman and—

GREENBERG: You tell me. (Laughter.)

MURRAY: Oh, no. You’ve spent a lot of time on this over the last decade, I have a feeling. So I’m curious what you found.

GREENBERG: I wasn’t in the company. I wasn’t in the company. So—

MURRAY: But you owned a lot of shares in the company.

GREENBERG: I did until the government also took 75 percent of the equity of the company.

MURRAY: Yeah.

GREENBERG: OK, you hear that? Seventy-five percent of the equity was taken from the shareholders.

MURRAY: That was part of the bailout.

GREENBERG: Yeah, it was part of the bailout.

MURRAY: I mean, do you think that was unjustified?

GREENBERG: Absolutely.

MURRAY: Really? I mean, the—

GREENBERG: Absolutely.

MURRAY: If they hadn’t—if there hadn’t been a bailout, what would have happened to AIG? You would have lost all your shares?

GREENBERG: No, there could have been a bailout, but not—why those terms? Well, why so punitive for AIG and so lenient on Goldman Sachs and Morgan Stanley?

MURRAY: So the bailout of AIG was engineered by the Federal Reserve Bank of New York. Tim Geithner was the head of the Federal Reserve Bank of New York.

GREENBERG: Yeah, I’m aware of that. (Laughter.)

MURRAY: Why would he have put more onerous terms on AIG than on Goldman Sachs and Morgan Stanley?

GREENBERG: The three—he and Hank Paulson made that decision. I assume they talked to the president about what they wanted to do. I don’t think the president understood the details of any of that. But it happened. And Hank Paulson has said publicly, under oath, when he was testifying: If Hank Greenberg had stayed at AIG, this would never have happened. And so, you know, after thirty-seven years all we—we had nine hundred thousand employees. Many of them were shareholders. They were all wiped out.

MURRAY: But that’s the result of the bad investments made in the years after you left, isn’t it?

GREENBERG: Part of it was that. But they—AIG was treated much differently. And I think that was wrong. Why was Goldman Sachs and Morgan Stanley given the right to get a bank license from the Fed and then able to borrow at 2 or 3 percent?

MURRAY: And what’s the answer to your question? Why were they?

GREENBERG: Well, one question you have to ask yourself, the head of Treasury, secretary of Treasury, was who?

MURRAY: Hank Paulson.

GREENBERG: And where’d he come from?

MURRAY: I think Goldman Sachs. (Laughs.)

GREENBERG: You got it. (Laughter.)

MURRAY: So you made an effort to fight that in court.

GREENBERG: Yeah.

MURRAY: How did that go?

GREENBERG: You know, we should have—several things about that. The lower court was very sympathetic to opposition, and said so, essentially. We did not get the Supreme Court, which we wanted to do. Had we gotten to the Supreme Court, I think we would have won. But the politics were such—and I don’t know what happened at the Supreme Court, the meeting. We applied but did not get—one of the cases that was not taken by the Supreme Court.

 MURRAY: And you’ve now gotten over it?

GREENBERG: No. (Laughter.)

MURRAY: So—

GREENBERG: I left AIG, I took three people. One of them is sitting here, Howie Smith. And Ed Matthews, who was head of investments, and myself—and our secretaries. And we started the Starr companies, named after our founder. I’ll come back to that in a minute. We now have three thousand employees. We’re operating in many countries in the world. We have a big business in China, as I’ve mentioned. We’re operating all over, though.

MURRAY: You compete with AIG.

GREENBERG: Oh, absolutely.

MURRAY: You know, I mean, a lot of people, after having spent thirty-seven years building a huge company, and then gone—and then having gone through what you went through between 2005 and 2008—might have said: Time to go play golf. Time to, you know, take it easy, do something else. That wasn’t your inclination?

GREENBERG: I play tennis, not golf. (Laughter.)

MURRAY: But I don’t know when you have time to play tennis.

GREENBERG: See, it takes less time to play tennis than it does golf.

MURRAY: (Laughs.) So tell us a little bit about the company you have built in that time.

GREENBERG: Well, it’s an insurance company, and finance. We have both financial operations and an insurance company. Property casualty company. We got our license for property casualty in China pretty quickly. And that’s going very well. We’re operating throughout Asia. We’re in Latin America, the United States of course. Our business is growing. We’re private. I’m not going to take it public. Not in my lifetime. (Laughter.) And, you know, it’s been a success.

