An Angry Democrat Speaks

Bernard L. Schwartz on life, Loral, liberalism, conservatism, too big to fail, unemployment, infrastructure, and the next President Clinton.

By Bernard Schwartz Michael Tomasky

This week, Democracy publisher and donor Bernard L. Schwartz releases his memoir Just Say Yes (Greenleaf Book Group Press), a recounting of his life, his experiences as one of America’s leading CEOs, his involvement in Democratic politics, and his thoughts on our country’s future. In conjunction with the book’s launch, we’re pleased to present a Q&A between Schwartz and Democracy editor Michael Tomasky along with two short excerpts—about his acquisition of Loral, the defense-contracting company that he turned into a $13 billion colossus, and about his relationships with Bill Clinton and other politicians.

Q & A: “I’m a Capitalist, But We Need a Regulatory Society”

Michael Tomasky: Why after all these years did you decide to write a book?

Bernard Schwartz: That’s a good question. Because throughout the years, people have encouraged me to do so, and I’ve always rejected it on the basis that, look, I’m one of a million guys who had the good fortune to do well; there’s nothing special about this.

But about two years ago, my two older children got ahold of me and said, “There was something very special about Loral. It was different from other corporations, and certainly different from corporations today. And that should be captured.” And they convinced me I should write a book. The publisher, however, told me that if I wrote that kind of book, it would be a business audience, it would be pitched to a very narrow audience. And they encouraged me to write a story of my life, which would have a much broader distribution for them, and would include the Loral story, and that’s what came out.

MT: What’s the main thing that you would like readers to take away from the book?

BS: The main thing was that we developed a culture that was very unique for companies of our size. It was very relational. It dealt with a constituency that was larger than just my public shareholders. It included the constituencies that I felt responsible for or had some debt to: my customer, my suppliers, my competitors even, certainly to my employees and executives. And we built a culture that paid attention to the interests that each of these constituencies had.

Now that differed from the then fairly uncommon but now totally prevalent transactional attitude, at brokerage houses, investment companies, banks, even oversight companies, rating agencies. They sell it to somebody else, they’re no longer concerned. That’s a very different attitude. I think that changes the aspect of responsibility, the aspect of accountability, people being responsible for their own actions, and that change I think led to the 2008 financial debacle in this country, and some of it is still in place unfortunately.

MT: Talk a little bit more about that, both in terms of the values of your business culture that you think were important and made it such a success, and where they went in the broader private world.

BS: I was fairly successful before I came to Loral. I came to Loral through the auspices of friends who said I ought to look at the defense business, which I didn’t know anything about. But I did our natural due diligence of the defense industry and found that there was something very peculiar about the defense industry. And that is that it was so dependent on one customer, the funding of that one customer depended on whether they were going to do well or not well. I saw that as an opportunity. The thing about the defense business is that you lose money while you’re making investments, developing the product, developing the technology, but you make it up in subsequent sales of long-term programs. I found that to be very attractive rather than unattractive. When I got into Loral, what I did was develop a strategy of how to take advantage of that by making acquisitions and saying to the proposed acquiree: “Look, you join us and I’m not gonna do what others have done: I’m gonna cut out your finance department cause I have a finance department, I’m gonna cut out your R&D because I have an R&D, I’m gonna cut out your employees and diminish your business, but we’ll make more money.” I was able to say to them, “I’m not gonna do that, I’m gonna expand your business. If your main customer is the Navy and my main customer is the Air Force, we can help each other sell each other’s products. If you’re doing R&D to develop a new defense mechanism for an aircraft, and I’m doing that, we can join forces and make it better and quicker.”

And that’s what we did. Some 26 acquisitions, and growing the business to 38,000 employees, and at the end I guess we were about $10 billion in size. During that time, I never closed a plant, even when it was not economic to keep the plant. But I was able to tell my potential employees and actual employees, “We’re going to continue to work with you until you become more profitable. And so you will become more valuable.” That’s what we did. And not only that, we stuck to our knitting. I stayed within the defense technology sector from beginning to almost the very end when we bought Ford Aerospace, we bought the space business as well as the defense business and because they were so close, we developed that as well. Otherwise we stuck to our knitting.

