Transcripts For WHYY Charlie Rose 20140611

Riches. Theyll buy goods and services, ice homes, goods and services that the United States produces. That would be good for us too. Whenever you add a resource into the world, a commodity whether its energy or wealth, its good for the person who really acquires it, but ultimately it trickles across the world and is good for everybody. Rose blankfein for the hour next. Theres a saying around here you stand behind what you say. Around here, we dont make excuses, we make commitments. And when you cant live up to them, you own up and make it right. Some people think the kind of accountability that thrives on so many streets in this country has gone missing in the places where its needed most. But i know youll still find it, when you know where to look. Captioning sponsored by Rose Communications from our studios in new york city, this is charlie rose. Rose Lloyd Blankfein is here hes the ceo of Goldman Sachs since 2006. He steered it from difficult times notably the Global Financial crises in 2008. Goldman sachs is holding the new york American Energy summit in new york city and takes a look at how the country can be environmentally responsible and also profit from the north american shell revolution. I am pleased to have Lloyd Blankfein back at this table. Thank you charlie, good to be here. Rose now you work without a jacket, correct. I am right now. Rose tell me about this summit. Because everybodys excited about the shell revolution, you know. So what does it mean, how fast is it coming and what will it change. Well a lot is going to change when you think of the u. S. Being as close it is to Energy Sufficiency and not having to be a net importer of energy. You think of the history over the last 40 years, since the Arab Oil Embargo when it was driven home how dependent we are on foreign oil and the history over the last 40 years. Can you imagine how Different Things would have been over the last 40 years and project forward and imagine how different it will be over the next generations if we can get this right and make north america more efficient both in terms of the economy and in terms of the geo politics and americas position in the world. Its quite a blessing but the benefits of that blessing dont just come automatically, you actually have to do things so we can take advantage of it. Rose what do we have to do. We have to reconcile the schism between the people who are only thinking in terms of the environment, people who are only thinking in terms of supporting the economy. And get some sort of accommodation between the two. Both of whom are right. Its not a question of one wrong one right. Both are right but accommodation has to be reached so we can go forward and have rules that are durable and reliable so people can make the kind of long Term Investments that allows us to receive the benefits of the energy situation. Those benefits are growth and jobs. Rose well talk about that but in terms of rules, Congress Makes the rule youre talking about. Congresses has a lot of competing jurisdictions. Are we going to be exporters of l ng driving the price down in this country and using the long term bills of dollars in investments that only receive terms after ten years or more or are we going to distribute it overseas in which case it will go and lower the price of Energy Around the world in which case theres noto move your businesso the United States. Licensing, getting these things going. Pipelines which are not an unbridled good because they raise certain Environmental Concerns which are legitimate. But if done well, properly regulated and when if it doesnt take a lifetime to get those things off the ground well get the benefits in our lifetime. Rose youre in favor of the keystone project. No, im in favor, which brings us to the point of this conference which is to bring a lot of interests together who have strong opinions ask get them to engage in a constructive dialogue so we can reach an accommodation. Rose you dont want to be against and for but you want to be how do we find common standing. Exactly. We would like to be an honest broker, a catalyst, if you will. Personally i think we can have pipelines and do them in the right environmentally sensitive way, get the benefits of the boon to the economy and at the same time take advantage, make sure its done in a way that doesnt, in an environmentally safe way. In fact you have to do both of those things. Its not a winning game its a get along game. Either side if people are only interested in Economic Growth argument got their way on everything who would make a long Term Investment without thinking in the back of his or her mind that gee, will this Regulatory Regime be stable into the next administration or will this be reversed. Similarly, if you were making a bet that youll never be able to develop these Energy Resources or transport these Energy Resources, who would make a bet on the basis of that. I think you have to have a compromise between the two. Not so much because getting the baby is a wonderful thing but because its the only thing that will ultimately be stable in the long run. The point to make here is that the benefits of these investments can only be realized after a long period of time. But once you make the investment, you cant withdraw from the investment. Rose to make Human Capital vent businesses have to have certain rules they can exist and stability so they can invest it once you make an investment like this you may be locked into that investment for decades. But every day you could decide to defer that investment day by day. The path of least investment is to defer it. You want to know the rules set under which youre laboring an investment will pertain for a long time. Rose should one role of governments around the world try to create an environment in which you have rules and regulations and Economic Opportunities so bad its an incentive for business to invest. I think an incentive but again you have to take account of the