Transcripts For KQEH Charlie Rose 20170731

Political campaign, in other words blaming him for things he does not deserve blame for. Hillary clinton is one, the president said he should be investigating Hillary Clinton. He cant. The rules that caused him to recuse himself from the russia investigation would also make him have to recuse himself from anything having to do with Hillary Clinton because of his involvement in the trump campaign. Rose we turn to Jeremy Grantham, chief strategist at g. M. O. We talk about controversial views on the future of capitalism. I think the biggest risk to American Society is the drift to more Corporate Power in politics and through monopolies and so on, unless and less to the workers and the destruction of the unions and the income inequality where we are 20t 20th out of 20 rich countries. We are the most unequal society. Also, the speed with which you can move from one economic class to another. One always used to think of america as being extremely mobile. Were the stickiest, the most difficult society in the developed 20 countries rose to go from lower class to the middle class. Yes. Rose politics and economy when we continue. Rose funding for charlie rose has been provided by the following and by bloomberg, a provider of multimedia news and Information Services worldwide. Caioning sponsored by Rose Communications from our studios in new york city, this is charlie rose. Rose we begin with politics this evening. President donald trump has replaced his chief of staff Reince Priebus with Homeland Security secretary general john kelly. Anthony salvantanthonyanthony sa new yorker reporter saying the chief of staff would be asked to resign. Joining me from the abc news studio here in new york is jonathan karl, as, as you know, the chief White House Correspondent for abc news and pleased to have him on this evening. I assume it doesnt matter whether he was pushed or fired. It seemed inevitable from what has been going on in the white house in the last several days or weeks. No question. He was fired. The president made it clear. Actually even before scaramucci came in, the president made it clear internally he was getting ready to make a change. Not necessarily on this exact date. The scaramucci fiasco, the back and forth between the two of them accelerated this, but the president made it clear he was getting ready to make a change. Charlie, this is an incredibly chaotic six months when you think about it because not only do you have a chief of staff one of the shortest serving chiefs of staff in history but also the National Security advisor who lasted barely a month. The White House Press secretary that left last week, a Communications Director that only last add couple of weeks. Six months of turmoil. Now hes bringing in a military man, general kelly, to try to impose order on the west wing. Rose it is said the president doesnt like people he considers weak and that he considered Reince Priebus weak. And i believe that priebus proved that to him over the last several days as scaramucci had gone out and repeatedly undermined him, most outrageously so with that new Yorker Interview. I know there were people close to the president that were urging priebus to take a stand, to go in and tell the president that he needed to fire scaramucci for what he said in that interview. One person close to the president even said to me that what priebus needed to do was to call exphac scaramucci into hise and fire him, himself, to have secret service take away his credentials and have him escorted out of the building and force the issueike that. Scaramucci made it clear on day one he was reporting directly to the priebus was unwilling to force the issue, to take a stand, and thats why ultimately the president decided today was the day to push him out. Glor whats interesting is Reince Priebus has people that admire him, people like the speaker of the house paul ryan but they did not rush to his defense. Certainly not within the white house. There was nobody come i mean, this struck me, cheacialtion being at the white house all week, seeing the way priebus was undermined first subtly and finally with the new Yorker Interview and you could find no one in the white house who would step up and defend him publicly or privately and nobody on the hill. The contrast is, of course, Jeff Sessions, who has also been publicly undermined over the last several weeks. Youve seen member of congress after member of Congress Come forward and say the president must not fire Jeff Sessions. You didnt hear anybody saying that about Reince Priebus. Rose what about general john kelly . He is considered by the president as a loyalist and someone who gets things loan doane. It has been described to me he is considered by the president to be the mv m. V. P. Of his cabi, has a cando attitude, follows his orders and imposes order to get things done. But its going to be interesting because the chaos in the white house, has come from the top. The president has been acting as his own Communications Director, as his own chief of staff. Reince priebus didnt have authority, charlie. I mean, from the start, i couldnt find anybody of a senior level who said they reported the Reince Priebus. You know, he was somebody who didnt have the authority to make changes. The president himself had to sign off on everything, and you had other senior officials who said they reported directly to the president , not to priebus. Is