MT: What are a couple specific accomplishments of which you are proudest?

BS: The proudest thing is that we were able to put together 96 quarters of successive growth of income from the prior year’s quarter. That’s a very unique record, only broken by Jack Welch at General Electric. Twenty-four years is a long time to be able to do that, of continuous growth, of continuous expansion. That’s one thing.

The second thing is, the culture of sharing that wealth with my employees, my co-executives. We had one of the largest stock option plans in the New York Stock Exchange. I’m proud of that. A lot of people got rich with us. When I say a lot of people, I don’t mean only stockholders. I’m talking about employees. For me that was important.

A third thing was an understanding that when it was time, after 24 years, it was getting to the point where it was time for me to go from the defense business. I looked for a company that would be compatible with our culture, and our people would be taken care of, and I went to Lockheed Martin. I explain in the book I had lunch with Norm Augustine and said to him, “I want to sell you my defense business,” and he said sure right away because actually anybody would have bought Loral. And I said, “But I want to keep the space business.”

“Here is the price.” I wrote it on the back of an envelope. I said, “This is the right price for you, and it’s the right price for us, it’s a win-win.” We accomplished that mission. When I got the money, I gave most of it to the stockholders. I didn’t keep it.

I did one other thing with that transaction. There were some people, no matter what Lockheed Martin said to me, there were some people who were vulnerable, people in the finance department or legal department, marketing department. There was going to be overlap, and I identified those people at Loral and created an $18 million fund, out of my own money. I got Lockheed to kick in another couple million bucks, and we actually gave that money out to those people who were most vulnerable, and I’m proud of the fact that I did that. And I am extremely gratified that in most cases, it was very meaningful for the people who received it.

MT: So why can’t they all be like you?

BS: There’s a lot of people like me. I have to tell you that the wind was at my back from the very beginning. I came out of the Army after years of Depression, years of war. After the war, that energy, that excitement, that entrepreneurialism, all came together. And whether guys opened up delicatessen stores or supply houses or Fortune 200 companies, the wind was at our backs. We made it happen because we were lucky. It was a lucky time for us. Why aren’t there more like us? There are lots of guys like us. Like me, and I’m very proud of the fact that I was a part of their generation. I wish we could recapture some of those issues.

I’ll tell you a little story that’s in the book, it’s about my brother. My brother, when he got out of the Army, he and a friend started a business with $1,500—mostly plastic manufacturing—that became a Fortune 500 company. During the period of time this was happening and he was successful, a competitor of his burned down on a Saturday night. And my brother called him up and said—now he was out of business, this guy—my brother calls him up—now this was a competitor, a direct competitor—and he said to him, “Look, why don’t you give me your customers, I will supply them during the period it takes you to build up your new plant. At the end of which time I will give you those customers back.” And he did. And both of them prospered by the way. I don’t think that would happen today.

MT: No, it sure wouldn’t. What do you think has happened?

BS: Well, I think transactions. For one thing, if you look at the financial community, investment houses, investment banks were separated by law, under Glass-Steagall, from commercial banks. Investments houses were much more speculative, they were allowed to use their own money to make investments, but commercial banks were carefully regulated because they were using depositors’ money. Somewhere around 2002, 2003, Goldman Sachs went public. Prior to that time, every partner of an investment banking house was responsible for all the debts. They were very careful about the kinds of transactions they made. But after that happened, they had no responsibility at all.

And that changed the culture of what banking was, and they began speculating with their depositors’ money. Now that’s all right if it’s their money, but when they got into trouble in 2007, we developed something called “too big to fail”: Those who were most irresponsible were bailed out by the government. And there was no accountability. In fact, AIG, when it was taken off the market and bought by somebody else, in deep trouble, that month the management of AIG paid the executives a bonus [laughter]. I mean, that never would have happened.

MT: Let’s talk a little bit more directly about politics. You say you’re an angry Democrat. What are you angry about?

