Ken Langone on preventing Hurricane Florence price gouging

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Ken Langone on preventing Hurricane Florence price gouging

Home Depot co-founder speaks out on 'Your World' about how his stores combat profiteering during hurricanes, opens up about funding tuition for medical students and weighs in on the state of politics.

This is a rush transcript from "Your World," September 12, 2018. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: You know, one of my favorite guests on the show is Ken Langone, not because he's just generous or Italian or that he's a billionaire trying to do some good, but he calls a spade a spade.

He calls egregious policies and activities, especially what's going on now ahead of this Hurricane Florence, some of the reports of price-gouging, he will let you know how he feels, like he did last year, when he was were in the middle of hurricanes and some wild customers were pulling stunts like this.

He joins me right now.

Of course, he's the Home Depot co-author, the hundred the runaway bestseller -- I think it's even surprised him -- "I Love Capitalism," and capitalism loves him back, and a lot of people who are benefiting from that and his generosity as a result.

Ken Langone, good to see you.

KEN LANGONE, CO-FOUNDER, HOME DEPOT: Thanks for having me, Neil.

CAVUTO: All right, let's talk a little bit about these reports early on -- it doesn't take long -- about gouging and then in some areas, in North/South Carolina, Georgia, Virginia, we're getting sporadic reports of people hiking the price of a lot of stuff.

LANGONE: It's horrible.

CAVUTO: What do you do?

LANGONE: What do you do? You do what Home Depot does.

First of all, we wish we didn't have this kind of business. We would prefer not to have it. But it's here.

The thing you have to do is to make sure you help those people manage through this in the best way you can. So, we are very conscious of that, and we do everything we can to make sure that the profiteers don't take advantage of what we're trying to do to help the people who are hurt. We have done that ever since we have been in business.

CAVUTO: And you pound that to all your managers.

(CROSSTALK)

LANGONE: Absolutely.

Look, this is -- thank God, this is business we prefer not to have.

CAVUTO: Yes.

LANGONE: But that's not God's will.

God has decided the storm is going to be here. And it's here. And we're going to do everything we can as a company to help those people through this period of time in the best way we can.

And we're going to do it, for sure, by making certain that people don't come in and profiteer by taking advantage of what we're trying to do. We have had people that literally would buy stuff for us, go on our parking lot, mark it up 10 times.

CAVUTO: Is that true?

LANGONE: Oh, absolutely. Absolutely.

CAVUTO: How do you avoid...

(CROSSTALK)

CAVUTO: How do you avoid that?

LANGONE: Well, you limit how many they can buy.

CAVUTO: Yes. OK.

LANGONE: That's one thing.

But the other thing you have to do is make every effort you can to let our people -- and thank God for -- we got -- let me tell you something. We have got a culture in this company that is second to none.

Our people understand this is a time for us to come out and help those people who are hurting any way we can. And the stories that will come out of this terrible storm of what our people do makes Bernie and Arthur and me and Pat Farrah, makes the four of us feel like, you know what? We started something pretty good 40 years ago.

CAVUTO: You did, in the middle of a very difficult economic environment.

LANGONE: Yes, it sure was.

CAVUTO: Let's switch gears a little bit here. You have been very generous with your money, Ken Langone Medical Center and a lot of other things.

LANGONE: Elaine and Ken Langone Medical Center. She's half the deal.

CAVUTO: All right, fine.

But you extended this free tuition to medical students with $100 million gift from you and your wife to do that.

LANGONE: Right.

CAVUTO: And the video of this and the kids reacting...

(CROSSTALK)

LANGONE: Oh, unbelievable. It was unbelievable.

CAVUTO: They were stunned.

Why did you do this?

LANGONE: First of all, we're blessed to be able to do it. Can't do what you can't -- haven't got.

CAVUTO: Well, a lot of people don't do that.

LANGONE: Well, that's their call.

And you know what? I believe in capitalism, including my telling -- not telling somebody else what to do with their money. That's part of capitalism.

We feel a commitment to this. We did it. We're living at our country. We're longer, and older. Health care needs are going to go up. We're going to be short 50,000 primary care physicians in 12 years, 25,000 to 30,000 pediatricians, 30,000 gynecologist, OB-GYN.

And we just felt like this is one great way that we as part -- we're not it. Don't forget, the whole package is over $600 million. We were there.

CAVUTO: That's not chump change.

LANGONE: No, no, we were there. But we had a lot of great, generous partners with us.

CAVUTO: What will that mean for the kids? They won't have any debt.

LANGONE: They will have no medical school debt. It's going to cost them approximately $27,000 a year to have quarters and food and stuff like that. But their tuition is on us.

CAVUTO: Do they have to meet a certain grade point average?

