A Conversation with Citadel CEO Ken Griffin - Milken Institute Global Conference 2025

Please welcome Milken Institute Chairman Michael Milken in conversation with Citadel CEO Ken Griffin.

Ken, thank you for joining us today. It's an honor to be with you, and it's been a long journey since I remember speaking at your office in Chicago many, many years ago. So, we started on Monday, and we began this conference with a series of dialogues on Friday and Saturday on our salons about the American Dream and about the commitment to make sure it endures for our children, our grandchildren, but maybe even more as an ideal for the rest of the world. And I can think of no better individual to culminate this year's Global Conference. Obviously, you've built one of the greatest financial firms our country's ever had, maybe one of our most effective philanthropists, and what I enjoy most, a very serious, thoughtful person on a broad range of topics.

So, I thought we might have the theme of this discussion, course corrections. And therefore, what are the topics we should think about for course corrections? Let's start with the economy. We've seen a great deal of volatility related to the tariff policies. What is your outlook, and what is your solution to help us get back on the current path?

So, before we journey into that conversation, I think all of us in this room would love to give you a huge round of applause for your commitment to the American Dream. Thank you.

So, are you ready to take on that very simple question?

So, we'll go back to the ending of the video, which speaks to a country where people felt economically they were being left behind in the wake of a pandemic. And there's no doubt that the combination of poorly thought-out fiscal stimulus, an incredible regulatory burden, and unchecked inflation was leaving almost every single American household feeling like they were being left behind. And President Trump was elected in the hope that America could reopen for business, that American businesses could flourish, and that American households could enjoy economic prosperity similar to that enjoyed, for example, in the early 2000s or the late 1990s. And we're now, what, roughly 110 days into the new administration?

I've stopped counting.

And clearly, first of all, you mentioned that Scott Bessent was the opening speaker, and I am so appreciative that Scott Bessent laid out his vision for how to reignite growth in the United States. I mean, it's been a long time since we've seen Washington put forth a plan for real economic growth. And there are areas in that plan that we can debate, and we will do so over the next few minutes. But it's just great to have a starting point for a dialogue or debate. And I applaud Scott Bessent for doing so. If we look at the plan, there are three things that are worth talking about. Number one is, how do we navigate the days ahead of us in terms of economic policy, tariffs, taxes, and deregulation?

I think my views on tariffs have been pretty well established. I view tariffs as being extraordinarily regressive as a tax policy. I actually think they're contrary to the promise that the President made to the American people in terms of improving their standard of living because it's going to raise the cost of goods for households who can least afford the bill. Now, of course, the administration will argue that tariffs will help to bring corporations back to America in terms of their manufacturing base. I'm suspect as to whether or not we're going to see a material number of new jobs created in manufacturing. I mean, first of all, most people forget that manufacturing today, people in factories, only accounts for about 4 or 5% of the entire workforce.

We have moved into a post-industrial world across much of the United States, same as the country did with respect to agriculture 125 years ago. I don't know what your family's roots are, but my family's roots on both sides were in farming, farming in the Midwest. And we had, at the turn of the last century, almost half of all Americans involved in the production of food. But because of the incredible advancements in farming technology, machinery to save farmers' labor, American farmers now not only feed our country, but feed a substantial portion of the world. And they're only 2% of our workforce.

And when you think, in the 1800s, it was 80 to 90%, it's an amazing advancement.

It's extraordinary, right? It's extraordinary. It's freed up an enormous amount of talent and human capital to further enrich our lives in various other ways. With respect to the President's desire to maintain the current tax status quo and to provide additional tax relief, whether it's for tips or for people working overtime, I will tell you that the President faces a much more difficult hand today than we faced as a country at the start of his first administration. Debt-to-GDP has gone from just under 100 to over 120% in that period of time. Both real and nominal interest rates are materially higher. And the financial flexibility that we have as a nation to continue to run deficits is in question.

