With Eleanor Randolph, columnist, editorial writer, and author of The Many Lives of Michael Bloomberg
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This week, Steve spoke with Eleanor Randolph, who has covered national politics in columns for a number of newspapers, including The Washington Post and The Los Angeles Times. Eleanor, who is also part of the editorial team at The New York Times, recently wrote a book exploring the complex life of Michael Bloomberg. Steve invited Eleanor to recap the various stages of Bloomberg’s life, including both his business and political exploits.
The Early Days Of Michael Bloomberg
There’s a story from Michael’s early years that almost embodies his style and his approach to life. When he was young, his parents tried to move the family into an Irish neighborhood in New York. It was an idyllic, 1950s sitcom kind of neighborhood, but there were no Jews allowed at the time. Michael’s first lesson in “making things work” came from his mother, a strong and powerful woman, who decided that this Irish neighborhood was where they, a Jewish family, needed to be. In order to get in, the Bloomberg’s Irish lawyer bought a house and then sold it to the Bloombergs. The lesson Michael learned? If Plan A won’t work, find a Plan B.
Michael was incredibly smart but wasn’t a great student in high school. He got a job in a little shop where the engineer technician saw how brilliant Michael was and recommended that he apply to Johns Hopkins. He ended up doing very well there, majoring in engineering. After his father passed during his junior year, he received support and guidance from the staff at the university who fostered his ambition to do more and to push himself harder.
These experiences laid the foundation for the man that Michael Bloomberg would become.
A Pivotal Career Shift
After Johns Hopkins, Michael received his MBA from Harvard. Upon graduating, he joined the investment banking firm of Salomon Brothers where he did well working in trades. But Michael always had a bit of an ego. He ended up making enemies and was bounced from the trading desk to working with the computers, which, at the time, was largely viewed as a woman’s job.
When Salomon Brothers was sold, he was not asked to join the new company, so he was effectively fired. For most people, this would be a massive blow. But Michael’s time spent working with computers—plus the $10 million severance package he received—put him on a life-defining path.
Michael corralled three friends he’d made at Salomon Brothers who understood and knew how to work with computers, and together they began developing “the Bloomberg Machine.” His ingenious idea was to create a special computer program for traders on Wall Street. His first pass at getting his creation in the door came when Merrill Lynch gave his machine a shot. After working out some kinks, Michael’s machine proved itself very beneficial for Merrill Lynch and, therefore, very beneficial for Michael.
Michael’s Bloomberg Terminal revolutionized trading and has become an institutional part of daily business for traders.
Bloomberg As A Boss
Michael is well-known for his polarizing management style: people love it or hate it. The key element to his style is that it’s high energy and fast-paced. He needs to be moving, working, doing constantly, and he demands that same kind of work ethic from his employees. While this makes him productive and efficient, it can also be overwhelming.
His tip to others, specifically those who run their own businesses, is to hire the best of the best. One of his most noteworthy nuggets involves the types of workers you should employ and, more broadly, the types of people you should surround yourself with. Michael even told Donald Trump, shortly after he won the 2016 election, to hire people even smarter than himself and then take their advice.
The Mayor Of New York
Michael may best be recognized as the former mayor of New York. A daunting task for anyone, he sat for three terms, though there was a healthy amount of controversy. Still, his ability to run a city of 8 million people, with 50 governmental departments and more than 300,000 employees reveals that every stage of his life equipped him with the skills, mindset, and attitude necessary to accomplish such a feat.
There were some blatant failures, including his war on salt and sugar, but overall his mayoral career was successful. The bottom line is that he took a stand on issues that mattered to him and worked to push the city in what he believed to be a healthier, more positive direction.
Want to get the rest of Michael Bloomberg’s life story? Find Eleanor’s book here!
Disclosure: The opinions expressed are those of the interviewee and not necessarily of the radio show. Interviewee is not a representative of the radio show. Investing involves risk and investors should carefully consider their own investment objectives and never rely on any single chart, graph or marketing piece to make decisions. Content provided is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered tax, legal, investment advice. Please contact your tax, legal, financial professional with questions about your specific needs and circumstances. The information contained herein was obtained from sources believed to be reliable, however their accuracy and completeness cannot be guaranteed. All data are driven from publicly available information and has not been independently verified by the radio show.
