There are another couple of people I would like to call your attention to that are very important , and that is Chuck Schwab and Rodger Riney . Now these guys were my corporate enemies 30 years ago . As Chuck just described , we struggled for years competing with each other , and the customers benefited from all of that . As I think back to when we started , we had a desk , a telephone , a pencil and a stack of buy and sell orders . When we would do a trade , we had a clerk type up the confirmation , put it in an envelope and drop it in the mail . And we had an accounting clerk that had a rectangular ledger accounting book , and she would write in longhand all of the trades that we made . At the end of the month , we would type up the month end statement and send it out to the customer . It is just amazing to me what has happened over the years since 1975 .
Now , I sort of feel not only good friends with Chuck Schwab and Rodger Riney , but I feel there is more of a kinship because they had to solve some of the same problems that I had to solve . When we started to become successful , we said we needed to do our own clearing so that we could give our customers better service . Now clearing has got a simple description : trade the money for the securities for the buyer and the seller . But the actual process of doing it is actually very sophisticated and complicated . And there isn ’ t any place to go and learn . There aren ’ t any books . There isn ’ t any school . Nobody is going to teach you how to do it . Maybe if you are located in New York you can hire somebody that has experience , but we are in Omaha , Nebraska . There is really nothing that we can do that would allow us to go into this activity with any experience . So we just had to do it . And when you do things like that , you make a lot of mistakes . Of course , we learn from mistakes , but it cost millions of dollars . And it was very heart wrenching , and it was very difficult .
The thing that really makes me feel that kinship with Chuck Schwab and Rodger Riney is that we had to solve many of the same problems in competing with each other , and I know after becoming friends with both of them that they are people of upstanding character , and it is a great pleasure for me to know both of them and call them friends .
RAY DALIO Founder and Co-Chief Investment Officer Bridgewater Associates
First of all , I want to say that this Museum is very important in terms of the educational programs that it puts on . Through my experience I have been surprised many times , and most of these surprises that we experience are things that never have happened in our lifetimes , but have happened many times before . The Museum is educating us and is a fantastic resource , particularly for the high school programs . So it ’ s a pleasure to be here .
It ’ s a particular thrill and honor to introduce this year ’ s recipient for the Whitehead Award for Distinguished Public Service and Financial Leadership , who ’ s a man I have admired for most of my adult life and who ’ s become a friend over the last 20 years . And I admire him , Larry Summers , for his brilliance and his character . In my opinion , Larry is the most outstanding — certainly the most practical — economist that I know because he brings his own brilliance to , and perspectives , that he ’ s gained in academic economics and political economics , and also in market economics . So he understands economics deeply from all of those perspectives , and he ’ s unique .
So how did he become unique ? Like everybody else , his DNA and his upbringing are the keys to Larry ’ s uniqueness . He was , I guess , genetically engineered to be an economist because both of his parents are economists , and he ’ s the nephew of two
Nobel laureates in economics . So , genetically , he was meant to be an economist . He ’ s a brilliant man who at age 16 goes to MIT ; at 27 he gets his Ph . D . in economics ; at 28 he ’ s one of the youngest ever tenured professors in economics at Harvard . Can you imagine at 28 being a tenured professor of economics at Harvard ? And Harvard made a very good choice in making him a tenured professor because for a number of years up until 40 , he wrote more economic publications than all professors combined at Harvard and most other universities . And at age 40 received the John Bates Clark Medal for the most contributions among his peers in economic thought in the United States . Quite an accomplishment ; quite a position at age 40 . And his career hadn ’ t even begun yet .
Essentially he then went on to his public service , to where his career really began . He began as Chief Economist of the World Bank ; he was Under Secretary of the Treasury and Treasury Secretary under Bill Clinton ; president of Harvard University ; and then essentially President Obama ’ s chief economic advisor , and more responsible I think than anyone else in terms of setting the administration ’ s policy .
Over the last 20 years , Larry has been involved in fixing every major economic problem that has existed . So , that ’ s his public service , with a break as president of Harvard University .
Think of each one of those jobs as an amazing , amazing job . And in each one , Larry has created a number of accomplishments . One of the things he did was inflation indexed bonds , and that ’ s when I met Larry . He came up with the idea that the United States should have inflation indexed bonds . We were the only bond manager who traded in global inflation indexed bonds , and it gave us an opportunity to get acquainted . And I had met Treasury Secretaries before , but I never met a person who analytically understood the markets as well as Larry did .
So he put together the inflation indexed bonds . When he launched it , he cleverly made the statement , “ Years in the future , I ’ m going to be able to look back on this , and we ’ re going to be able to say that either we saved the Treasury a lot of money , or that we made a hell of an investment for individuals .” Larry was beginning to learn how to be a politician .
www . MoAF . org | Winter 2017 | FINANCIAL HISTORY 15