fact that we not only want to invest but we want to leave the right kind of world to our children also. Be able to breathe and have clean water and good lifestyle. You want to have, you want to incentivize people to invest in sensible projects that are done in the most environmentally safe way. Rose has that happened over the last 25 years. I think were stepping in the right direction. For one thing theres another element. People have to agree on the faxes or agree on a band of facts. So for example theres arguments back and forth of how much more environmentally friendly natural gas is. Well if you burn natural gas of course its more friendly than burning oil. But if you dont transport it properly and you dont take it out of the ground properly then it will leak methane which is a lot worse than oil. So the answer would obviously be lets gauge natural gas with a set of rules regarding its development and its transportation thats done in a way that doesnt allow methane to escape. And those rules have to be put in place. Rose they can do that if in fact everybody focuses and does whats necessary and has the right rules it can be done. I think thats right. And if one side manages to get permitted without those requirements, thats a very hollow victory because in the long run, you know youre going to have to do it in the right way so you might as well have the rules set so that you and your competitors have to do it in the right way now so that again you can make that investment into durable investments. Rose how much power does Goldman Sachs have in terms of washington and in being able to see the kind of rule making it wants. Advantageous to whatever mode. All our power, we have influence but in a kind of geo political term its the softest of the soft power. Softest of the soft power. We have people on the macro side. We put out ideas and defend our ideas, were provocative and Show Initiative but at the end of the day we dont have the power to execute. Rose its mostly because the research and analysis, mostly because you want to see it work and the way the worlds going so that you can make reasonably, reasonable decisions with a fair understanding of the risk. Sure. At the end of the day, all of our activities, the success of all of our activities correlate with growth and gdp. Were in favor of growth and gdp. Sustainable growth and gdp. It does us no good to have a spike in growth and have Everything Everything be discombobulated. If you want to have the best projection of Goldman Sachs Going Forward i ask you where is gdp growth going to be. Is it going to shrink, it will shrink at a multiple of that. If it grows it will grow in a mother of that. Were interested in growth and interested in the benefits that flow from growth like jobs creation. We are finance sears of activity. If you want to know, we have good relationships with the people who need capital and we have good relationships with pools of capital. We analyze the needs and we put our, we validate it by culling out and doing, raising money for them either by lending them money or financing sometimes using our own capital, sometimes an ipo and that validation will draw in investors who think they are good at identifying those opportunities. Rose has anything changed about the businesses you were in, just the description you just engaged in as a consequence of the recession that we went through in 2008. Well i think theres a lot more focus on us, a lot more regulation and oversight. A lot more process internal to Goldman Sachs and exturn to Goldman Sachs making sure that things are well complied. For example, when we go out and validate an investment that were very transparent about what we do, rules that govern what we can say about certain things and certain times. Making sure that both sides of an issue are explored. So in other words, yes theres more process and theres more scrutiny oversight. But basically, the substance of what i said, what our role is in the world is an intermediary between people who need capital and the big pools of capital, thats been pretty, that role has been a necessary role for thousands of years of financial history. Rose talk about this conference that youre having and what might come out of it. How fast will the shell revolution come on stream. When we will see the consequences. Theres a number of consequences we will see. One consequence already with the ambiguities that exist, you can see part of the revolution has alreadyctheres a lot more enery becoming available. Oil and natural gas. And were well on our way again not being independent because we dont necessarily have the right kind of fuel and dont necessarily have it in the right places. But towards Energy Sufficiency. And generally we talk about, we dont just talk about u. S. , we talk about north america. And the continent which brings up the question of whether you ship it down from canada into the United States which is currently most of the exports from canada. On the production side, were seeing that already. What we need, right now its projection over consumption. Whats lagging now is not the ability to get it up out of the ground. Whats laggingand so, and its g thing. Its not necessarily intuitive but when you go out and you frack and do activities you can turn around and sell it quickly. Your return on investment returns quickly if youre the developer or the producer. If youre the consumer and you have to go out and plan and build a factory, a Chemical Plant for a couple of billion dollars or more you may not get that return on investment for ten years or more. So there you have to have a wide wide runway of seeing ahead and seeing the price can be low its going to be stable. You know what the rule set is going to be. So really its much easier to develop and to produce it and thats why those statistics rise. What were not really seeing is the plants and the manufacturing jobs come from it. And i think thats where the rules and regulations set come in. Rose the shell revolution will affect