Steve Pomeranz: Michael Bloomberg has been a man I’ve been fascinated with for many years. Working in the investment business for major Wall Street firms for the first 15 years of my career, I was witness to the changes to my industry brought on by the Bloomberg terminal. Now, while I was considered a retail broker, meaning that I was working with individuals, I was constantly in touch with the bond desk or the fixed-income desks as they’re really called, which helped me choose bonds for my clients. I noticed early on how excited and more helpful these traders with their Bloomberg terminals by their side could be. And I took notice. Fast forward to last month when I became aware of a new book on Mr. Bloomberg, and we contacted the author and asked her to come on the program. Of course, all this was settled before Bloomberg’s announcement to participate in the Alabama Democratic primary.
So what I thought would be a segment about his most interesting career added a new volatile political element. So now I strictly avoid politics on this show. I leave that to others. But considering the latest announcement and the fact that he was mayor of New York for three terms, we will delve into that side of things. So all that being said, I’m very happy to introduce the author of The Many Lives of Michael Bloomberg, Eleanor Randolph. Eleanor has covered national politics and the media for the Washington Post, the Los Angeles Times and other newspapers. She was also a member of the New York Times editorial staff since 1998 focusing on politics, media and Russia. Eleanor, welcome to the show.
Eleanor Randolph: Well, thank you for having me.
Steve Pomeranz: So when you were researching this book, what was your access to Michael Bloomberg? And how long had you been following him while working as a journalist?
Eleanor Randolph: Well, I was on the editorial board of the Times and I was supposed to cover city politics. And so in 2001, this billionaire decided he wanted to run for mayor and the editorial board of the Times, including myself, we supported his opponent, this guy named Mark Green. And just thought there’s no way this guy is going to be a mayor of New York City. And in fact, I think about that, he was 40 points down when he sort of got into the race.
And I think about that now when we’re all sort of saying there’s no way that Michael Bloomberg, who decided at the last minute last week that he was going to at least have the option to get in the Democratic primary that he registered in Alabama and Arkansas and he’s going through the stations of the presidential process. And I thought about that, it doesn’t make sense to me that he could get the nomination, but who am I? I’m the one who said he couldn’t be elected mayor. Anyway, I covered him starting then in 2001 and had plenty of access and then decided to write the book in 2013 and it took me a while as you can tell. And so I had plenty of access to him, to his people, especially to his people in the early days on Wall Street and at the company.
Steve Pomeranz: Well, also he would refer people to you. I think the mayor of London at the time who is now a famous person, Boris Johnson.
Eleanor Randolph: One Boris Johnson.
Steve Pomeranz: Yeah, I know.
Eleanor Randolph: You know what Boris Johnson told me, he said … I said to Boris Johnson, I said, I was just baiting him, so forgive me. But I said, “I heard a Bloomberg’s not very funny.” He said, “What are you talking about? He said he gave a speech here in Great Britain and he was so funny that I was out-funnied by, I’m supposed to be the funny guy and I was out-funnied by Michael Bloomberg.” So anyway, Johnson said that Bloomberg was one of the great mayors in his era.
Steve Pomeranz: Well, we’re going to get to that later on. Let’s start with the earliest days. One story in your book that stuck with me was the story about how his parents had tried to move into an Irish neighborhood and there were no Jews allowed. Why don’t you tell the story?
Eleanor Randolph: Well, I mean, you should see this neighborhood. It is just this perfect little suburban neighborhood looks like a TV sitcom practically from the old 50s and it still looks that way. Anyway, his mother, who was a very, very striking and powerful woman, decided that she wanted to move the family into this neighborhood, but they said there was a covenant that said no Jews were allowed. So what happened was that their Irish lawyer bought the house and then the Bloomberg’s bought it from the Irish lawyer. And so that was a lesson that they talk about, the Bloomberg family and certainly Michael Bloomberg, they talk about it as the example of what you do if you can’t go this way, you go that way. If there’s no Plan A, you do Plan B.
Steve Pomeranz: Yeah. Yeah. So this idea of the Plan B is a big characteristic of Bloomberg style, right?