We’re named after the founder of our company, Starr. He founded the company in China in 1919. We’re celebrating our hundredth anniversary in China as we sit here and talk. The Chinese are very proud of the fact that we have done that. Starr left China during World War II, of course. Came back after the war was over and started again. Had to leave, because they had their revolution. And he never went back. I first went to China in 1975. We had operations throughout Asia, so I’d stop there all the time, build relationships, and help—when Zhu Rongji was mayor of Shanghai, he asked me to help him get foreign investment into Shanghai. He formed an organization called IBLAC. I chaired it for a couple of years, couple of terms. And we did, we brought a lot of investment into Shanghai. It’s a great city. If you haven’t been there, you ought to see it. And so we built a relationship, and it helped us very much in starting our business again in China.

MURRAY: So it’s an extraordinary story, and an extraordinary career. I wonder if you could share with this group—and a tumultuous career. I wonder if you could share with his group some of the lessons that you’ve learned over those years—other than stay away from Eliot Spitzer? (Laughter.)

GREENBERG: You know, talking about Eliot Spitzer—(laughter)—his history speaks for itself. He got caught doing horrible things. He got elected governor. And if he hadn’t been caught, he’d have been running for president. Thank God he got caught. He was a bad actor. We deserved better than that. He destroyed companies and people. He was not very good.

What lessons have I learned? You know, I worked hard. I never asked anybody to do what I wouldn’t do. I learned that in the military, actually. And I’m proud of the company that we built. We built the largest insurance company in history. I had good people around me. And you know, when I first joined Starr, and the early years when we were starting AIG up, all the senior people had been officers in the military. They understood when an order was given, you carried it out. You didn’t question anything. You carried it out. And so we moved rather rapidly. We understood what we wanted to do and we did it. And I’m proud of the people I had around me. We built a great company.

There’s been six or seven CEOs since I left the company and AIG. The company is no longer the same company. Its net worth is a fraction of what it was when we left. It’s a tragedy. And one man caused it. There’s something wrong with that system, when one man can do that.

MURRAY: I would have thought one of the lessons from you career is never give up, never stop fighting.

GREENBERG: I haven’t. (Laughter.)

MURRAY: You have not.

I want to open it up to questions. Just to remind people before we do so that this meeting is on the record. And also, that you should wait for the microphone before asking your question or making your comment. And I’d like you to please limit yourself to one question.

Yes, sir.

Q: Herbert Levin, Council member. Nice to see you again, Hank.

Putting aside the Chinese, the China-bashing now in the U.S. is sometimes attributed to President Trump’s personal views and reactions. But even putting aside President Trump, where does this hostility to the Chinese across the board come from? When the Chinese have an internal problem, which they have, it’s interpreted as a manifestation of their cruelty, et cetera, et cetera. Where do you think this current China-bashing mood in the U.S. comes from, other than the president’s personal predilections?

GREENBERG: You know, I wrote an op-ed in the Wall Street Journal last August—I think it was August—about U.S.-China. And more than U.S., China. All we did as a country to help China seems to have been lost in history. We shed a lot of blood on China’s behalf during World War II and before. And when China began to open its market, we exported many things to help China with very little tariff on it at all. We did a lot for China. China seemed to have forgotten that. I wrote this op-ed and the Chinese themselves told me—thanked me for writing it, because within China themselves they had forgotten all that we did for them as a country.

And so—

MURRAY: Well, that’s the president’s arguments, right? That we’ve been patsies.

GREENBERG: Well, yes—no, that wasn’t patsies then. They needed help. They were an ally during World War II. They were not an enemy. And so there was a relationship and we were helping in that relationship. It didn’t have to stay that way forever. And they think it should have been forever. If they can get away with it, fine, they would do it. So there’s a—there’s obviously a resetting of the relationship. But it’s got to be done in a way that doesn’t destroy the relationship. I’m worried about that.

MURRAY: Yeah. Yep. This gentleman right here had a question.

Q: Hank, we heard about your legacy in terms of Sino-American relations, you remarkable achievement of AIG and Starr. But tell us more about what prompts you to give back in terms of philanthropy, which you have done? What motivated you—the Greenberg Pavilion, and many, many other—what motivates you to do good, to give back to society?