And I am worried that we are not taking a step back and thinking about the fact that as difficult as the trade deficit is for our country, our nation's loss of access to global capital would be far more devastating. We cannot run a deficit of $1.5 to $2 trillion for as far as the eye can see. And the Treasury Secretary has been clear that he wants to bring the annual deficit down from roughly 6% to 3%, but I'm not sure we're going to get there with the current set of policy initiatives on the table. The third is deregulation. And here I will tell you, the Trump administration has been a godsend. The deluge of regulation that was crushing American innovation and creativity stopped in a day. Stopped.

Now it's not as clear to me that we're going to head towards a material regime of deregulation. Part of having one of the wealthiest countries in the world is we want a government that's going to ensure that we protect our environment. Look, for example, at the focus on cleaning up the food chain today. The focus on cleaning up the food chain is another form of regulation. Our country, as it has become richer and more prosperous, wants to make sure that we have healthy food, clean rivers, clean air, that we have safe schools, safe streets. Much of this comes with regulation. So I'm not sure how much we're going to be able to roll back the weight of regulation, but the stopping of the deluge of regulation of the Biden administration is just incredibly powerful for American entrepreneurship.

So let me ask you another question, Ken. I, for the last 60-some-odd years, have been very focused on the human and social capital of a country. And the estimate for the US on the conservative side is about $1,500 trillion. And on the high side, maybe 100% more. So it dwarfs the size of the economy. It dwarfs the financial assets of maybe $250 trillion. And therefore, Brand USA is an important thing. It's worth thousands of trillions. How can the US regain its reputation as the most attractive place for capital formation and business investment?

Well, I think we're mixing two very important topics here because the human capital point, the human capital point speaks to not only our ability to raise our children to be thought leaders in the world where we need to do better today, but it also touches on the fact that for our entire lifetime, this has been the country where people go to for a better life. And so many of the world's best and brightest have come to America. I mean, if I ask the question, how many people in this room were either their parents or they themselves came from another country, I bet you half the hands in this room will go up. So, try this? Sure.

All right. Are you first or second generation in this country?

Think about how much of our country's human capital represents those who came here for a better life. And to be clear, when you walk away from your community, whether it's India or whether it's Eastern Europe, you give up everything to come here. It's a huge statement about the grit and determination that you have to chart out a better life for you and your family.

Well, I think if you measure the movement of people, to this country. Fifty-five million people now in the United States have come here. And in many of the cases, it's been the brightest, the great entrepreneurs of Nigeria or other countries that have come here. And so when I talk about reputation of investment, one is the investment in people moving here. You know, the majority of the students in graduate schools and the science in every area can, as you and I discussed, This chart shows it right here. There is not one graduate degree in the sciences where the majority of people today were born in the United States. So part of that investment is not just money. It's the investment in people that are willing to come and stay here.

Well, actually, but the key is they need to stay here. That's the key. And we're not doing enough to make access to staying in America either easy or preferred for so many of these students. It should literally be, if you graduate from one of America's great universities, great graduate schools, you just get a visa stamped to your degree. And frankly, a welcome to America. Like, 'Here's the swag, welcome to America, stay here and build your career.'

So the subject has been talked about for a while. How do we get it done?

That one befuddles me because if I meet with members of the House or Senate, they almost always agree with that statement. I do not understand our unwillingness to embrace a path to citizenship for those who come here for their education. Do you have an explanation?

No, I think we might see it, but what I saw in the efforts over the last 20 or 30 years are the Democrats felt we needed a path to citizenship for everyone that came here, no matter how they came here, and felt that they would vote Democratic. The Republicans wanted to increase substantially the number of visas for knowledge workers, and so it was kind of at an impasse. We might get to see a change in the next six months to a year, I think.

I hope so, because one of the real challenges that we face as a nation is a declining rate of GDP growth. We need to dramatically increase both domestic GDP and productivity per capita if we're going to make good on the entitlement promises that we've made to every single American.

So when you speak of GDP growth, how does that relate to resilience, innovation, and shared prosperity, Ken?