BS: I’m angry that there are give or take some 20 million people in America who do not have jobs. There’s a very large percentage, the biggest in our history, of people who are out of work for 46 weeks, or I think that’s the amount of time. I’m angry that we’re not, as a country, doing anything about that.

I’m angry that there are financial gurus, people whom I respect, some of them my friends, who are in the financial community, who have convinced Clinton and Bush and Obama that they cannot spend money if it creates a deficit, that we can’t afford any deficit no matter how much the investment is. People continue to be unemployed, we continue to have an infrastructure that is $1.7 trillion in deficit—we need desperately to have the money. And if we put the money in, we would make money rather than lose money.

I’m angry that we have a Democratic Party that doesn’t lead out in front now. President Obama has told me on numerous occasions that infrastructure is on the top of his list, that he’s going to make it happen. But I know that’s not true. It’s not going to happen. He’s not going to take the risk that Congress will shoot him down.

MT: What could he be doing that he’s not doing? He’s given lots of speeches about it, and he talks about it a lot, but the Republicans aren’t going to give him an inch.

BS: : I agree with you. But he hasn’t called the Democrats in and said, “I want you to vote for this or else you’re not going get, in your district, I’m not going to put money for a trolley car, if you don’t back my plan. This is my number one priority, you better back it.”

He doesn’t do that to Republicans. Let me tell you: If I asked you, “Who are the four or five most respected Presidents in the United States?” you would name maybe Jefferson, Washington, Lincoln, Teddy Roosevelt, FDR. Now each of these Presidents went out and spent money. They invested money. A Republican, Lincoln, built the land-grant colleges, he built the transcontinental railroad. Teddy Roosevelt built a whole system that broke the trusts. Franklin Roosevelt, the day he became President, the day after his inaugural speech, he presented a whole program to Congress, and he said, “If you don’t do this, I will do this.” We need that kind of spirit today, and we lack it.

Now, I voted for Obama, I would vote for him again. I met with him last week. I don’t have any sense that he will make a commitment to the things he says he’s in favor of. So I’m angry. Not only angry at him, I’m angry at Bob Rubin, who’s a good and decent man. I’m angry at Geithner. I’m angry at Larry Summers, who believes that we can’t afford to spent a trillion dollars to build infrastructure and put 10 million people back to work. My question is, “How come our deficit is going down, not up?” So you’re wrong about that. And second, these are investments, they’re not expenditures.

MT: With all this in mind, what is your feeling about the prospect of a Hillary Clinton presidency?

BS: I think it’s very good. I’m in favor of Hillary Clinton, very much so by the way, not that I agree with everything she says by all means, but she’s a leader who I think will be out front. I think the prospects are good for two reasons: Obama did not win the Presidency twice. In each case, the Republicans lost. I mean, they had McCain, who’s an interesting man, but he had cancer when he was running for office, with an unknown vice president. And the second time around, Obama faced an investment banker who believed in private engagement, the kind of practice I told you I think is so reprehensible. So it’s not that the Democrats won the elections, the other guys lost.

I think the Republicans have a death wish when it comes to the Presidency. I think it’s going to be a very hard time in ’14 for the Democrats. If they lose the Senate, I think we’re going to have chaos for two years, and unless the Republicans put up somebody good, I think Hillary has a very good chance, and I think she’d be a fine leader.

MT: Do you ever talk to any Republicans about these issues? Are you friends with any Republican senators or anything like that?

BS: Not one. [laughter]

MT: Was that always the case? That can’t have always been true.

BS: No, I’ve backed Republicans, I still back some Republicans. I voted for one Republican for the presidency.

MT: Reagan, correct?

BS: Reagan, yeah. We live in a system, God bless us, where the better man is the man, or woman, that you vote for. It’s not the best thing. You vote for the best of what’s running. In the past, I’ve had great respect for the Republican Party. I wish they were stronger, it makes the Democrats better. But the fact is, they believe in individuality, small government, not spending money on the part of government. I don’t believe that. I’m a good Democrat, I believe in profits, I’m a capitalist, but I would not want to live in New York City if it did not have traffic lights. We need a regulatory society. And we’re going get that more from the Democrats than the Republicans.