Eleanor Randolph: It’s very much so. Yeah.
Steve Pomeranz: All right, so what kind of student was he?
Eleanor Randolph: Well, he was sort of even starting way back then, he was a smart ass in a high school and he was not a very good student, but he was super smart and he started working in this little shop and the engineering sort of technician person there realized how smart he was and told him to apply to Johns Hopkins. So he went to Johns Hopkins. He was going to major in … He ended up majoring in engineering, which turned out to be very important especially when he was creating this Bloomberg machine that you liked so much. Anyway, he did really well in Johns Hopkins. After his father died in his junior year, he has always said that Johns Hopkins really, they made the big difference in his life turning, instead of being a small-time accountant or something like that, this gave him the ambition or helped nurture the ambition to be something more than that. And he’s always said that in these speeches, he says Johns Hopkins should erect three statues, one to Johns Hopkins, one to him and one to the admissions director.
Steve Pomeranz: Who had either the stupidity or the foresight to allow him to come in. So he went to Harvard after that. He got his MBA at Harvard and then he joined Solomon Brothers, right?
Eleanor Randolph: That’s right. In ’66 he joined Solomon Brothers, he talks about going through the stations at Solomon Brothers and, at first, he was in the bank vault counting documents that had to go to the bank at the end of the day, that sort of thing.
Steve Pomeranz: Well, the system back then was really, really terrible.
Eleanor Randolph: That’s right.
Steve Pomeranz: And they would count each piece of paper and then they would take it across the street or down the street and have to deliver it at the end of every day. I mean, it’s really hard to imagine a business being done in that fashion.
Eleanor Randolph: I know you almost go back to the semaphores.
Steve Pomeranz: Yeah.
Eleanor Randolph: From the earlier time. But, you know what was interesting about that, I mean, he was quickly promoted to sharpening pencils upstairs in, you know-
Steve Pomeranz: Okay, he got upstairs, at least.
Eleanor Randolph: He did very well at Solomon Brothers until he made an enemy. And then as you know, they bounced him upstairs and made him in charge of computers.
Steve Pomeranz: Yeah. So that was at Solomon Brothers, I mean, the money, the prestige was all in trading.
Eleanor Randolph: That’s right.
Steve Pomeranz: And for you to be moved out of that department and upstairs into the computer department was a huge kind of humiliating demotion.
Eleanor Randolph: It was.
Steve Pomeranz: Yes.
Eleanor Randolph: I always say it was like going from being the quarterback to the water boy instantly.
Steve Pomeranz: Yeah, exactly. Exactly.
Eleanor Randolph: It was a humiliation. At that time computers were considered, there were computers, the beginnings of computers in that era, but it was considered women’s work, you know?
Steve Pomeranz: Yeah.
And also, so then Solomon was sold and he was not asked to join the new company. So, in effect, he was fired from Solomon Brothers, which I would think would have been another devastating blow to kind of a person and kind of a normal person who might not bounce back from something like that. But as it turned out, his working in computers plus the fact that they gave him a severance package of 10 million bucks, which doesn’t hurt. And he had made some friends there, he decided to try his hand at bringing computers to Wall Street. You want to take it from there? A little.
Eleanor Randolph: Yeah, I mean if you, if you back up just one minute there, those old guys that were pushing the carts with the paper all along the streets of Wall Street every night, paper finally overwhelmed Wall Street. And so Bloomberg was there watching that and seeing these little sorts of clunky little computers that were coming along. And he started telling John Goodfriend at Solomon Brothers, we need to get more into computers. We need to use computers to help us with our trading. And they just thought he was a pain.
Steve Pomeranz: Well, he was kind of a pain, wasn’t he?
Eleanor Randolph: Yeah, I was trying to think of a nice way to say it…
Steve Pomeranz: I mean he was very kind of a pain. I mean he was one of these guys that kind of probably just didn’t shut up and wanted to be in control of everything. And it’s hard to work with people like that and not all of them turn out to be as successful as Bloomberg did. But it seems to be a characteristic to some degree.