Well, clearly, innovation is at the core of productivity gains. Clearly. I mean, we go back to the story of the farmer. I mean, if you've been on a modern John Deere tractor, it's like the size of one of those earth-moving trucks in a strip mine. They're just ginormous. And they navigate around the field with GPS. They don't miss a single inch doing the task they're set forth to do. The productivity gains from that are stunning. And so innovation is at the root of all of our productivity gains. Today, of course, the biggest story being AI and how much will we increase our productivity on the back of both the AI revolution in the office and, in a very profound way, the AI revolution in manufacturing that will play out over the years to come.

I mean, what's really curious is do you actually want to have a heavy labor content factory today when in five to seven years, so much of that work will be done by AI-driven robotics? That's a question I think we're not even posing that we should be asking right here, right now.

So let's move to another topic. There are universities in this country that you have been the largest donor to, all-time donor to. Michael's going to have fun with this, I can tell. The cost of college education is rising, even if outcomes are not. What are some of your top course corrections to get American higher education back on track? And should donors measure the effectiveness of their gifts to colleges and universities? How do you measure your own when you're making these decisions?

Look, I think we've got to talk about two problems. Number one is universities start with the raw ingredients of what we produce from our K through 12 education system. Or you would argue preschool through 12th grade would be the right framing. And here as a country, In much of our nation, we're just failing. If you look at the state of Illinois, for example, there are 80 schools last year where not a single child could perform math at grade level. Eighty schools, not one student able to perform math at grade level. And if we're going to stay economically on top of the world, we need a workforce that's educated at the highest standards in the world. We have to radically raise the bar on both expectations and incentives in K through 12 education.

So America's universities are struggling with a student body that's not as well prepared for university as it was 30 years ago or 40 years ago. That's a huge challenge. Now, if I think about my days at Harvard, I was very fortunate. I was taught by some of the greatest minds in our country: Martin Feldstein, who, of course, you would know; Richard Neustadt; Larry Summers, who I know you know. These are people who are just phenomenal thinkers in their field, or Michael Sandel in the area of philosophy. So you were exposed to a very broad array of both economic and ideological thought. If you look at the issues in the elite schools, there's been a substantial shift towards the elite schools focusing on a progressive, both curricula and ethos, on campus.

And one might argue, have America's Ivy League schools, in particular, and Harvard, as a vignette of this, lost their way?

Ken, aren't you the largest donor that's actually not pledged but given money to Harvard?

Yes.

And how much influence have you had?

Well, if you align with where the university is today, where I think we should be, I think I have fallen short on influence. So let's... Michael's like, "How short did you fall?" You know, that's what he wants to ask. Like, "Painfully short." And if I look at this, I'm going to... No, I'm not going to share the story because it's too humiliating for the university. I mean, the key is... Let me give a story. When I interviewed with admissions at Princeton, they said, "Only come here if you aspire to change our country."

That's what I ask those going into finance today: "Only go into finance if you aspire to change the world."

And I think Harvard has lost that key point, which is when you are able to attract the greatest students in the world, when you have one of the greatest faculties in the world, every student there should be there on a mission to change our country and to improve our world. And they should transcend the place they have gotten to today and revert back to the pivotal role they played in the course of American history in generating, in creating the future leaders of our country.

Ken, many years ago, there was a...

I'm going to just... I'll let you have a little more time. One more shot at this. All right. Much of my gift to Harvard has been for financial aid. And it is because I was fortunate enough to go to Harvard on a scholarship from my grandmother. It would have been damn near impossible for my parents to make ends meet and to put me through Harvard. But my grandmother saved money over the course of her life to put all of her grandchildren through college. And I had hoped by making a... the largest gift in the history of the university to financial aid, I could open the gates of the university to more Americans from families that just do not have the resources that the alumni of Harvard have generally had.

And I would make that gift all over again in a heartbeat because I really do believe that American education is such a gift to our future that we should all support our universities across the nation—whether it's our great state schools, our great Ivy League schools—we want to make sure every single student in the United States can have an opportunity to go to college. And if you look at lifetime earnings, there's a lot of arguments today about what people make who graduate from college versus if you didn't go to college. The wage gap grows with every year of life. So if you're in your 50s or 60s, having been to college is a material improvement in your family's financial circumstances. We do not want to let the current debate undermine the very important truth that a college education which grows human capital is still an extraordinary part of how we help people live the American dream.