us, it will affect china. They will have their own shell capacity. Sure. By the way our shell capacity to the extent that were taking more natural gas and oil out of the ground, it means were importing less from the middle east. China imports more oil from the middle east than we do. Theres a million reasons why we have a lot at stake in the stability of the middle east. But one of them had to have been the fact it was a major source of our Energy Supplies to the extent that were not the major importer of that oil but oil from the region going to china. Youre going to see other powers in the world have a stake in the. Rose will it diminish the influence in qatar and other countries that are either oil or gas rich and russia. Well dont forget theres race. Theres more supply but more demand coming. The thing thats more stark not demand that will meet the new supply but different customers. That will have geo political consequence. Rose who are the new customers. The new customers will be china. Rose they just signed a big deal with russia. Absolutely. The russians and chinese were rivals in a lot of ways and they have to transact and its in both their interests to do so. Russians are looking for new markets and chinese are looking for sources of supply and were not competing for sources of supply in the same way because we have our own supply. Those are some of the geo political consequences that will develop over time. Rose how out into the future do you think you can see . Im in the Risk Management business so i dont think i can see four inches into the future. Rose your firm has a reputation of being pretty good understanding the future and being able to make some analysis about what risks to saying. Ill confess to you what i think what we aspire to is less foresee the future and more be a great contingency planner. Because, and sometimes the contingency plan is really well and you can respond very fast to whats happening because you thought through all the possibilities. You can get off the mark so quickly it looks like you false started. It looks like you anticipated the start when all youve really done is listen so closely that you got off the mark quickly. I think its hard enough to predict the present. Think about it, perspective. Its very hard to step out of your context and see what is happening. I have views about the future but ill tell you it wouldnt be a very good risk manager if you let what you think was going to happen, have too great an influence on what you planned for and protected against. What we really do is we really contingency plan. What might happen, what could happen. Rose what is your core competence. Personally . Yes. I think im, i think i have, i am highly functional paranoid. And if i overstated the highly functional part im sure im paranoid. Rose paranoid about what. I have to worry about stuff. If the phone rings too late at night or too early in the morning i think oh my god what happened. I have to answer. In fact if it stopped ringing i call everybody i knew at work to find out what i missed. You know i spend about, i have to spend about 98 of my time worrying about a the 2 worst contingencies. Rose when you look at the world today, how has it changed most dramatically in the last ten years for you. Well for me rose the role that you have. I cant think. Ive been a ceo of Goldman Sachs for ten years and president for three years before that so my last ten years isnt much of a conversation talking about my role with goldman. Rose goldman existence has changed so what goldman does today is dramatically different from what it did in any way because of change in global circumstances. Sure. The firm evolves so i would say if you go back a dozen years and not much more than that. We were a small firm, a much smaller firm, much more domestic firm. We were 15 years ago we were a private partnership which was, you know, a small firm without a lot of access to the Capital Markets. Since that time we became a Public Company with a lot of access to Public Markets and therefore a large Balance Sheet. One of the biggest differences is we were always in the business of giving advice as a result of having our Balance Sheet and being able to raise capital ourselves and having a much bigger Balance Sheet. We cannot only advise people what to do, we can help them execute more. In other words you can provide the financing. Thats a very big difference. As the world has developed and grown into the Growth Markets weve grown with it. 15 years ago, Goldman Sachs didnt have to go to china two or three times a year or india every year or brazil or some of these countries and as these countries have grown around the world what we do i start the conversation by saying a lot of what we do, the success that we would have correlates with growth so naturally we chase growth around the world. We not only chase growth that exists but we try to drive growth wherever we go. Rose i asked you this morning if you look at the Global Economy theres a kind of recovery going on around the world. At the same time everybody talks about we need more growth and the question is why have we not had more growth and what do we need to do to incentivize growth. Well, were having growth. Look we had a very big shock. We had a financial shock which has other consequences associated with it because we have shock to the Financial System. Theres an aversion. Theres an aversion, theres more conservatism people accumulate cash and financial. Weve seen, look, were in a situation now where Interest Rates around the world are hovering around zero, in some cases 15 below zero. And people somehow cant find enough opportunity to take cash thats offered to them at no cost and deploy it. Rose why is that . Because rose why is that . Well, i think sentiment is, you know, people make mistake. They are given nobel prize in economics but its still not a hard science and youre dealing with sentiment and people. And when sentiment rose people want to know about prizes for measuring. They