Eleanor Randolph: Well, that’s right. I mean, he was born to be in charge because he kept telling him how they should run things. So when they bounced him out, and the truth was he was enough devastated by that that he mentions it all the time. Sometimes in a speech, he’ll mention it and by then he’s a billionaire with the $30 to $50 billion or something and so it gets a good laugh. But the truth is it was quite a dent, but he very quickly decided that what he had … He said he went home and made sure he didn’t have any documents or anything from Solomon Brothers. But what he had in his head was really important. And he hired three guys from Solomon Brothers who are now members of what they call the three-comma club, billionaires, and they knew about computers and they knew what traders needed and so they started creating this machine. And that story is a great Bloomberg story.
Steve Pomeranz: Well, I know also that he worked with Merrill Lynch at the time because I was at Merrill Lynch during those years.
Eleanor Randolph: Oh
Steve Pomeranz: Again, I was in the retail, I was in the hinterland. Okay, I worked in Boca—we’re not talking Wall Street, but you know what’s going on. And I remember later on Bloomberg going to Merrill saying, “Listen, we’ve got this system and I want to expand it to other companies in Wall Street, I think this is something that the street should have, not just Merrill Lynch.” And Merrill Lynch said, “Okay,” and I often wondered until I read your book how he got them to do that. And the answer was that they had actually 30% of his company.
Eleanor Randolph: Right? They were making money as he made. That’s right-
Steve Pomeranz: Exactly. So they saw that, go ahead.
Eleanor Randolph: Merrill Lynch gets a lot of credit for actually giving him, you know, starting him out. I mean that first computer was, it was called Market Master and they eventually changed the name because it sounded like a kitchen appliance. But the truth is it kind of looked like a kitchen appliance to us. If you look at it today, it’s so amazing that those early computers could do what they wanted them to do. But Merrill gave him the chance to work it out, to work out the details, to kind of figure out how it would work. And then Merrill benefited when he expanded, you’re right.
Steve Pomeranz: So later on, he bought back his share or Merrill’s share during the crisis when Merrill needed money desperately. But I think he paid them over $4 billion. Some very high number like that.
Eleanor Randolph: Well, that’s what we think. I mean that was the estimate. They’re very closed about that kind of thing over there at that private company, Bloomberg LP. But that’s what we think that they paid Merrill.
Steve Pomeranz: All right, so you qualified that number. But the bottom line was, as I read it and you didn’t say this, but I read it, that he comes in at a time when Merrill is desperate for money because of the crisis. And then he makes his deal then. And I think that’s the kind of an idea of the shrewdness of understanding what his business was worth and picking the time, the right time to sell or rather, in this case, to buy his shares from Merrill Lynch. All right, let’s move on a little bit. So we kind of got a good sense of his early years about the development of this machine. Now this machine was revolutionary. It wasn’t just a machine that allowed trades to be done. Now I never had a Bloomberg terminal because I never really needed one. And they were expensive. They were over $20,000 a year. So that was-
Eleanor Randolph: They still are expensive.
Steve Pomeranz: Yeah, they’re still expensive. So that’s really for something for trading desks and so on are, they’re kind of the institutional part of the business or real traders. And that was not me. But the bottom line was they had all kinds of information right at your fingertips that bond investors really needed, plus graphs that could compare two things very quickly and explanations of things, definitions. And all of this stuff that made your life easier. So this was not just a kind of an administrative system to allow them to do better trades. This was a true intellectual property kind of innovation on Wall Street. And I think that’s one of the reasons that it was so popular. His management style, I want to move on here. His management style is what? I know he works very, very hard, but what kind of a boss is he actually?
Eleanor Randolph: Well, I mean if you talk about…he has people either love working there or they just can’t take it because it is, it is high energy. He talks about getting in at 7:00 AM but when he can’t stand it, he’ll get in at 6:30 AM that’s the kind of guy he is and he chafes at an empty hour in his calendar, and he just works like that. He worked like that in the city of New York, which we now have a mayor who doesn’t work as hard and the difference is really noticeable here, but the people who work for in the city, most of the people I talked to who worked here in the city, absolutely loved working for him. Now he made a couple of mistakes in hiring, but what he said was the first thing you do, if you’re going to take over anything, like when he became mayor of New York, the first thing you do is you find the best people who can work for you.