Thank you. I'm going to move now a little younger than college. You have a number of major foundations—Gates, Annenberg, Chan Zuckerberg, others who have been broad—that when they look at their contributions to K-12 or early childcare, they've been now feeling that this was not successful in what they were doing. And maybe it didn't work, et cetera. Many years ago, we had this documentary called Waiting for "Superman". Jeff Skoll's company did it. Davis Guggenheim made it. And I took this video and documentary to community and community and had different people watch it and see how they felt. And it featured Success Academies, Eva Moskowitz's work that you've supported. And it was very interesting, the reactions.

On one side, particularly those with higher net worths were embarrassed that this is America today, and they hadn't thought about it more or done something. But there was another group of people, particularly that were in lower income or particularly poor, who felt that unless everyone could win the lottery to go to a charter school, that no one should—that their child shouldn't lose out to the child one block away who was lucky enough to win the lottery to go to school. You've been a major supporter of Success Academy and Eva. We know what the results are of hers and others around the country today relative to others. Why haven't we moved faster? We have some states like Texas that have finally gone to school choice.

What do you see as the results here? And when you reflect on your own investments in early childcare or K-12, how do they stack up?

So I see in front of us the Success Academy middle school's, high school Regents Exam scores. Is this right?

Yeah.

Everybody sees these numbers? Yeah. So you can see that the Success Academy students do far better at passing the New York Regents exams. But what's really profound about this graph is these are the middle school students at Success Academies versus the high school students in the state public schools.

Why don't you repeat that for the audience?

All right, just in case it got lost: these are the middle school students at Success Academies, a student body which truly represents the demographic of inner-city New York. That's the student body at Success Academies compared to the public high school students of New York State. So Eva Moskowitz, I mean, she literally does God's work. I have been in her classrooms. The children are so dialed in, it is almost hard to imagine. One of my colleagues was in a New York public school, and he posed the question, 'To whom did the United States go to war with for its independence?' And a number of the sophomores were like, 'We fought for our independence?' And he goes, 'Yeah, we did. We went to war for our independence.'

'Do you know who?' And one of the students said, 'Well, it was Germany.' And he goes, 'Well, it's the right continent.' If you walked in a Success Academy classroom—I was there with Dan Loeb, the hedge fund manager of Third Point, and we were in the AP Art class. And Dan and I are both big art collectors. And they would put up a painting: name the artist, name the era, name sort of the zeitgeist of society at that moment in time. They'd put up a painting, and Dan and I looked at each other and we're like, 'No idea.' And some African-American student puts her hand up and goes, 'That's so-and-so, 1830. This would have been the main cultural issues at that moment in time.' It is so impressive. You go from art to macroeconomics to AP Calculus, you see the same enthusiasm and energy and command of knowledge in each and every one of those rooms.

So why am I saying this in such belabored points? We know how to educate children. She educates tens of thousands of kids over the years at Success Academies. We know how to do it. We simply must choose to do it. And this is where the public-sector teachers' unions and the body politic gets sideways with what's in the interest of society. You know, we're in the state of California. I was one of the funders of litigation in the state. California enshrines in its constitution a student's right to a good education. Well, what we learned in the state of California is that the teachers in the elite communities who are the poor teachers are pushed out of those schools. They're pushed into the schools of middle-class communities.

And within middle-class communities, the poor teachers who are not delivering the job are pushed out into the inner-city schools. So you have a wildly disproportionate number of your weakest teachers in the state of California are in your inner-city schools. And you perpetuate the cycle of poverty. You don't break it, you perpetuate it. And Eva Moskowitz demonstrates beyond any shadow of a doubt that any student from any household—almost every one of her kids goes on to a four-year college—can be taught the skills and knowledge to be an incredibly contributing member to society. She's incredible.