MT: Any final thoughts?

BS: No, except that we need to do investment, and we need to do it quickly. I’ll mention one factor. In 1997, or thereabouts, the amount of derivative paper we had in America was about $1 trillion. Four or five years later, it was $69 trillion. In 2007, we had $445 trillion of notional value of derivative paper. The banks didn’t even know how much of a liability they had on that. I mean, the amount of toxic assets that were infected the banks! The idea that a Lehman Brothers could go 50 to 1 in their leverage, and Bear Stearns 40 to 1 in leverage… But it was not a secret! Everybody knew it, it was in the papers every day.

And we sat and tolerated it, and to a very large extent we’re still tolerating some of that. I’m very optimistic about the future, I think we’re going to do well as a country. And we’re going to show it in 2014, we showed it in 2013, I think we’re going to get stronger. The world is playing by our playbook, it’s our culture they look for, it’s our hospital technology that they look for, it’s our aerospace technology they look for. It’s our music they listen to. We are a democratic society. They invest their money here, not elsewhere. I have great confidence that we as a society are going to continue to do well.

I’m only concerned about two big issues. One is our unemployment, which is at too high a level. The second is we have to make sure we have peace. And war and peace is the second really big issue. And I’m confident about both of those, by the way.

One last thing, about my philosophy generally: I really do believe in the proactive, strong government to do the things that private industry cannot or won’t do. But I don’t believe in confiscatory tax patterns. I believe in equal opportunity, every kid should have the opportunity. But they shouldn’t be guaranteed the result. There’s a difference between the two things. And I’m not for taking through taxation away from the rich, one class, and giving it to another. I think we have to have a growth policy that makes everybody grow. Maybe not equally, but everybody have a chance. And that’s a very strongly embedded value judgment on my part.


If there was one thing nagging at me, it was that for all the success I’d had in the business world, I still hadn’t run my own company. And I’d learned from watching several powerful personalities and helping them run their companies that, like them, I thrived on responsibility. I want to make it clear, however, that I was not mulling a change or casting about for a company to run when Bob Hodes called me one day and started talking about a troubled enterprise called Loral. The issue of running my own company hadn’t become an item on what people now call a bucket list. Loral was not a symptom of a midlife crisis; it was the opportunity of a lifetime.

No person would have described Loral that way on the day in the fall of 1971 that Bob first called me, however. This was a company that a lot of Wall Street analysts thought was on its way to bankruptcy. As I mentioned in Chapter 1, Loral, a manufacturer of electronic weapons detection systems of very high quality, was managing to do poorly at a time—the Vietnam War era—when defense concerns could be expected to prosper. The twenty-three-year-old company was coming off a year in which it had reported a $2 million loss; its net worth had fallen 20 percent during that time, to $9.5 million, and its stock price had dropped dramatically.

Even if it had been a healthy company, Loral was in an industry that is difficult for some investors to get excited about because it makes them think of government bureaucracy or conflict. I won’t say that Bob was desperate when he called me, but I do think he didn’t know what else to do. He was on the board of Loral, I was his friend, and he probably thought that as a complete stranger to the defense business, I might be able to look at the situation unencumbered by past history, prejudices, and presumptions.

In any case, all he asked me to do was to take a quick look at the financials and break bread with a few outsider board members who were understandably concerned about the company’s future. “Maybe,” he said, “you can make a few general recommendations.” It wasn’t a date, in other words; it was just lunch.

I spent the hour before that lunch looking over the materials Bob had sent me. I saw all the shrinking numbers and noted that after Loral had gone public in 1959, it used the cash it had raised to turn itself into the crazy-quilt conglomerate I described in Chapter 1. This was not necessarily a bad idea; the idea of corporate diversification had become popular since the end of World War II, no doubt because it did, in certain circumstances, allow the owner to spread risk. The problem for Loral was that, while it was very adept at its core business, it knew virtually nothing about other businesses it had acquired. And the fatal flaw was that it didn’t know how little it knew.