LANGONE: Nothing. Just show up.

CAVUTO: Just show up.

LANGONE: Get admitted. Get admitted. Work like the dickens, and when you get done, go out and make people feel that you really care for them as people and then patients.

The biggest challenge we have, in my mind, is obviously we had 10,000 applicants last year for 92 positions.

CAVUTO: Wow.

LANGONE: And that's what they were paying. I'm sure the numbers are going to go up.

The thing we have to be careful -- and it's a high-class problem, but it's a problem -- we want to make sure we pick people who also, besides being brilliant -- and they are brilliant and working hard -- that they're compassionate and they have empathy for people.

Great doctors have a great way of letting the patient know they really care for them as people. Yes, they're the doctors and they want to help them get better, but there's a great bond between doctors and patients. And we have to make sure that our generosity ends up in the hands of people that are really, totally committed to helping the world live better.

CAVUTO: It's remarkable.

(CROSSTALK)

LANGONE: Just think of Elaine and I. who would have thought it? Only in America.

That's the other thing. This could only happen in America. Damn you politicians. Both sides, stop knocking us. We're great.

CAVUTO: Well, you just said politicians.

And I'm thinking, you are endorsing -- I was surprised -- Andrew Cuomo for reelection for governor. Right? Now, he was famous for saying a couple of weeks ago America was never that great.

LANGONE: He ought to be ashamed of himself. He was ashamed of himself. OK?

CAVUTO: Did you tell him that?

LANGONE: No. I haven't had a chance to. But when I see him, I will.

CAVUTO: Well, he watches this show.

LANGONE: Well, his grandparents or great-grandparents came here for one reason, like my grandparents came, because where, there wasn't -- my grandfather, when I asked him, have you ever gone back, he said, no, why would I go back?

CAVUTO: Well, did you tell him this?

LANGONE: I haven't had a chance to. I haven't had a chance to yet.

Now, I would have felt better. By the way, I will tell you what bothers me more than what he said. The way he backed away from it. He called it inartful. Instead of saying, I'm sorry, or I wish I hadn't said that or it was wrong...

CAVUTO: Why are you backing him?

LANGONE: Because I think he will do a good job.

He will do as good -- first of all, he's going to win. He's going to win.

CAVUTO: It's just you must as well go behind the winner?

LANGONE: Look, look, look, Andrew means well. Andrew, honest to God, at the end of the day...

CAVUTO: You don't think he meant what he said?

LANGONE: I hope he didn't mean what he said.

(CROSSTALK)

LANGONE: He said he was inartful. Now, I looked up in the dictionary the first definition of inartful. It says crass or whatever it is, but not necessarily untrue.

So when you say inartful, if he says -- and that's the word he used,, it was inartful. Come out and hey, look, I blew it. I'm sorry. I didn't mean that. This is the greatest country on Earth.

CAVUTO: But he didn't say that.

LANGONE: He said none of that.

CAVUTO: All right, let me switch gears, J.P. Morgan CEO.

LANGONE: Yes, Jamie, best.

CAVUTO: Right, Jamie Dimon, he said that his...

(CROSSTALK)

LANGONE: One of my huge holdings, J.P. Morgan.

CAVUTO: I understand. Fine.

But he said his wealth wasn't a gift from daddy, referring to Donald Trump. He says that he's smarter than he is, referring again to Donald Trump, but he's not entertaining running for president.

What did you make of that?

LANGONE: The one thing I'm excited that Trump has done has made it possible for people other than politicians to think they can run for president of the United States. That's good.

CAVUTO: Would he be a good president?

(CROSSTALK)

LANGONE: Jamie would be fabulous. My only problem is, I own all of this stock in his bank if he becomes president. But he's got a great team there.

CAVUTO: You wouldn't take your money out, would you?

LANGONE: No way.

(LAUGHTER)

LANGONE: He has got a fabulous team there.

Let me you about Jamie. Jamie does it right. Jamie is the very best. There's nob -- I had a good fortune to serve on the (INAUDIBLE) board with him for years. I have seen him close up. He's a clear thinker. He's put together right. He's motivated by the right things.

And he cares about quality and he cares about results.

(CROSSTALK)

CAVUTO: Apparently, he's not a big fan of the president.

LANGONE: That's Jamie's call.

CAVUTO: Are you?

LANGONE: I'm a big fan of what he's doing.

CAVUTO: That's not quite what I asked.

LANGONE: Listen, give Trump credit for this. He's behaving exactly the way he behaved in the campaign.

So, the American people didn't get fooled by it. Those people that voted for him saw him close up in the campaign, and they decided, we want this guy.