So, a little while ago, we gave our 3,000th award, our National Educator Award. And I gave it to a teacher at a BASIS school like Eva's schools, but this one was in D.C. And there's 25 or 30 in the country. And it's maybe six blocks in D.C. from where our Center for Advancing the American Dream is going to open. And this school, 100% of the kids in a very diverse demographics, 20%, 22% from all different types of races, 100% went to a four-year college. The average scholarship that the graduating seniors got, the average, was $190,000. And the average kid by the end of the 11th grade had taken more than 10 and passed more than 10 APs. 20% African-American plus, 20% Hispanic, 20% Asian, 20% white or so, and then a mixture.

I then gave a teacher an award who had done outstanding work in another school in D.C., just a few blocks away, the same demographics. And 15 percent of the kids went to four-year colleges, not 100. And less than 20 percent of the kids in the school ever took an SAT or ACT test. So this exists in New York, but it exists throughout the country. I think maybe you can articulate what is your strategy after all this work? What do you think is the most effective way to change this effort?

So, you know, I worked with the Chicago Public Education Fund for about 20 years in Chicago. And I hosted a dinner for the top-performing principals in the city. And what we learned is a good principal in front of the school goes a long way to make a school better. So that's one that we could all get our heads around. And then the principals would go into how the union work rules take away their opportunities to give their kids a brighter future. For example, in one of the poorest schools in Chicago, I can't remember the exact grades, but I believe it was the ninth-grade students who would take Algebra I actually had to go to a different school because of the union work rules. So their parents...

who are literally often working two jobs trying to make ends meet. The parents rotated who would pick up the kids each day of the week to take them from one school to the other to learn math. And this is happening in the United States of America. In the United States of America. We need to make sure that we are putting our students first. There is plenty that we know of what you need to do to do this. It's a question of will. So I, unfortunately, moved a lot of my focus into the political realm because I believe this is more of a political issue than a knowledge issue. We know how to educate the kids. We need people in local government, state government, and federal government who are committed

to improving the opportunity set for our children. You know, Governor DeSantis in Florida, for example, or the governor of Texas, as you mentioned, have really fought hard for charter schools, for students to have a choice and to end the monopoly that often exists in education. And you and I both know that monopolies often tend to result in what we refer to in economics as deadweight loss, but here the loss is the loss of a future of prosperity for the student. It's just wrong.

So of the 3,000 educators we've given these awards over the last 35-plus years, all schools are different. Many are principals, many are educators. And I think one of the things, Ken, we all recognize that competition is good. And one of the advantages of charter schools is it will eventually raise the level of the public schools. And that's part of the effort here in the communities.

And it varies greatly. With good testing, with good metrics which are needed, with good feedback to the parents. One of the things that we found to be most corrosive in Chicago was that when a parent asked, "How is Johnny doing in the classroom?" the teacher invariably would almost say, "Johnny's doing great," until Johnny can't pass the state's exam at the end of the year. So one of the things that you really need to do is make sure parents are informed about how their children are doing to close the feedback loop. Otherwise, the parents, they just take the answer as given. Now, to be clear, there are countless great teachers in the United States. I mean, I dedicated a theater in my high school in Boca Raton, a public high school, in memory of my English teacher who changed my life.

We all have those teachers in our lives who changed our lives. But we need to raise starting salaries for teachers. We need to have teachers have portable benefits so that when they're tired of teaching, they can leave the profession to pursue other professions. There are clear things that we can do to raise the bar of excellence in our classrooms, but it's political will. So, for example, I just spoke about having teachers have the ability to have portable benefits. Right now, it's very hard to leave teaching in Chicago after 25 years. Big pension plan to stay. If you leave, you lose a lot of it. So, I'm tired of teaching. I want to move on, and economically, I can't. We need to end those traps.

So we're talking a lot about education, but it's the bedrock of our country. And the other day, Ken and I put up a slide showing that between 1870 and 1960, the US became the most educated country in the world by two years. And since then, other countries have now caught and passed the United States. And I've tried to say, OK, what really changed? And what really changed, what I saw, was the emancipation of women. So this country for 100 years was educated by the most talented women who were denied opportunities to be the CEO of GM or the CEO of IBM or Lockheed or others. That's correct. And once that opened up, we didn't figure out what is our compensation system and incentive system for the best and brightest to come in.