measure it and do statistical analysis. But the fact of the matter is, you can have a change in sentiment and from one minute to the next, it not only changes your world view, it erases your memory of what you used to think. People entered into 07 very very enthusiastic. They left 07. Its not just the Economic System look at the sentiment in washington the poison politics that exist now. We got there and we can get out of that situation. thats rose the core question for me, and i asked you this earlier, as i said, what is necessary to give the confidence for those people who can get money at zero Interest Rate and have already a lot of money in the bank and theyre not spending it. Is it because theyre unsure about the future. Yes. Rose what is the threat to the future that they worry interest. Look, we just started to have recently after low level of activity for a long time we just had a wave. Rose a lot of indemnity my business. Ill describe a scenario with you. People are watching and waiting and not wanting to take a risk and every time something goes wrong you want to kill the pecial that made the mismakes. People are sitting in record levels of cash. Somebody does a deal. Oh my god i wish i had done that. And now im thinking yesterday i was thinking boy its really risky if i do something. Now somebody else did something, got applauded. Im a ceo, i better do something too. If i dont do something. Im just ascribing to how sentiment can suddenly change and people look for that. So record levels of cash wan and you can say on the one hand why arent people use it. At some point people will come along and say and people are doing this, activists are saying listen you have soqif you dontn it to your shareholders and let them use it and all of a sudden people say i better do something. Rose just what happened at apple. Thats something that you could see going on in a lot of places. And so sentiment can shift and because it hasnt shifted, and by the way when it does shift, no one will remember that it was different a week earlier. Just peoples mind set shifts. Rose why does it shift . Again, were talking about, were talking about the human condition. By the way, these are topics that people have ruminated about. Why is there a business cycle. Trees dont grow to the sky. Why should you be surprised when they dont. Interest rates are hovering at very low levels now. Doesnt everybody know they will revert to a higher level above zero councilmember the economy. Why will they be shocked. Rose but does that mean you remain notwithstanding how much you are a paranoid eternal optimist. Because you know that Interest Rates are going to go up. Well, i would say a separate thing. I have been doing this long enough and in general, and look you know, i dont know just the things in front of me i know about world war ii before i was born. I know about history and people think one thing and they revert back again. Thingsdsthings are really realld for a long time. By the way, its not unrelated. Theres a reason theres a cycle too. When things are going really well, despite their best efforts, people get complacent and complacency sews the seeds of the next crises. How many people have people said and no matter what you say to yourself when the next crises strikes how many people are saying boy i missed the opportunity to buy the water front property when we had the last turn down. Rose how many people went out and bought a lot of water front property in 2008. By the way, but the very next time it happens, im going to do it because i will remember. Well the next time that crises happens your knees are going to be knocking together louder than anything elses. Rose see this is fascinating. What is it that makes us not willing to when we know things are going to get better from 2008. It is not going to go down forever. We know its going to come back and lets say, why dont we do more. Or is it only the smart ones who do more at that time. Thats what Warren Buffett does so well. Rose so you took all of his money didnt you. I borrowed. I wish i had taken it but unfortunately i had to give it back. Rose why did you make the deal. Because you needed the money or idea of his confidence. I needed both. Fact of the matter is a number of people came to us afterwards. This is a week after Lehman Brothers when everybody was fretting about whether the Capital Markets were open and this is before talk and we did a transaction with Warren Buffett which we preferred and got 5 billion. And the very next day did a common equity deal in the market so the markets were open to us. And with warrens money we got more than just money we got validation of somebody thats regarded as a terrific investor and somebody who knew our firm and this was important. People called us up afterwards and said gee i would have done that and that would have been great but with you i would have just gotten the money. With warren it was something more important. Rose a lot of people said to me at the time when you made that deal, i would have made that deal, you know. Anybody would have made that deal which means that he is a savvy negotiator as well. Let me tell you. Negotiation took about 35 seconds. Rose is that right. Yes. Rose you asked and he said yes. There were reasonable terms to the risks he was taking at the time. Rose how frightened were you in 2008 because tim geithner writes about you and your voice he says. We were very nervous and i tell you, we were either, if you were alive you were nervous. He also wrote that and thats absolutely true. People say oh gosh, look obviously we were able to borrow money and do transactions on our own so it wasnt that the Capital Markets were closed and you never know. But what i forgot to tell you, we insure against risks in my business. You insure risks in your personal life that are 2 risks, 1 risks. Was the risk of a cataclysm, risk of a failure that would have affected us and caused our own facial was thatnly 2 or 4 . People are going back and forth, people