When I talked to the board members, I spoke in terms of broad strokes and first impressions. The flip side of all the problems, I pointed out, was that relatively few adjustments could lead to rapid improvements. “It seems pretty obvious to me that you should sell off these newer divisions and concentrate on what you know best,” I told the directors. I didn’t expect to hear much about Loral again, but the next day Bob Hodes called to say that the people at the lunch had been impressed with what I said about the company. They had little faith in the current management of Loral, he added, and they had asked him to call me to see if I would perhaps consider coming to the company and leading it away from the edge of the cliff it appeared to be heading toward. Could I see myself as the company president?

I thought that sounded like a perfectly horrible idea. “That’s the last thing in the world I’d want to do,” I told Bob. I don’t mean to disparage Leon Alpert, who was the chairman of the company at the time, but I didn’t see myself leaving Reliance to work for him—or anybody else. “Just think about it a while,” said Bob. “Maybe you wouldn’t have to work for Alpert. Maybe there’s a way you could take over the company.”

I did think about it, and I came up with a plan. “If I could buy 12 percent of the stock from Lorenz and Alpert but take the company over,” I told Bob, “that might interest me. But as part of this scenario, Alpert and Lorenz would have to retire, the board would also retire, and I would appoint a new board. If that could happen, I’d be willing to investigate this further.”

Bob said that sounded reasonable to him, so I began to do my due diligence. This was a responsibility I couldn’t delegate. I wanted to sit down with people from inside and outside the company and be able to hear the tone of their voice, observe their body language, and look them in the eye. Sometimes when I spoke to Loral engineers about electronic defense systems, I didn’t know what the hell they were talking about, and I realized that if I was going to proceed with this deal I would have to educate myself about the company’s core business, and quickly. But at least I knew how much I didn’t know.

One of the people I knew during this time was Tom Stanton, president at the First Jersey National Bank of New Jersey. A board member of Loral who was at that initial lunch meeting, Tom had dealt with my brother’s firm, APL, so he knew me. I told him I had some real misgivings about taking over Loral because it had been having such trouble getting bank loans owing to the fact that it was showing annual losses. Tom answered me with great assurance, and I’ll never forget what he said. “Bernard, you should do this deal. Those other banks are wrong to be denying credit to Loral. They don’t understand the company and the particular straits it’s in. You should know that there’s a lot of collateral in this company that you don’t see on the balance sheets.” He was referring to the engineering skills of the employees, the reputation for excellence enjoyed by the company’s main plant just off Bruckner Boulevard in the South Bronx, the relationships that had been built up with the customers, and other abstract but real assets. “I’m telling you, Bernard, you can turn this company around.”

As my investigations progressed, I started to see other reasons to think positively. The defense industry had several unique qualities, the most obvious one being that it had, for all practical purposes, only one customer: the US Department of Defense. Other business opportunities could develop from this primary market, but the principal driver of the industry was the Pentagon. To a lot of people who might be considering an investment in the defense sector, that would be a negative consideration, but it wasn’t to me. For one thing, though I may be liberal in my political beliefs, I’ve always had a basically positive attitude toward the defense industry. A strong military seems vital to me as a way of preserving peace. For another thing, I’ve never seen the military as some people do: as an arcane and confusing culture that doesn’t always answer to the rules of the marketplace. I’d served in the army, after all, and I’d seen a lot of smart people trying to do a good job and generally succeeding. Until the generals in charge of ordering weapons and monitoring production showed me otherwise, I decided, I would keep an open mind and assume they were as worthy as any executives in the private sector.

In 1971 when I was doing my Loral research, defense spending took a marked downturn, even though the Vietnam War was still raging and we had a Republican president, Richard Nixon, whom many still associate with the escalation of the conflict. The slowdown in weapons expenditures not only suppressed profits and expectations throughout the defense industry, it also caused a decline in market values of publicly held defense companies. But that didn’t scare me off. I was seeing things that Wall Street didn’t.