See, the thing to me that really blows my mind, Trump is the fever. Trump is not the disease. The disease is the anger and frustration and disappointment of the American people. And they have a right to feel that.

Look at public education in America. Nobody has done a thing about it. It's gotten worse and worse and worse and worse every ye. Obama could have been the greatest president in history if he had said, I'm going to focus on one thing, public education, because the way forward for people and kids, closing the income inequality gap, the way forward, education.

We're not doing that. These poor kids in public -- people -- if I get a crowd of bankers in a room and I ask them, how many people have children in school, and they raise their hands, I say, how many people have them in public schools, not one hand goes up.

Why? Because they want their kids to have good educations, and you're not getting it in public schools. There's a lot of things our politicians have failed us with. And I think the message of Trump is not Trump, but the decision of the American people to elect Trump as their way of saying, we're tired, we're sick of what's going on. We don't like the way we're being treated.

CAVUTO: Then what do you make this Bob Woodward that is out that says it's just bedlam there and confusion, his volcanic temper, people don't trust each other, they're looking over each other's shoulders?

Then someone writes an anonymous editorial in The New York Times. What do you make of all that?

LANGONE: I'm suspicious that we're getting close to a midterm election.
And this anonymous op-ed, Woodward's book.

And I'm also intrigued by the number of people that he cites in the book that have come out vocally and passionately saying, I didn't say that.

Come on.

CAVUTO: So you don't believe it?

LANGONE: I have to not believe it to the extent that General Kelly or General Mattis, whoever it is, comes out and said, I didn't say that. I said nothing like that.

I don't know where he got that.

CAVUTO: You like what he's done economically. You clearly like what he's done for the markets.

LANGONE: I like what he's done with regulation.

CAVUTO: So if the House were to flip, as seems to be a concern among a lot of Republicans, would that make a difference to you?

LANGONE: Not really. Not really.

CAVUTO: Really?

LANGONE: Because I think -- I'm guessing. What the hell do I know? I'm guessing. I will they will probably end up, if they will, they have a 10- seat majority.

CAVUTO: The Democrats?

LANGONE: In the House.

CAVUTO: Right.

LANGONE: I think the Republicans will probably have 53 or 54 senators.

CAVUTO: Why don't you think the president is getting more of the good will from this good economy, from these good markets? And now there's been a battle back and forth between he and President Obama who takes the credit for this bull market, the longest in history. Who does?

LANGONE: Forget about -- Obama ought to do what every other great president did. Go off into the sunset.

My (INAUDIBLE) the mother of the groom. Wear beige and keep your mouth shut.

(LAUGHTER)

LANGONE: OK?

What I'm saying is that, like it or not, Trump's base is rock-solid. Donald Trump needs 15 percent of the voters to get reelected in 2020. That 35 percent and everybody knows it is rock-solid.

I would hope he would do things different than he does, but damn it, give the guy credit. The Koreans had that big parade. They didn't have one of those...

(CROSSTALK)

CAVUTO: Long-range missiles, right.

LANGONE: Right.

We had a meeting with them. I watched John Kerry on television this morning. Oh, we couldn't get a meeting with them. Trump got a meeting with them.

What came of it? Well, we got three guys released.

CAVUTO: You don't think he's treated fairly?

LANGONE: I'm not suggesting he's treated fairly. I'm suggesting he's getting -- I don't think he cares about being treated fairly.

He told the American people what was going to...

CAVUTO: Well, did you? In your days, every action you would take in corporate news, anything, did you worry what the media was saying about you?

LANGONE: No, because I knew the truth.

How about what Spitzer tried to do to me, my buddy, OK? He gone. Bye-bye, Eliot. I'm still around. Where's Eliot, OK?

CAVUTO: You were one of the few to take him on.

LANGONE: You know, Neil, let's understand something.

We live in the greatest country on Earth. And the American people spoke loud and clear. The establishment is shocked that Donald Trump won. But he won. He won fair and square.

I don't -- this Mueller investigation, come on, let's end it. Let's decide. Come out and say what you got.

There's a notion here this guy should not be president of the United States. I beg your pardon. He won fair and square. He won 307 electoral votes. He is our president. Respect the office of the presidency.

CAVUTO: Let me get your take.

You mentioned about business titans who now, because of the success of Donald Trump, should and can now consider going for the highest office in the land.

LANGONE: Yes.

CAVUTO: You mentioned Howard Schultz and Michael Bloomberg.

LANGONE: Mike Bloomberg, Jamie Dimon.

CAVUTO: Jamie Dimon.

LANGONE: I hope Jamie would keep an open mind.

CAVUTO: What about Ken Langone?

LANGONE: No. Get out. Are you crazy? Are you nuts?

CAVUTO: Why?