are saying oh im sure the Systemic Risk wouldnt have gotten to a level there wouldnt have been a series of dominos and failures. What do you mean was it less likely than not, 50 probability, 30 , 20 probability. When you think about what was at stake. How much of a risk as a probability would it had to have been for you to big price for that risk. I think that the regulators and the officials did a very good job and of course theyll get excoriated for it. Why because the world didnt blow up. It didnt blow up because they took the measures they took. If they hadnt, and you have to get into this debate about whether the world would have come to an end or not. How about there was some more than insignificant possibility. Wasnt that enough when youre responsible for the safety and soundness for the Financial Condition of the country and the planet. That to me is enough of a threshold for you to take the steps that they took. Rose you think bernanke made the right decision later. I think they made great decisions in the fog of what they know. Theres no doubt in my pliepped writing a dissertation in some University Library somewhere saying they should have gone three degrees more left or four degrees more right or i should have waited another week. Given the moving parts and time and by the way given the courageous decisions knowing they were going to get criticized its petty for them rose is it unlikely it could happen again or will it always happen again because people grow from crises to confidence and overconfidence. Look. I think both are right. I think we can improve the system a lot to make it less likely and make it less costly to people who are involved in the crises. But at the end of the day, the definition of enough time, the definition of infinity is that not, its not that everything can happen, its that everything will happen. And so given enough time everything will happen. And look, some of the things that we implemented that makes the world safer makes the world safer from lets say the 20 year storm, the 20 year event. And actually make it more dangerous for the 50 year storm. Look if you make everybody go to a Clearing House, it will make it less likely that you know that a moderate problem will cause a financial because everybody will have the safety and protection of a guaranteed Clearing House. If you have an event thats so big that it puts the Clearing House in jeopardy. The once every 50. And so i think you have to do everything. You have more vigilance more rules more oversight, more consequence if that fails to achieve the right result. And a way of giving yourself out of a situation if all else fails in a way that protects the public the best. But if youre asking me could i imagine scenarios in which we get into difficulty again, the world unfortunately, this is not a new phenomenon. When youre dealing with credit, dont forget, currency in the Financial Markets, things that are of value because i assert it and you believe it. When people stop believing things. At the end of the day if a company has a crises, if an oil tanker gets grounded or leaks happen and you question whether the companys run well or not and you pull up to a service station and the gas is . 02 cheaper there do you buy the gas, of course. The plant, material, and equipment are they still there and still valuable. Sure. But in a Financial Institution because im getting a payment from somebody else and if someone doubts your solvency and the payment i have to make doesnt come in from the other side, you get kind of a domino effect and a Chain Reaction because its all confidence. And thats why Financial Institutions and Financial Markets are different than everything else. We have a Federal Reserve system some people call into question whether we should. But we have, there are Central Banks in the world and Federal Reserve system in the United States because everybody thought there needed to be a lender of last resort. When confidence gets shaken to be an institution big enough and Balance Sheet big enough to say im going to put the question of confidence out of reach. Rose thats exactly what they did. Thats exactly what they did. Rose thats what the central bank did in youre. Thats what they did in europe and do you know something people will say my god should we have done it, it worked and now you have to quibble because it worked. If it didnt it will be a entirely different situation. We had a panic and problem like this for every few years in the 19th century. And i think gone are the days when the bank of j. P. Morgan could stride on to the floor of the New York Stock Exchange and say ill by 10,000 u. S. Deal and everybody says were saved. The world is too big. The Balance Sheet of world is too big and it fakes a big Balance Sheet like the government to take care of it. Nobody should rely on it and people should be punished in they ultimately do need to rely on it. But taking, you know, but anyway. Rose heres whats interesting when you talk about that. Im also thinking about the if aing that china went from doubledigit growth to expectations around 7 , correct. Mmmm. Rose but it now has the largest economy in the world. Or close to it. Rose close to it. Whats going to be the consequence of that . Well, you know, you can look in the worst terms u. S. Has a competitor. In the best terms theres no locus rose theres a market. It has a market. And look, in a way gdp and growth is like increments of gdp is like increments to oil. If they found oil anywhere in the world, of course its wonderful for the country that discovered it. But that oil that gets, then gets added to the worlds supply, it reduces the price of oil anywhere because all things being equal, you add supply and demand stays the same the price goes down to everyone. Its a win fall for the country that sources it but it benefits everyone. Same thing with gdp. If china grows its gdp and the chinese get richer, of course its a wonderful thing for china. But what will they do with their riches. For some