GREENBERG: Well, two or three things. When Starr was alive, he founded a foundation. It was very—it was very small. When he died, the foundation had $15 million in it. And he was doing some things, helping some students in both countries, U.S. and China. Made small gifts to different hospital institutions. And I was chairing the—I was the chair of the foundation. We built it up to $6 billion from the $15 million over a number of years when I was running AIG. And we were carrying out many of the things that he wanted to support. We broadened it, obviously, over many years. And I still chair the foundation. It’s still a very significant foundation. And we do many things. One of the major contributors to the whole New York Hospital network. And I chaired New York Hospital for about seven years. So we’ve done a lot to help both here and in other countries as well. It’s part of who we are.

MURRAY: A question there in the back.

We’ve done a lot—this man sitting over here and this organization.

Q: Ed Cox here.

I had the privilege in 1979 of being with President Nixon. We met Deng Xiaoping. His view of the world then seemed a lot different from President Xi’s view of the world and China’s position in the world. You know both—you’ve known both men, Deng Xiaoping and Xi Jinping. Could you comment on their different views of China and its place in the world?

GREENBERG: Well, the earlier leader was taken with the United States. He visited here, including this organization, when he visited the United States. He believed the United States, what we had done during the war and how we helped China—not only during the war, but after the war. We had people dying in China, the Flying Tigers, before we got into the war. And many Chinese understand that and knew it. The current leader has a different view. If you look at his actions, he wants to—he wants to dominate and control all of Asia. He occupied—China occupied all those small little islands, if you want to call them islands, in the South China Sea, and made a public promise that he would never militarize them. They’re all militarized.

And so we’re going to have a problem there. We believe that the South China Sea, that traffic should be open to anybody. It cannot be controlled by a single country. Freedom of navigation is what we believe in. And so that’s an issue. And we can’t avoid that issue. Many countries in Southeast Asia are relying on us not to be quiet about that. And so it is an issue. Now, the other part of that issue is China has built one of the largest navies in the world already. We’re way behind in our military rebuilding program. It’s got to get done. It’s our own national interest to do so. So I’m concerned about that.

MURRAY: Is there a mechanism in China for replacing him?

GREENBERG: Not publicly.

MURRAY: Privately? You know the Chinese system better than the rest of us in this room. Tell us what you know about what’s happening within the Chinese government.

GREENBERG: I can’t comment on it.

Q: Thank you. I’m Lucy Komisar. I’m a journalist.

And for probably the last couple of decades, a main focus of mine has been the offshore system, offshore banking and offshore incorporation system. And among the companies I looked into, I discovered that on the AIG website—and I believe it’s when you were still running the company—it said: We pioneered the formation of captives almost sixty years ago—captives are reinsurance companies. And the website said that AIG offered management facilities to run the captives in Barbados, Bermuda, Cayman Islands, Gibraltar, Guernsey, Isle of Mann, Luxembourg—all offshore places. So can you tell me, what was the reason for setting up these captives offshore? What benefit to the client and/or to AIG?

GREENBERG: Well, captives were not wholly done by AIG. They were industry-wide. And there are many benefits. Many companies wanted to have their—if they insured with you, they wanted to have a captive offshore. There was a tax benefit, to begin with. And they had more control over the captive. It was not a company that would have broad shareholders. Usually one company would own it. And so that’s—it’s been very common in the insurance industry for as long as I can remember.

Q: Well, it said that you pioneered it.

GREENBERG: Well, I get credit for a lot of things. (Laughter.)

MURRAY: Pioneered a lot of things.

Other questions? Yes, sir. Right here.

Q: Thank you. Gordon Bell, Legacy Growth Partners.

I’ve enjoyed being an investor in some of the hard work that you’ve put in, Hank, over the years. And I recall very good conversations about the company’s progress. My thought about never forgetting what China-U.S. relationships have been, and who’s produced help, is powerful. And I saw the—I saw the—Roger Stone had an idea about never forgetting Nixon. I think it had something to do with a tattoo. (Laughter.)