But let's go to maybe the last subject we can cover today, philanthropy. The wealthiest group the world's ever known are the baby boomers. Unlike the oldest baby boomer, you're a little younger baby boomer.

Actually, I'm just a little younger. You missed it. I'm going to enjoy that moment for a bit longer.

The enormous wealth that's going to pass on here, a good percentage of it's going to go into philanthropy. And so as you look at this transfer of wealth or the increase in philanthropy, we're about to have a philanthropy being created in this country in the next few years that right now would be valued at $150 billion, and that's Warren Buffett's. What is your experience in these areas? You've been in different communities. You've gone to Florida. Give us just a couple minutes here in closing. What have you learned in this activity over the years? What advice would you give others?

So first of all, I think when people choose to give money away, it is deeply personal. So there's no one-size-fits-all. For me, I'm trying to use my philanthropic capital to create change across society. So we do a lot of work with seeding ideas or concepts that we think can be rolled out either across the state or across the nation. So, for example, in the pandemic, there was a golden opportunity to come together to bridge the digital divide in Chicago that existed in the inner city. Thousands of kids, tens of thousands of kids had no access to the internet. Families couldn't afford internet connectivity. And a group of us came together with the telco companies to put up the money to bridge the digital divide.

Now, that became part of the Biden stimulus package. Now, do you know what's awful about that story? They still have yet to spend the money to cross the digital divide. And part of the reason they won't spend the money is it's so expensive to take fiber to houses in rural America. But you know what's amazing? I bet you you have Starlink on your plane.

How do you know I have a plane?

I'm willing to bet. All right. So what's amazing is Starlink works in every private jet to keep people connected to the Internet, whether it's to stream movies on Netflix or to download the Encyclopedia Britannica, and yet it's not, quote, good enough for rural America. So this is where it gets to be very frustrating, because you look at what people are doing in the philanthropic realm. Clear wins on the board. And this is where I really do hope that the Trump administration breaks some glass. They need to break the bureaucracy in Washington that prevents these ideas from being translated into direct impact that helps fellow Americans. Starlink across rural America would end the digital divide, and they could do it in months.

And it would transform the lives of millions of people. But that was a big win, was that, was to demonstrate that we could actually, in our country, cross the digital divide. We do a lot of work in cancer and cancer-related research, as I know you have. Cancer's one of the great life-altering diseases of our life, as you know all too well. And my family's had family members struggle with cancer. We all will struggle with cancer in our lifetime.

One in two men, one in three women.

Yes. We've done a tremendous amount of work in public safety. We worked, for example, at the University of Chicago on predictive analytics as to where crime would occur in Chicago. Now, do you know what happens when you know where crime is going to occur? You pre-position the police officers to be there at the scene of the crime. Sounds like Minority Report, except the crime never happens. So we brought down the murder rate, for example, in one of the toughest neighborhoods in Chicago by 50% in the blink of an eye. It's incredible.

Ken, one last question, and we're going to go to this concert that completes six days of this conference. If a child walks into the Air and Space Museum in Washington, D.C. today, you've made a major effort here to upgrade that. What was your thinking behind that?

So, I was born of the era of the space age. My father worked at General Electric and he worked on the Apollo missions. And I do believe that when we as a nation put man on the moon, it was one of the greatest triumphant accomplishments in the history of humanity. I mean, we still haven't done it again in decades since. And we did it in the 1960s with technology that's so archaic we can't even relate to it or imagine it anymore. I really do hope whether it's supporting the Smithsonian or the Museum of Science and Industry of Chicago or the Field Museum in Chicago or the American Museum of Natural History in New York, that those moments occur where like a six-year-old girl goes, I want to be an astronaut.

And even if she never becomes an astronaut, she will pursue a life of learning and engagement and growth. I really do hope that creating those moments where a young child's inspired by science that I give them a gift that will forever spark their imagination, spark their creativity, and help them make the most of who they are.

Thank you, Ken. Thank you for joining us.

Michael, thank you so very much. Thank you.