For me the key to understanding the true state of Loral was learning how Defense Department contracts worked. In those days the process started when one of the branches of the armed forces came to a company like Loral, Boeing, or Lockheed and said, for example, “We need a radar detection system for a fighter plane. Would you like to bid on the contract?” If you said yes, you were charged with coming up with a price for something that did not exist yet. To do that, you had to figure that the product would require a couple of years of research and development (R&D), and that besides that expense, the military would probably want you to absorb the first two or three years of production costs as well. The bid you made was always to some extent an educated guess, and thus a big gamble. The upside, though, was that if you got final approval, you were looking at the likelihood of a long-term, sole-source contract that would be tremendously profitable over quite a few years. In other words, if you accepted the defense industry as a different way of doing business, and not an inferior way of doing business, it could be a great place to be.


Not long ago, while I was in my office on Fifth Avenue dictating a chapter of this book, I got a call from Bill Clinton. I took it immediately, of course, but the nice thing about it was that it was not terribly important; my favorite president in the last sixty years was just keeping in touch.

“Hey, Bernard, how are you doing?” he said in his familiar Arkansas drawl. “It turns out I was at a meeting yesterday and something came up about infrastructure legislation, and the speaker mentioned your name in connection with it. People were reacting with a lot of enthusiasm and excitement. I thought you’d like to know that, and I made a mental note to give you a call.” He paused, and then his tone became less breezy. “Tell me, how do you think things are going on the infrastructure front?”

Bill Clinton knows well the history of my involvement with what used to be called public works. One reason the issue is so dear to me, I think, is that I have always been more interested in the manufacturing economy than the Wall Street economy. I like the idea of conceiving, designing, and making things, rather than, say, buying and selling derivatives. But the real reason I push for infrastructure reform is that America desperately needs it.

In an age when more than 20 million people are unemployed or underemployed and our nation struggles with dangerously outmoded road, rail, and water systems—not to mention a seriously inadequate electric grid and aging, hard-to-secure ports—putting people to work rebuilding our nation is an obvious, efficient, and even elegant solution to two of America’s most urgent problems: unemployment and structural renewal. Yes, federal, state, and local governments are strapped for cash. But I’m embarrassed by the apparent denial about this obvious problem. Proper legislation could result in both private companies and the federal government hiring people to create what’s needed, fix what’s broken, and bring the country into the twenty-first century.

If you go to Hong Kong, South Korea, or Europe, you’ll find broadband speeds and air traffic control systems that are generations ahead of what we’ve got here. If you fly from the airport in Beijing to JFK in New York, you could be excused for thinking you are going from a first-world nation to a third-world one. It’s a shameful situation, and it has only gotten worse since I began talking about it in earnest in the late 1990s.

I am a lifelong Democrat—an angry Democrat, sometimes, but a Democrat nevertheless. I don’t hate Republicans or think they are crazy. What they believe in—smaller national government, limited governmental participation in peoples’ lives, smaller budgets and expenditures, a lack of restrictions on industry, a strong defense but limited international involvement—are all reasonable objectives. They just don’t happen to be mine. I believe in individual freedom, equal opportunity, the dignity of the individual, the social contract and government responsibilityfor investments in personal development, and, yes, the national infrastructure—ideals that are better served, in my experience, by the Democratic Party.

Believe it or not, I have on occasion voted for Republican candidates. I even voted against a Democratic presidential candidate once when I went for Ronald Reagan over Jimmy Carter. I didn’t share Reagan’s philosophy of government, but he did use his office to project hope for America, and I was attracted to that. The way our system works, we don’t vote for the perfect candidate but for the better of two choices.

Mind you, I was not a stranger in the Carter White House. On one occasion I was one of six business and political leaders, Republicans and Democrats, whom he invited to the Oval Office to give him advice on whether the federal government should advance loans to Chrysler Corporation. At the start of the meeting, which included Bob Strauss, the former chairman of the Democratic Party and then a special envoy to the Middle East, President Carter took his chair from behind his desk and brought it around to the front so we could sit in a circle, as equals. I thought that was a gracious thing to do.

