Billionaire investor Steve Schwarzman had the perfect summary of middle class anger and the rise of political populism

Donald trump rally 10-27Jeff Swensen/Getty ImagesRepublican presidential nominee Donald Trump speaks at a campaign rally in Geneva, Ohio.

There’s a big chunk of the US population that should feel “scared” and “insecure, according to Steve Schwarzman, CEO of alternatives giant The Blackstone Group.

As part of a “fireside chat” during the annual Knight-Bagehot dinner, Schwarzman was asked about the swell of populist sentiment in the US and around the world.

“I think we find ourselves in the midst of populism,” said the billionaire. “It makes complete sense, because the middle class — whether it is in the US, Europe, or almost any democracy — has not had a good experience, particularly since the financial crisis. As a result of that, they’re unhappy, they’re angry.”

Schwarzman then noted a recent study from the Federal Reserve that showed 46% of Americans can’t cover an unexpected $400 expense if it were to arise.

“When half the population can’t marshal $400, one pay check, they should be scared,” said Schwarzman. “They should feel insecure, they should be unhappy with their government that has failed them — which is what they think — it is all logical.”

Schwarzman then said the causes of the low economic growth and financial instability in the country were poor policy decision made by the G20 body following the financial crisis. Instead of allowing banks and financial institutions to lend more and put capital into the system, the countries instead instituted tighter regulations, slowing an economic recovery.

“You can’t shrink yourself to happiness, unless I guess it is weight loss,” he joked.

These policies have had consequences outside the financial system, the Blackstone CEO said, including in the political realm. Here’s his explanation:

“These people who are the victims are correctly articulating the problem. That anger moves around. Sometimes there are government officials who direct [the anger] for their benefit. It goes to financial people, it goes to income inequality, it goes in areas of race relations, it moves all over. It goes to trade, it goes to relationships with foreign companies, foreign countries. It needs to be solved. Each one of these issues seems to live on its own, but actually it doesn’t. It is part of the whole.”

Schwarzman then said the country would have been better off if former Republican nominee Mitt Romney was elected instead of President Barack Obama in 2012.

He was then asked whether a Trump presidency or Clinton presidency would be more advantageous to Blackstone. He paused, eliciting laughter in the room.

“This is a really tough election,” he quipped. “I think certainly there would be a unpredictable outcome if Donald was in that seat. But, you know, it would somehow find its way. If Hillary was in that seat, it would be a bit more predictable, but the Democratic party has really changed, in terms of its center.”

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