George Pratt Shultz (December 13, 1920 – February 6, 2021) was an American economist, diplomat, and businessman. He served in various positions under three different Republican presidents and is one of only two people to have held four different Cabinet-level posts. Shultz played a major role in shaping the foreign policy of the Ronald Reagan administration. From 1974 to 1982, he was an executive of the Bechtel Group, an engineering and services company. In the 2010s, Shultz was a prominent figure in the scandal of the biotech firm Theranos, continuing to support it as a board member in the face of mounting evidence of fraud.
Born in New York City, he graduated from
Princeton University before serving in the United States Marine Corps during
World War II. After the war, Shultz earned
a Ph.D. in industrial economics from the Massachusetts Institute of Technology (MIT).
He taught at MIT from 1948 to 1957, taking a leave of absence in 1955 to take a
position on President Dwight D. Eisenhower's Council of Economic Advisers.
After serving as dean of the University of Chicago Graduate School of Business,
he accepted President Richard Nixon's appointment as United States Secretary of
Labor. In that position, he imposed the Philadelphia
Plan on construction contractors who refused to accept black members, marking
the first use of racial quotas by the federal government. In 1970, he became
the first director of the Office of Management and Budget, and he served in
that position until his appointment as United States Secretary of the Treasury in
1972. In that role, Shultz supported the Nixon shock (which sought to revive the
ailing economy in part by abolishing the gold standard) and presided over the
end of the Bretton Woods system.
Shultz left the Nixon administration in
1974 to become an executive at Bechtel. After becoming president and director of that
company, he accepted President Ronald Reagan's offer to serve as United
States Secretary of State. He held that
office from 1982 to 1989. Shultz pushed for Reagan to establish relations with Soviet
leader Mikhail Gorbachev, which led to a thaw between the United States and the
Soviet Union. He opposed the U.S. aid to rebels trying to overthrow the Sandinistas
using funds from an illegal sale of weapons to Iran that led to the Iran–Contra
affair.
Shultz retired from public office in
1989 but remained active in business and politics. He served as an informal
adviser to George W. Bush and helped formulate the Bush Doctrine of preemptive
war. He served on the Global Commission
on Drug Policy, California Governor Arnold Schwarzenegger's Economic Recovery
Council, and on the boards of Bechtel and the Charles Schwab Corporation.
Beginning in 2013, Shultz advocated for
a revenue-neutral carbon tax as the most economically sound means of mitigating
anthropogenic climate change. He was a
member of the Hoover Institution, the Institute for International Economics,
the Washington Institute for Near East Policy, and other groups.
Shultz’s Life after Public Office
After leaving public office, Shultz
"retained an iconoclastic streak" and publicly opposed some positions
taken by fellow Republicans0. He called
the War on Drugs a failure, and added his signature to an advertisement printed
in the The New York Times in 1998, headlined "We believe the global
war on drugs is now causing more harm than drug abuse itself." In 2011, he was part of the Global Commission
on Drug Policy, which called for a public health and harm reduction approach
towards drug use, alongside other luminaries such as Kofi Annan, Paul Volcker,
and George Papandreou.
Shultz was an early advocate of the
presidential candidacy of George W. Bush, whose father, George H. W. Bush, was
Reagan's vice president. In April 1998, Shultz hosted a meeting at which George
W. Bush discussed his views with policy experts including Michael Boskin, John
Taylor, and Condoleezza Rice, who were evaluating possible Republican
candidates to run for president in 2000. At the end of the meeting, the group
felt they could support Bush's candidacy, and Shultz encouraged him to enter
the race.
He then served as an informal advisor
for Bush's presidential campaign during the 2000 election and a senior member
of the "Vulcans", a group of policy mentors for Bush that also
included Rice, Dick Cheney, and Paul Wolfowitz. One of his most senior advisors
and confidants was former ambassador Charles Hill0. Shultz has been called the father of the
"Bush Doctrine" and generally defended the Bush administration's
foreign policy. Shultz supported the 2003
invasion of Iraq, writing in support of U.S. military action months before the
war began.
In a 2008 interview with Charlie Rose,
Shultz spoke out against the U.S. embargo against Cuba, saying that U.S.
sanctions against the island country were "ridiculous" in the
post-Soviet world and that U.S. engagement with Cuba was a better strategy.
In 2003, Shultz served as co-chair
(along with Warren Buffett) of California's Economic Recovery Council, an
advisory group to the campaign of California gubernatorial candidate Arnold
Schwarzenegger.
