Republican presidential candidate Donald Trump points to the crowd during the evening session on the fourth day of the Republican National Convention in Cleveland.
Photograph by Alex Wong — Getty Images
By Shawn Tully
August 10, 2016

The Trump campaign needs more policy and less ‘Crooked Hillary.’

That’s according to Tom Barrack, an advisor to Donald Trump who was named last week as part of the candidate’s economic team.

Barrack is hugely successful real estate investor, as the founder and executive-chairman of Los Angeles-based Colony Capital. And he has known Trump for years, and seen him in action. In 1988, Barrack representing his boss, Texas tycoon Robert Bass, sold Manhattan’s Plaza Hotel to the New York developer. Since then, they’ve partnered on a number of projects, including the still-in-process transformation of the historic Old Post Office and Clock Tower in Washington, D.C., into a luxury hotel.

Barrack recently launched the Trump super-pac Rebuilding America Now. Trump awarded Barrack a prime speaking spot on the final evening of the Republican convention. On August 5, Trump unveiled his economic team, and named Barrack to the roster.

In a phone interview with Fortune, Barrack stressed that voters should look beyond Trump’s negative comments and focus on his role as a “disruptor” who can lift America from what he characterizes as the economic malaise of the last decade. But he acknowledges Trump needs to make some changes as well. On Tuesday, Trump mades a comment about the second amendment that some thought seemed to suggest that Trump was advocating violence against Clinton or potential judicial nominees. (Fortune spoke with Barrack before those comments became public.)

Barrack says he’s repeatedly told Trump to stop hurling insults at Clinton and others, and acknowledge the Democratic nominee is an accomplished and worthy candidate, if not the right pick for president. “I’ve told Donald, ‘You’re better than that,'” Barrack says. “What’s the point in attacking anybody?”

Trump, Barrack says, “hates the word ‘pivot.” Barrack says Trump has told Barrack that if he’d been diplomatic, “I’d still be on The Apprentice.” Still, Barrack—who’s as soothing as Trump is obstreperous, and whose clean-shaven pate contrasts with Trump’s Rococo coif—predicts his old friend will prove a less volatile and more substantive figure in the months to come.

The bigger problem, Barrack says, is that neither party is addressing the looming budget crisis. In interview with Fortune, Barrack argues that although fellow business leaders view Trump as “erratic,” he’s just the insurgent to break all the rules and “demand that the government spends less and does more.”

In fact, Barrack says Trump’s wild unpredictability is actually a big advantage, not the big weakness as many say, if the Republican nominee were elected president. “The perception of erratic behavior is an incredible tool, and predictability is the enemy,” he says. “Donald will walk into a room and say it’s all over, we’ll start doing smart things for ourselves.”

Fortune: Why did you choose to join Trump’s campaign? You’ve never been particularly political before.

Barrack: I haven’t been political, and this wasn’t a political choice. Donald has been a friend and a business partner for almost 40 years. Being a participant in international finance and private equity has given me the gift of sitting on boards, and advising and helping run companies all over the world.

The way our system has worked only the people who are professional politicians actually engage in the political arena. The last president to make payroll in a big way may have been Herbert Hoover. The president has to exert influence and lead, but he can’t change the staff in the White House [kitchen] without consent.

To me, it’s not about being negative regarding the people running the system. The president today is a very accomplished man, and Hillary Clinton is a very accomplished woman. It’s about the status quo, and whether you like what’s happened over the last eight to ten years. If you want disruption, you need someone who will chip away at the burdens holding back the economy. And you need a new leader. That leader will need to do it in baby steps.

The people in the bleachers, making the business decisions, traditionally didn’t want to play in the arena. They sent checks instead. I said that at this point in my life, I’d bring a practical perspective on how we can turn this aircraft carrier around. I’ve been a warrior on the field. It takes people with very thick skins like Trump who want to go through this election process, a process that most business people don’t want to go through.

Donald is Donald. But it’s not about negative comments. It’s about the status quo vs the disruption that he brings.

You’re known as an advocate of free markets. But Trump’s positions are a highly unusual blend of populist and traditional republican positions. Does the combination hold together as a unified, coherent platform?

My answer is that it all hangs together. The policy we’ve utilized in post-World War II trade has been driven by foreign policy. Bretton Woods, the Marshall Plan, the World Trade Organization, the IMF—the U.S. was the driving force in all of them. Capitalism was regarded as in decline. Communism was spreading, but America was always at the center of policy making because it’s the world’s largest consumer.

It was a proliferation of foreign policy to ensure that capitalism stayed in place around the world. We never anticipated currency manipulation and central bank intervention on [the current] scale. As a result, we don’t have free trade or free anything. World economies are on life support. They’re holding $100 trillion in debt unrestrained by any gold or silver standard. Emerging market governments are giving the appearance to their middle classes that they’re getting an unfair deal.

For an investment banker at Goldman Sachs, globalization means that financial products can be sold all over the world, and deals can be done across borders. If someone’s been working at an air conditioner factory in Indiana for 30 years, and the factory is moved to Mexico, they don’t care about the case made for globalization. Their job is gone.

Getting to a level playing field is almost impossible. We’re seeing an epic level of social imbalance and income inequality. I’m a Republican and a capitalist, but I began to feel like a populist in 2007. Since then, everything has benefited the 1%, and the poor are getting poorer.

What would you advise Trump to do?