LANGONE: If you think Trump is driving them nuts down there, you send me down there...

CAVUTO: Why wouldn't you entertain it?

LANGONE: Because I love the life I have.

I love what I'm doing. I'm happy with what I'm doing. I'm thrilled to pay my taxes. I live in New York state, although I could live someplace else and save a lot of money. Elaine and I view paying taxes in this state as our due, because we succeeded.

CAVUTO: Well, you paying those higher taxes is a lot different than the $300,000- or $400,000-a-year couple. Right?

LANGONE: But I'm paying it.

CAVUTO: I know you are. But there's a big difference between a billionaire dealing with that.

LANGONE: Yes, and I pay more taxes too. That works out.

CAVUTO: I know. You just seemed a little sensitive.

LANGONE: No. I'm not.

You want to know something? I love my life. I have a great life. I'm going to be 83 on Sunday. If it ended, I had it all. Look, Monday night, I had a little get-together of all the EDS -- 50 years ago today, I brought, EDS, Ross Perot's company, public.

CAVUTO: Oh, wow. Sure.

LANGONE: Biggest break in my career.

I went down and we had dinner with a group of people, all the guys who were there when Ross started the company. It was one -- this could only happen in America, no place else.

CAVUTO: So when you hear what lately Jeff Bezos and, of all people, Bernie Sanders coming to blows on this issue whether Amazon should be more generous with its workers, pay a tax to compensate for the government, you know, programs that a lot of his workers get, even though he pays them very well, on average, what do you make this of back and forth, this whole socialist push that seems...

(CROSSTALK)

LANGONE: I think it's a disgrace.

Jeff Bezos has created jobs for a lot of people that they wouldn't have. Now, whether or not it's enough to qualify that you now get food stamps, if that is the issue, this guy has done more.

CAVUTO: Right.

LANGONE: And he's done something else, big time.

He's put pressure on guys like Home Depot to make sure we do our damndest to give our customers exactly what they want. I tell people, one of the best things that has happened to Home Depot is Amazon. They have made sure that we stay focused on offering our customers a variety of ways to shop in our stores, online, in person, a hybrid.

I think...

CAVUTO: Could you do Home Depot in this environment today?

LANGONE: You could. You could.

CAVUTO: You and Bernie Marcus coming up with it, it was a tough environment.

(CROSSTALK)

LANGONE: Well, '78 was worse.

CAVUTO: It was a pretty bad environment.

LANGONE: But there was something different.

We were able to use equity incentives for our employees. You can't do that anymore, because now options have to be expensed, which is stupid. It's dumb.

(CROSSTALK)

CAVUTO: So, in other words...

(CROSSTALK)

CAVUTO: ... get people involved, you couldn't do?

LANGONE: Look, let me tell you what.

One of the great sides of Home Depot, we have 3,000 kids in this company today, started in the parking lot pushing carts. You ready? They're multimillionaires. They're capitalists. These kids started with us at 18.
Didn't go to college. Worked like hell. Gave the customers...

CAVUTO: Young people in a recent poll, a majority said they related more to socialism than capitalism. What do you think?

LANGONE: Give them time.

Wait until they get out of college and start seeing how much the tax bite is. Trust me. They will get to my side of the equation pretty quick.

(LAUGHTER)

CAVUTO: All right, one myth thing I wanted you to put to rest or prove.

LANGONE: Go ahead.

CAVUTO: That you and Bernie Marcus, when you started Home Depot, what was remarkable, besides getting it going, was that neither of you were remotely handy.

LANGONE: Bernie wasn't. I was.

CAVUTO: Really?

LANGONE: I hung wallpaper. Let Elaine tell you. I put floors down. I wallpapered. I painted. I cut my lawn.

Jews don't like to do...

(CROSSTALK)

(LAUGHTER)

CAVUTO: But Italians do.

LANGONE: Well, we do it. That's our nature. We're gardeners.

And don't forget, we were what -- and, by the way, remember this. We all want immigrants in America. If we didn't, I wouldn't be here today. And nothing would have happened to me. But let's understand that we want to do it in an orderly process, in a way that is beneficial to the person that wants to come in and to us as a nation.

That's all.

CAVUTO: Ken Langone, good luck coming out of your shell. Seems to be working.

LANGONE: I'm working. I'm talking to that shrink all the time.

(LAUGHTER)

CAVUTO: One at a time.

My best to your lovely wife and family.

LANGONE: Thank you.

CAVUTO: But it's remarkable.

The book is, "I Love Capitalism."

His story is remarkable. Anything is possible in this country, even for someone who is not handy, to start one of the greatest chains in this area in human history.

We will have more after this.

LANGONE: God bless America.

CAVUTO: God bless America.

END

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