In later life, Shultz continued to be a
strong advocate for nuclear arms control.
In a 2008 interview, Shultz said: "Now that we know so much about
these weapons and their power, they're almost weapons that we wouldn't use, so
I think we would be better off without them."
In January 2008, Shultz co-authored
(with William Perry, Henry Kissinger, and Sam Nunn) an op-ed in The Wall
Street Journal that called on governments to embrace the vision of a world
free of nuclear weapons. The four
created the Nuclear Threat Initiative to advance this agenda, focused on both
preventing nuclear terrorist attacks and a nuclear war between world powers. In 2010, the four were featured in the
documentary film Nuclear Tipping Point, which discussed their agenda.
In January 2011, Shultz wrote a letter
to President Barack Obama urging him to pardon Jonathan Pollard. He stated,
"I am impressed that the people who are best informed about the classified
material Pollard passed to Israel, former CIA Director James Woolsey and former
Chairman of the Senate Intelligence Committee
Dennis Deconcini, favor his release".
Shultz was a prominent advocate of
efforts to fight anthropogenic climate change.
Shultz favored a revenue-neutral carbon tax (i.e., a carbon fee and
dividend program, in which carbon dioxide emissions are taxed and the net funds
received are rebated to taxpayers) as the most economically efficient means of
mitigating climate change. In April
2013, he co-wrote, with economist Gary Becker, an op-ed in the Wall
Street Journal that concluded that this plan would "benefit all
Americans by eliminating the need for costly energy subsidies while promoting a
level playing field for energy producers."
He repeated this call in a September 2014 talk at MIT and a March 2015
op-ed in The Washington Post. In
2017, Shultz cofounded the Climate Leadership Council, along with George H. W.
Bush's Secretary of State James Baker and George W. Bush's Secretary of the
Treasury Henry Paulson. In 2017, these
Republican elder statesmen, along with Martin S. Feldstein and N. Gregory
Mankiw, urged conservatives to embrace a carbon fee and dividend program.
In 2016, Shultz was one of eight former
Treasury secretaries who called on the United Kingdom to remain a member of the
European Union ahead of the "Brexit" referendum.
Theranos scandal
From 2011 to 2015 Shultz was a member of
the board of directors of Theranos, a health technology company that became
known for its false claims to have devised revolutionary blood tests. He was a prominent figure in the ensuing
scandal. After joining the company's board in November 2011, he recruited other
luminaries, including former secretary of state Henry Kissinger, former
secretary of defense William Perry, and former U.S. Senator Sam Nunn. Shultz
also promoted Theranos founder Elizabeth Holmes at major forums, including
Stanford University's Institute for Economic Policy Research (SIEPR), and was
on record supporting her in major media publications. This helped Holmes in her
efforts to raise money from investors.
Shultz's grandson, Tyler Shultz, joined
Theranos in September 2013 after graduating from Stanford University with a
degree in biology. Tyler was forced to
leave the company in 2014 after raising concerns about its testing practices
with Holmes and his grandfather. George Shultz initially did not believe
Tyler's warnings and pressured him to keep quiet. The former secretary of state continued to
advocate for Holmes and Theranos. Tyler
eventually contacted reporter John Carreyrou (who went on to expose the scandal
in The Wall Street Journal), but as summarized by ABC Nightline,
"it wasn’t long before Theranos got wind of it and attempted to use George
Shultz to silence his grandson." Tyler
went to his grandfather's house to discuss the allegations, but was surprised
to encounter Theranos attorneys there, who pressured him to sign a document. As recounted in the documentary The
Inventor: Out for Blood in Silicon Valley, they questioned Tyler in a manner
that George described on April 4, 2017, as verbal assault. Tyler did not sign any agreements, even
though George pressured him to: "My grandfather would say, like, things
like 'your career would be ruined if [Carreyrou's] article comes out.'" Tyler and his parents spent nearly $500,000
on legal fees, selling their house to raise the funds, in fighting Theranos's
accusations of violating the NDA and divulging trade secrets.
When media reports exposed controversial
practices there in 2015, George Shultz moved to Theranos's board of counselors.
Theranos was shut down on September 4, 2018.
In a 2019 media statement, Shultz praised his grandson for not having
shrunk "from what he saw as his responsibility to the truth and patient
safety, even when he felt personally threatened and believed that I had placed
allegiance to the company over allegiance to higher values and our family. ...
Tyler navigated a very complex situation in ways that made me proud."
Death
Shultz died at age 100 on February 6,
2021 at his home in Stanford, California.
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