percentage of their riches theyll buy goods and services. Theyll buy ice homes, goods and service that the United States produces and that will be good for us too. So whenever you add a resource into the world, a commodity, whether its energy or wealth, its good for the person who really acquires it but ultimately it trickles across the world and is good for everybody. Rose so its not a zero sum gain. No. When wealth gets created, the Financial System in this country and globally does two things. It helps to generate the wealth and serves to distribute it. And so wealth created anywhere in the world gets distributed because how do people manifest the benefits of wealth. They buy things. Some of the things theyll buy from us. If theyre not big enough from us, maybe its because they have restricted policies and we have to fight that or maybe its because were not competitive and we dont make things that they wanted. We have to blame ourselves. Rose take me to emerging markets like brazil. What happened to them because your own guy, to coin the term brick, so therefore when emerging markets came along he said to me at this table, one characteristic of an emerging market is the developing middle class, yes. What happens so that their growth has stalled for brazil and some other emerging markets. Well, it stalled but i wouldnt, its not, i wouldnt bet against it. I mean when somebody is new and something is fresh and someones growing at a fast rate you get low volatility. Rose you create a new big class. You create a new buying class and gets overextend and it consolidates and goes back. The 20th century was a Great Century for america but every year wasnt a great year for mr. Panic of 07, the great depression. Ten years. It was an awfully good century but we had a lot of bad years in that. If you walk away from brazil now in 2014, you may have 86 years of their century. Rose when you look at china in terms of what theyre doing, there are those that argue, back to your energy summit, that north america is in fact the shell revolution takes place as an open end and all the jobs will have an economic engine that will drive the Global Economy more than asia. No. Again its not a competition. Well help drive the Global Economy and theyll drive the Global Economy. Rose there are metrics here arent there. Lets look at it this way. The United States people are debating how fast is the United States growing and some people say gee its growing at 2. 5 or at three and a quarter. Its chinas economy as you said is almost the size of the u. S. Economy and theyre debating whether its growing at 5 or 8 . Thats the bigger difference. In other words, and again when you look at growth, it gets added to the world. The consequences of china getting it right and by the way 5 , they could go south or they could go north of 8 too. The consequences of them getting right or wrong sooner rather than later actually a lot more growth added to the world than what people are debating about is realistic for the United States and its very very consequential and thats why people are keeping an eye on it. China is entering into another phase now. Before they were going for growth at all costs. And so growth at all costs, you run those factories, you keep them going and you keep going going. At some point you decide youre rich enough that you want to breathe. Rose there was input of new money and there was a corruption too. A lot of corruption. When things are growing quickly, they build a lot of airports all at once, they to the a few in the wrong place. Rose when they make a decision they carry the decision out. State capitals can work. It can but i think behind the scenes and were not privy to it its monolithic. I may be chief executive officer but i also have shove and beg. Democracy is the wrong word but theres difference of opinion and input that goes in china that necessarily we dont see. Maybe it occurs in the party or maybe behind closerred doors. Rose they have arguments in the standing. They have arguments, sure. Rose coalitions like everybody else and every other place. Like everybody else. Rose so we live in this Global Economy and you and i have talked about this before in which we see more wealth than weve ever seen before. Lots of people are writing books and having conversations about income inequality. And theyre concerned about the consequences of the top 1 perpetuating itself and getting richer and richer and there is a division so that all boats are not rising. Sure. Well id say that recently, you know, first of all this has been going on for 30 years that theres been, i mean by the way, that doesnt relieve us of the problem, it compounds the problems thats been going on for decades where richer is richer and the poor is cahing up. Thats obviously a problem and a destabling thing. Im not sure i understand all the reasons why. Look anything that exists i can offer an explanation but give me the explanation i wouldnt have predicted where wed be. But you know, id say at a point which is great technological change in addition when you have a flat world where whoever makes the best product, everybody buys it from him. When anybody offers cheap lbor everybody goes there and manufactures. You get a kind of a more how far a winner take all kind of world and thats created that were seeing but its something that is bad for everyone because its destabling. Rose i understand all that but i mean at the same time, take a look at this. Ill give you a couple clips from people on the show recently and you know both of them at least you know one of them. Christine laguard talking about imf making income inequity an issue. Were looking at income inequity because we believe that it is macro critical. In other words its raising a point where its really can have a destabilizing and detrimental impact on the growth of the economies and on economies in general. So we done two critical studies in my view because were looking not from a political or ideological angle, were just trying to understand