As it turned out, all the people at the meeting except the president and I were against extending help to Chrysler. I spoke up strongly in favor of what I called a foundation stone of the American economy, not just an important automobile company. In the end with Carter’s support, Chrysler got the help. But what was interesting, I thought, was that what wound up being advanced to Chrysler was not a loan, per se, but a loan guarantee for which the government could charge an upfront fee. Ultimately, the company recovered on its own and never called upon the guarantee—and the government nevertheless made a substantial profit on the fee.

Some people have wondered how I can reconcile my Democratic beliefs with building and running a Fortune 200 company. How can I be both a progressive and a capitalist? There really is no conflict. I’m all for capitalism, but just as I would not want to live in a New York City that had no traffic lights and stop signs, I would not want to live in an America where capitalism went unregulated. I think it’s part of the federal government’s responsibility to oversee economic growth and direction; to move in and spend money when it’s necessary to provide balance or to stimulate growth; to make the winners pay their fair share of the tax burden; and to give the losers the opportunity to get back on their feet, so the system can keep going and provide opportunities for people in its imperfect but ultimately reliable way. If the ultimate goal is to guarantee equal opportunity (but not equal results) then I’m all for big government, and I’m not ashamed to say it.

When I was running Loral, a major defense contractor, I would occasionally run into people who, because I am a Democrat, treated me like I had a communicable disease. I occasionally got some static, too, from shareholders who didn’t understand how I, one of the few Democrats in the industry, could actively work for presidential and congressional candidates who were openly against increased defense spending. Shouldn’t those people be my avowed enemies? It was a fair question to ask since Loral was a public corporation, but my response was polite and always the same: “If you don’t like it, you are free to sell your stock. We are not the only company in the defense industry. This is who I am, and ownership of our stock does not give you the right to alter my basic beliefs.”
I like politics: the intellectual sparring and all the old-fashioned hoopla that goes with it. I have been attending the Democratic National Convention for some time, and both the nature of conventions and my participation in them have changed over the years.

On many occasions Democratic conventions have had a significant impact on our political results. The demonstrations that took place in support of various candidates, some of them taking as long as an hour, actually affected the outcome, and the convention often determined the party platform that expressed the visions and expectations of the Democratic Party. Over the years, however, the practice was changed to a primary system that chooses the candidate long before the convention; even discussions with respect to party platform take place before that event.

I believe this is unfortunate. The primary system in the United States is broken. Often, primary delegates are chosen by a minimum of elections or caucuses, and very often only the most extreme positions of each party choose convention delegates. This results in an overwhelming majority of incumbents being reelected, with some new candidates selected by the most extreme ideological philosophy. This is not a good system.

My first convention experience took place in 1947, while I was still in college, when I was invited to the Democratic National Convention to support Henry Wallace as a presidential candidate. I went there innocent, enthusiastic, and excited, but I came away informed, disappointed, and wiser. That was the convention that was taken over by a political crowd, dominated by a very extreme, leftist position. There was no democratic mechanism to express the viewpoints of the delegates; it was completely dominated by the convention organizers. I came away devoted to the Democratic Party and to Harry Truman as a candidate.

My subsequent experiences at these conventions, however, reinstated in me a belief in the Democratic philosophy. The demonstrations, flagwaving, shouts of approval and condemnation, partying till the wee hours of the morning, brushing shoulders with all types, from delegates to superstars—this was exciting stuff.
I try to enjoy the political process as much as I can. Irene and I have been throwing gala election-night parties since 1968, when Richard Nixon beat Hubert Humphrey. We always have a particular candidate whom we are personally pulling for, of course, but the purpose of the parties has always been to celebrate the American democratic process and make the point that the election or reelection of a president is a cause to rejoice and to give thanks—a nonpartisan salute to the way our country works.

Bernard Schwartz is the chairman and CEO of BLS Investments and the publisher of Democracy.

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Michael Tomasky is the editor of Democracy: A Journal of Ideas and a special correspondent for The Daily Beast.

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