What I want to ask about is risk. You’ve looked at risk in innovative ways for a long while. So my question today is, what risks are interesting? War, nuclear war, terrorist, climate change? And can we think about how to mitigate those risks with some of the tools, or evolving tools, and insurance and information technology?

GREENBERG: I think the best way to resolve some of these risks is politically, not by insurance. Politically. And I think that we have to be serious about that because it’s a different world, as I indicated before, than it is now. And some of the leaders in the world haven’t got a clue as to what could happen if it gets out of control. Look at North Korea. Our president met twice with Kim. Thought he had some kind of an arrangement. Didn’t. And yet, North Korea has probably—has not stopped building nuclear weapons or the ability to deliver them. And that’s the kind of world we’re living in today. The reality is, it’s a different world than our children are going to inherit. It’s a more dangerous world. And that’s got to be front and center in any of our negotiations with other countries. I’m concerned by it.

MURRAY: Way in the back there.

Q: Alan Batkin.

GREENBERG: Let me just finish that for a minute. About eight or nine years ago, a retired four-star general, U.S., was asked to take a small group of people to North Korea to see if we could talk them into giving up their nuclear program. I was one of them who went along, because we had some experience in North Korea. And we met with everybody, and they were very pleasant but wouldn’t budge. And I think everybody who’s done it since had the same experience. And that’s a reality.

MURRAY: Alan.

Q: Thank you. Alan Batkin.

Could you tell us about your experience in World War II, and Normandy, and what Omaha Beach was like?

GREENBERG: I’d rather not.

Q: I don’t blame you. Thank you.

GREENBERG: I served in World War II. I was recalled during the Korean War. And I spent—I was a company commander in Korea. I knew something about Korea and North Korea. It wasn’t a pleasant experience.

MURRAY: How do you think that affected your business career?

GREENBERG: I think quite a bit. You know, I left high school when I was seventeen years old and enlisted in the Army, lied on my age. When I came back after the war, I had to go back to high school to finish. That was the hardest thing I ever did in my life. But I did. I went onto college and law school. And then back in service.

MURRAY: Questions? Yes.

Q: Chris Stockel with FedEx. Hi, Hank.

You talked about—we talked about China. Can you maybe frame in a little bit more about the Asia—the growth of the Asian population that’s happening? And what are some of the economic pros and cons that the next three to five years in Asia might happen economically?

GREENBERG: Well, to me, in our company, it’s right now, to us, probably the best region in the world to expand. We’re operating in many countries in Asia. There are some that we are not in yet, but we will be. There’s a lot of change going on in that part of the world. So I’m optimistic about that. We have a long history in Asia, but it’s grown enormously. Compared to Europe, it’s not the place—Europe is not the place I want to expand into broadly right now. Selectively yes, but not into every country. Latin America, nothing to do in Venezuela, obviously. Brazil has got its own problems. Even the new leader is having problems right now. Argentina, Macri is trying to do a good job but he’s having problems, and whether or not he’s reelected is a question mark.

There are a couple of good questions that we’re doing business in and doing quite well. Chile is one of them. You know, so it’s a mixed world. But we have a lot of experience in operating around the world. And so I’m pleased with how we’re doing. But Asia is, to me, the place to be.

MURRAY: When we were talking on the phone the other day you said that Americans have to accept the fact that China will eventually pass us in almost every area of endeavor.

GREENBERG: I believe they’ll be the number-one economy in the world. It will be. They have come so far, so quickly. And they’ve got 1,400 million people. We have 300 million. And look how far they’ve come in the last decade. I mean, incredible. Not only in normal businesses but look at all the technology that’s coming out of China. When I first went to China, the only university that existed was Tsinghua University. Today there are many universities in China. Tsinghua is one of the best universities in the world. Many Chinese students are going to school all over the world. Many want to come here. So time has changed China dramatically. And I think it’s only the beginning. We have to keep that in mind. If we don’t want to lose our position, we have to watch how we—stop doing things.

MURRAY: Yes, sir. Right here.

Q: Richard Weinert.

The demise of AIG had to do with the big financial crisis and the fragility of the financial system at that time. Since then, there have been a lot of reforms and changes in the financial systems and regulations. What’s your assessment of the financial system today?