the fact and thecorrelation. And one is inequity, excessive inequity hurting growth. And the answer seems unambiguously yes. Its hurting sustainable growth. And the second study we did which goes against conventional wisdom was, is redistribution policies if adequately articulated, is redistribution policies a break on growth which is conventional wisdom. Everybody assumes for a long time that if you do redistribution then people will not be attracted to producing more, earning more, doing more because the more is going to other people. Rose you admire her. I admire her. Again shes defining the problem. Im not hearing a solution in it. Do you know what i think the best redistribution is. Rose exactly what i want. The best redistribution policy is, obvious for aggressive talk system, but the bells redistribution is to spend more money and have the best educational system. That would be great redis tribution. Take tax revenue of which i pay a higher percentage and poor people pay zero and use it to educate everybody which i wont take advantage of because my kids go to private schools. Thats a good redistribution system. Rose why dont we do that. I dont know. Rose a lot of other a people believe unless people like you and others come together we will not get our hands around income inequity and we cannot. Were very, you know. Look, its okay a cliche that you know gee people in business like myself, were big smoking big cigars it has a little bit of it. The fact of the matter is rose problem solving. No, again i feel this very strongly. I think its a shame that our Education System is in the shape that it is. We started the conversation talking about energy. There are things that we can do. The point in politics make it very hard to legislate. I would like to see legislation done the blessing weve been handed, lower our energy costs and revitalize manufacturing of the jobs that come with manufacturing in this country. I would like to see that happen. I think that would help, that would help. Rose are you doing everything that you know how to do to push those ideas forward . Are you . Of course, i am. Right now im talking to. Of course exactly. Rose i do think these are important questions i really do. I dont think were getting our hands around them enough and we have to ask ourselves is this between rich and poor growing, growing and are we doing enough and in a sense to find ways through education and lots of other means so that so many people are not falling below the line. Charlie we publish on that topic. I have one vote. Ive been shrill on these policy issues. Rose do you think im being naive. Come on, no, youre not naive. But i think it is a bit of you know cliche we must think because were that Capital Markets and bankers must think in a certain way. I know you know it, weve worked together on certain of these projects and you know where we are on these issues. Its a, its a little bit of problem with our political democracy right now that we cant get certain things done. Rose to perform the tax structure. We cant pass tax legislation. How about immigration. How about Immigration Reform where people may want to come to this country because its a beacon, people want to start their businesses, most talented people in the world want to start their business and create jobs and we cant do that. Theres a lot of problems. Im not blaming a single person. Rose nor am i. Im just saying, are we doing enough is my point. The issue of immigration clearly, we cant get Immigration Reform. Republicans dont want to talk bit right now because they dont want it to be a midterm issue because they want to talk about other things as theyve effectively said so it wont be an issue in the midterm elections. Im going to try to in the interest of neutrality, i would say that there are people who dont want to talk about, to some people immigration is policing the borders and reuniting families. Rose it all to be both. Right, exactly. One side wants to talk about one side the other side want to talk about the other. I think immigration can be done because do you know what we can actually do both. Thats a rare movement. Rose we can allow people to have all the benefits of entrepreneurship and at the same time make sure that too many people are not falling in the cracks. Absolutely. Rose education is one way but there are other ways. Right. And so if you, getting back to your question and i dont want to get too far away, are we all doing enough. We can all do more. Listen personally and getting back to the thing i tell you what weve spent a lot of time doing. We spent a lot of time investing and financing industries that otherwise might not get financed in order to create jobs and great that circle where people do that. Thats in our Business Life and personal lives. Ill tell you in my political life, i vote in favor of all these things that would make, that would lift people out of poverty or i try to. But its a, you know, its a problem. And its, you know, its hard to point the finger at any one thing without pointing it at everything. Rose motion pea most of the people i know and youre rare and i really do believe youre rare. But most people really want to see a better country. They differ on terms on how they want to see the country. Everybody is right. You put a lie detector and everybody and they would say im only interested in the United States and people will say the opposite thing and they would all be true. Politics starts in this country not when everybodys wrong or right its when everybodys right as they see it as the context allows them to see it. My dad was a mailman and i grew up in the projects. Rose replaced by a machine. Yes, he was. Well i once told you the story. The only time i visited my father at work, he was a mail sorting in the post office, and when he left they were replacing him with an automated mail sorter. What i thought was poignant they had that machine for ten years but they had a policy of not replacing anybody but only do it by attrition. So