And so Trump called him right after he was elected. And Bloomberg says that what he told him is that, “hire the best people that can work for you. Hire people who are smarter than you are and take their advice.” I’m not sure that the president has followed Bloomberg’s advice to a T here, but that’s kind of the place he started always. And I don’t think you can overemphasize that, the people around him that he trusted and that he asked them, especially in the City, which is very interesting now, sort of as we look at whether or not he’s going to try to be president, but in the City, he wanted them to be inventive and even if it caused him problems with the tabloid newspapers.
Steve Pomeranz: My guest is Eleanor Randolph. She’s the author of The Many Lives of Michael Bloomberg and that’s what we’re talking about today. So let’s go to his time as mayor. So he controversially had a third term, but he had three terms as mayor. And managing New York City is near impossible, I would think, eight and a half million people. You actually had the opportunity to go through the New York City municipal archives and saw in detail how one person could manage that. Tell us a little bit about that.
Eleanor Randolph: Well, look you’re right. It’s eight and a half million people. The city government itself is 50 departments and 300,000 employees. So you can see you really need to have to find the best possible commissioners to run things. And what I found interesting is how he used management systems to propose programs, to list where you were every single week and what he would do often was announce the deadline when he announced the program, which puts pressure on the entire staff to get things done. And so he tried a lot, as I said, a lot of different programs.
Some of them just didn’t work and politicians don’t do that, they don’t try things that don’t work, that might not work. And he often said that, like a scientist, if a scientist tries something, it doesn’t work. That’s great because you don’t ever have to try that again. You can try something different.
Steve Pomeranz: So all in all-
Eleanor Randolph: Anyway, that’s just a part.
Steve Pomeranz: Yeah, no, I understand that. And all in all, his time as mayor was I would say very successful. However, he did have some blatant failures. Well, first of all, some controversial things like the fight against cigarettes, salt, sugar, the nanny mayor title, which I remember when he was doing that, especially with the sugar and I didn’t know about the salt, but the sugar it’s like, I was like, “that’s too far.” You know, enough is enough with that. So, but that’s kind of stuck with him, hasn’t it?
Eleanor Randolph: It has. You know, I think of him as the public health mayor and he cared. He started caring about public health earlier, in the early eighties, but one of the things he said was, “You could give money to Johns Hopkins for the school of public health, for example, but if you run a city of eight and a half million people and you cut back on smoking, you’ve made quite a difference in the lives of an awful lot of people.” And they cut back on smoking. He often said that, “if you’re a New Yorker, just before you die, you got three extra years.” And so because they cut back on this oil that polluted the air.
Steve Pomeranz: The trans-fat.
Eleanor Randolph: Pardon?
Steve Pomeranz: The trans-fat oil.
Eleanor Randolph: Trans-fats. Yes. And they gave grades to restaurants and that sort of cut back on salmonella poisoning and things like that. So there were a lot of lists of things like that that he cared about. And so the commissioners could come to him and they’d say what they wanted to do and he’d say, “Will that save lives.” And if they said yes, he’d say, “Okay, try it, go see how it’ll work.” That’s what happened with the Big Gulp, the 16-ounce Coke.
Steve Pomeranz: The ounces, yeah, yeah. Now people could buy two, eight ounces, but that wasn’t really the point.
Eleanor Randolph: That’s right.
Steve Pomeranz: Right, right. Well, we are out of time, Eleanor, I want to spend another half hour with you, but let me at least drive people to the book. It’s a very readable book. Very interesting about this man. The book is The Many Lives of Michael Bloomberg. My guest has been an Eleanor Randolph and, Eleanor, thank you for taking your time to discuss your wonderful book with me. Thank you.
Eleanor Randolph: Thank you. Thanks for having me
Steve Pomeranz: And folks, if you have any questions or comments, don’t forget to go to StevePomeranz.com we love to hear your questions and your comments as well. And also you can hear this again on your podcast too, over 640,000 downloads have occurred. Just go to your podcast app, put in the Steve Pomeranz show, or just say, “Alexa, play the Steve Pomeranz show.” How cool is that? Eleanor, thank you so much once again.
Eleanor Randolph: Thank you.