GREENBERG: You don’t know until you have to try them out, unfortunately. And it depends on the regulators as well, what they’re going to do or not do. I don’t believe that would happen—in this last—in this last issue that we had—that the president of the United States knew what was going on. I think he relied on the Treasury Department and whatever they said they did. Don’t you think it’s unusual for the Treasury secretary to have come from a company that was one of the first to get a bailout?

MURRAY: That was a question if you want to answer it. (Laughter.)

We’ve talked a lot about China. Can you talk some about India, your experience in India? There are a lot of people in India as well. Do you think it has the same kind of trajectory?

GREENBERG: We had a good business in India at AIG. I have not taken our company into India now. I’m on a couple of boards, but we’re growing in areas right now that I haven’t got the time or the people to go into there right now.

MURRAY: You don’t think it’s as attractive a market?

GREENBERG: Not yet.

MURRAY: Do you think it will be?

GREENBERG: Time will change—will determine that.

MURRAY: In the far back.

Q: Rago Rov (ph) from EY.

Just continuing on this topic about India, China continues to suppress India’s agenda on the world stage. You know, for example, they would never allow India to become a permanent member on the Security Council in the United Nations. So if you had an opportunity to advise Prime Minister Modi on this topic, what would that be?

GREENBERG: Say that again?

MURRAY: If you had an opportunity to advise Prime Minister Modi on how to gain prominence in the global trading system—perhaps have a seat on the—to earn a place in the global trading system similar to China’s—what would your advice be?

GREENBERG: Well, they’re going to have to have a lot more foreign investment in India. They have to be—some of the Indians have got to become more recognized in different parts of the world, in different organizations. It’s too cut up right there than it has to be. It was much better when I was running AIG. We had a joint venture that was very successful in India. But that’s not possible now. It’s very difficult. And the rules are very difficult for foreign companies. So while we’re a member of several boards with India-U.S. businessmen, the enthusiasm is not there yet.

MURRAY: Last question? Anyone want the honor? Yes, ma’am, right there. Middle table.

Q: I’m Jan Berris with the National Committee on U.S.-China Relations, an organization that Hank has been enormously supportive of over the years, and we’re very grateful for that.

But, Hank, I’d like to follow up on Herb’s question about the mood in this country toward China. A lot of us are very concerned. And you lived through a period—a very difficult period in this country of McCarthyism. And a lot of people, especially those in the Chinese-American community today, are very concerned that we are perhaps slipping back into an era that’s similar to that, with anyone of Chinese descent, even if they’ve been here for decades and for generations, being lumped into a category of sky, or cheater, or whatever ugly phrase might be directed toward them. And with your wisdom of having lived through that period, I wonder what advice you could give those of us who are concerned about this, how to prepare against this? Just yesterday there was a new organization that was just launched. It’s a revival of an old one, the Committee of the President Danger. It used to be Russia was the present danger. Now China is the present danger.

So how can—granted there are lots of things that China has done wrong or not been clever about doing in terms of keeping the U.S.-China relationship or bringing it to this point. But what advice can you give to those of us who are concerned about this, to keep our own country from sliding back into a very ugly period?

GREENBERG: It’s a good question. And many of us think about that very frequently. I was at a meeting during the week in Washington. All the international companies, business roundtable. And many of the companies in that room, many of the top companies in the country, do business in China. And they all have a concern that—and the president came to the meeting—are concerned that he’s more interested in winning than thinking about the long term. And that’s an issue. If he, as we said earlier, if he tries to hold tariffs, if they’ve made a deal and still hold the tariffs on them in case China breaches the agreement, so the punishment would be they would have the tariffs. I don’t think that’s going to fly. I’m not saying he’s not going to do it anyway. I have no idea. But we can’t treat China as an enemy. We have to work on making the relationship positive.

Now, China is not going to—in my judgement, China is not going to change everything that we want changed now. They’ll make a great many moves that will improve the relationship, the ability between both countries to trade with each other, but there’ll be some things they won’t do right now. It will take time. And we have to have the patience and we have to have the wisdom in dealing with China to keep that from going off the trail, going off track. It’s in China’s interest also to do that. And many people in China high up in government favor that approach. And so it’s not going to be easy. And I can’t tell you how it’s going to come out.

MURRAY: Hank Greenberg, fascinating life, fascinating career, great discussion. Thank you for taking the time today. (Applause.)

(END)

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