they could have put that machine in and yet they kept him in that seat doing something a machine could have done faster and better for ten more years. When he left they put the machine in his place. Rose did he work overnight because they gave a small percentage of premium. When you sorted the mail in those days and done by hand, obviously they collected the mail by night and delivered it by day. Rose your mother was a secretary for a Security Firm or burglary. That was the virgin industry in my part of brooklyn was the Burglar Alarm industry. Rose you made it to the top of Goldman Sachs because why . Well, you know theres a lot of, look, this goes to the heart of the other question which is why everybody should be sympathetic to when people arent performing. I would say you know, yadda yadda i worked hard, i applied myself i did errands, i got paid and worked hard. But i got lucky. I went to a good firm. My firm didnt go bankrupt, it did well. I climbed up the ladder and people took an interest in me and it all worked out. You could be super smart and somebody wont take an interest in you and you could be super smart and someone takes an interest in you but in the industry it doesnt pan out. Thats good but you have to be lucky too. People have to be reminded of that too because it makes you impathetic of others. Rose are you attracting Lloyd Blankfein wasnt attractive to Goldman Sachs. They didnt hire me. I tried to get hired by goldman thanks but they wouldnt have me. I joined the firm that was acquired and i came in sideways. Rose im interested because this conversation, i mean you got to have some sense. You are sort of a sense of what it is that lloyd has had thats enabled him to sit astride one of the smartest and most admired companies yet critics belittle it as well. What was it that enabled lloyd to do this . What did lloyd no that perhaps others didnt know. You cant simply be lloyd worked harder. It was . I worked, look, ill tell you all the good, i could tell you a lot of good things about myself because i think a lot of good things about everybody else. Were all narcissistic in some ways. Ill tell you the good things about me, 10 of the worlds population also has. Theres also a matter of luck and if i werent the lucky guy and it was some other lucky guy that person would be sitting here and you would be asking that person whats so special. The answer is its not special. Someones going to be sitting here and its lucky thats it me. Rose you think that. Yes, i dont think im lucky rose what about somebody sitting over here saying lloyd, yes, i hear you. You make your own luck. Fine, im terrific. Im telling you, you have to get over a certain threshold. You have to be smart enough, you have to be personable enough, you have to work hard enough. You have to be the kind of person that people root for as opposed to root against. You have to be all those things and more enough. But a lot of people get over those thresholds. What makes you, look i could think of some people in life that god i wish i would have gotten next to that person andnr the loyal meantee of that person and not that person. Theres a lot of luck in the world. People win the lottery when theyre born. People win the lottery because they were born in the United States. Now listen, i dont have modesty faults or otherwise. I work hard, im very proud. Im also rational and necessary and i have to remind people of that. If you think, you run the risk of thinking that you deserve every good thing that ever happened to you. And if you think that, you might think that other people dont deserve what happened to them or deserve the bad results they v and i think some people do and some people are lazy but some people worked hard and it didnt go their way. Or when they came of age there was a war or they got drafted and they spent five years in the army and never caught up to themselves. A lot of things happened to a lot of people. Rose how long do you want to do this . This interview . [laughter] i could go on forever. Rose we could go on. No no no. How long do you want to be ceo of Goldman Sachs. You know, i dont, like right now and things are going well. And even doing this interview no kidding aside its a lot of fun. I think about the influence i have with the people i get to meet and i say gosh i want to do this for a long time. When things are really really bad and im getting you know pressured and i see characters of myself in the newspaper i think to myself god, i dont really want to do this but my sense of responsibility requires me to go on. So when things are going well you love it. When things are going poorly you cant leave anyway. And so its a very hard thing to get away from. Rose and youre optimistic about the future. Also its hard to get these positions. Once you stop doing it, you dont dont come back. What else am i going to do. Rose would you work in government in the public sector. I dont think people are clamoring to have me do that. But by some freak of reason, if i thought there was adeh Good Opportunity and i can make a difference and do something good, of course i would. Rose thank you for coming. Well thanks for having me, charlie. Rose pleasure having you. My pleasure. Rose Lloyd Blankfein, ceo of Goldman Sachs. Thank you for joining us. Captioning sponsored by Rose Communications captioned by Media Access Group at wgbh access. Wgbh. Org er what if i told you that you could change your life in just 10 days . The 10day detox is the fast track plan that will help you not only shed pounds, but put an end to Chronic Health problems. I want to teach you how to remove all that cleverly concocted junk thats sabotaging your metabolism and brain chemistry. I want to help you lose weight and i want to help you get healthy once and for all. Just give me 10 days and your life will never be the same. [cheers and applause] dr. Mark hyman is a family physician, bestselling author and internationally recognized leader in functional medicine. In this program, dr. Hyman will