The U.S. has the power in the world economy. But at some point we need a punctuation stop. We need to worry about ourselves first and if we do that, we can take care of the rest of the world. We need a coherent foreign policy to direct our immigration policy, and we don’t have it. In Egypt, Iran, Libya, and other Middle Eastern countries, we’ve supported or tolerated regimes, then taken them down.

We need all of our good allies—good friends who are Muslim. Along with Israel, Saudi Arabia has been our greatest single ally in the Middle East since the 1950s. Now we have Islamic terrorism, and they oppose it 100%. The rise of a caliphate without borders is a phenomenon going back to the Ottoman Empire. We have to find the solution, and it has to happen with our friends. Just give us a clear foreign policy.

Let’s reassess and get a foreign policy that’s transparent and that will dictate immigration policy. Mexico is equally unhappy with the immigration situation. They send workers to us, and massive amounts of cash and guns are going back across the border. Mexico is a better trading partner than China. We’re exporting intellectual property to China and importing cheap labor. But we can’t solve the problems on both sides with Mexico with the same 1000 diplomats and changing footnote 1573 to NAFTA. The status quo will never change itself. You need a full stop. We have the power, and we never use it.

But are you concerned that Trump’s demands on trade, especially with regard to China could ignite a trade war?

Not at all. The irony is that Donald is not a zealot. He’ll get a deal done, and you need to do it from the standpoint of unpredictability. All of our counterparts need us more than we need them. His unpredictability will get them to the table, and with new advisers, we’ll get things done.

He’s so unpredictable that international officials are reaching out. They’re saying, “I need a channel into Trump, and he sounds like he’s pretty tough.” He’s not an idiot, and Congress won’t let him start trade war anyway. The perception of erratic behavior is an incredible tool, and predictability is the enemy. We’ve delegated our power to third party tribunals to forge our trade policy. Donald will walk into a room and say it’s all over, we’ll start doing smart things for ourselves. We have diplomats negotiating for us. They’re foreign service oriented people, not people interested in creating more jobs or better wages. They’re not looking at economic metrics.

As someone who serves on boards and works with many CEOs, how do you view the impact lowering the corporate tax rate to 15% would have?

It will bring in a lot more investment. U.S. companies are shopping for the best tax deals around the world. Ireland has benefited tremendously form its low corporate tax rate. Along the same lines, Donald advocates amnesty to allow companies to bring back earnings parked abroad at lower rates. Wall Street and corporations will rally around those ideas. The philosophy makes sense, but it’s hard when you have to go through Congress.

Shortly after the next president takes office, deficits are expected to balloon to well over $1 trillion a year. The candidates aren’t talking much about the issue. What’s your take?

The deficit issue is a tremendous concern with no simple answer. We’re digging ourselves into a deep ditch. It’s a massive crisis. Debt-to-GDP looks okay now, but it’s an illusion. When you’re printing money and every other country is printing money and lowering the value of their currency, it’s frightening. Change has to happen in baby steps. The system has become so overwhelmingly weighty. So far, the policy has been to continue to do things that will increase future deficits. This is a terrible dilemma.

Americans are prisoners in a prison we built. Very few people in the business world are big beneficiaries of entitlements. They say, I don’t use public schools. I have private healthcare and don’t care about the Department of Commerce or the Department of Energy. But they pay taxes every year, and they get no accountability on how the money is being spent.

If the U.S. were a company, the first thing you’d do as CEO is demand an audit. Where is the money going? The view among business people is that Donald is erratic. They don’t buy into him 100% because of it. He’s brusque and they want him to pivot. At the end of the day, he’ll take it down to the knees, and demand that the government spends less and does more. It’s like controlling a household budget. I know that it will get better if we all start questioning that spending. The great thing about Trump entering that arena is he is triggering this debate.

There is view out there that Trump may not really want to be president. What’s you impression as one of his closest advisers?

No one knows someone’s heartfelt intentions, but it’s 1000% yes, he wants to win. The reason why people are doubting that is that if he were logical, he’d be listening more to the Tom Barracks of the world, and be easier, kinder, more diplomatic, and more politically correct. He says, “If I’d done that I’d still be on The Apprentice.”

He saw something none of us saw, a rawness in Americans that gave him a podium. Why hasn’t he pivoted? He hates that word. If he just wanted to win, he should go on vacation. He’s been engaged in a battle of negatives, and the electorate is exhausted from it. The press says he’s not serious because he doesn’t pivot. But he sees something that most people don’t see. He’s committed to this. This is a guy who already has money and celebrity.

He’s in for real, pedal to the floor, but in a different way from legacy professional politicians. He’s his own person with a tremendous team around him. He’s very smart and financially attuned. He’s a fanatic on details. His advisors keep saying, what’s the point in attacking anybody? You don’t need to take a shot. Don’t fight these peripheral battles.

The rationale for him is the rationale of unfairness that takes him beyond political correctness to respond. You’ll see a much more substantive side along with the other side going forward. He doesn’t like it when I say on Hillary Clinton, there’s nothing to be negative about.

She’s a former two-term senator and Secretary of State. You don’t need to go there. You’re better than that. You bring a set of skills to the table at a time when everyone wants change, wants disruption. There are very few Republicans and Democrats left. Now it’s more populist versus capitalist.

He can become president because he’s that good, not because Hillary Clinton is that bad.

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