that going to work with kelly . If kelly doesnt get that kind of authority, will he be able to do any better than priebus at kind of dealing with those warring factions in the west wing . Thats the question. Rose i was trying to think who was the last general who was chief of staff. I guess Alexander Hague under nixon was a general who became chief of staff and went on to become secretary of state under reagan. The idea about generals is they dont have the political experience thats necessary for chief of staff to the president. That argument had been madeo the president early on, but the withinron why priebus was chosen was priebus theoretically had that kind of political salvey, he had the contacts on the hill. Key members of congress not just the speaker but key senators had encouraged the president to name priebus because priebus was someone who knew how the political process worked and look what happened, six months in he doesnt have a single major legislative achievement, health care went down in flames. So what good did it do t to have the contacts, the president said. I dont think thats the concern now. An interesting question, what happens with Jeff Sessions who has been hanging, twisting in the wind, and what i have heard is there is consideration now to moving sessions over to the department of Homeland Security, which would take him out of the russia issue which he has recused himself of, kind of do away with that issue. Sessions, from the start, immigration was the key issue. He would now be in charge of i. C. E. Under Homeland Security. So well see further changes. I dont know if theyll ultimately pull that one off because he can only appoint sessions as an acting department of Homeland Security secretary, and he would have a problem of how you replace him at justice, but i think you wil see more changes coming. Rose will general kelly be able to contain scaramucci . Great question. I think scaramucci learned a bit of a lesson this week and well see a much more low profile of Anthony Scaramucci. I think that would be happening under any circumstance. Rose the fact that the president respects general kelly so much, does that mean that he will be able to, general kelly, answer the question weve often asked, you and i and so many other people, who can say no to the president . That is a great question because general kelly is a military man. General kelly, one of the things the president has liked about general kelly is that, when he said he wants to go in a direction, general kelly executed that. I think it is very much an open question whether or not general kelly would go into the oval office and challenge the president and tell him hes wrong on something. I think that remains to be seen and also how the president would react to it. But he is somebody that the president respects and somebody who the president believes is the most competent member of his cabinet. Rose well, hes also somebody who acknowledged for making the trains run on time, as they say, having superb management skills and does not tolerate disruptive behavior. Exactly, and there has been no short of disruptive behavior in the west wing. Rose jonathan karl, its been an incredible week. Look forward to talking with you more. Thank you, charlie. Rose well be right back. Stay with us. Rose there were fireworks in washington this week from the reaction to another north Korean Missile test to the latenight failure of republicans efforts to repeal the Affordable Care act, to the earlier steps of President Trumps new Communications Director Anthony Scaramucci. Also, there was the effort to criticize the man he appointed attorney general. All of that and more from the anchor of face the nation, John Dickerson of cbs news. I am pleased to have him here. Its been a while and i welcome you with great enthusiasm. So happy to be back, charlie. Rose let me begin with health care which you followed very closely. Help us understand what happened. I think what happened is essentially you have an insoluble problem within the republican ranks, the problem with republicans and democrats is worse. On the one hand, you have conservatives who say any vestiges of the Affordable Care act left in the federal Healthcare Program increase premiums, deductibles, put too much pressure on Insurance Companies, the mandates caused prices to go up. But you have the more centrist republicans who say when you strip out all the guarantees in the Affordable Care act, you hurt the most vulnerable in the country and thats the people in the private Insurance Market but also people who benefited from the medicaid expansion. And every time negotiators in the house or the senate tried to fix the problems with one group, they exacerbated the problems with the other group, and they kept not being able to find a balance. In the senate, they could only afford to lose two votes. Thats a very, very hard thing to do. And finally, they kept trying to move it from venue to venue, and the last stab was to pass something so minimal that it had nothing in it that was specifically object bl to senators and move it to the Conference Committee where both house and senate would work it together, they couldnt even do that. So, now, it has collapsed and everybody for the moment seems to be suggest theyre going to move on. Rose so the conclusion is obamacare or the Affordable Care act survives . It survives but in a greatly weakened state, and this is what will inspire the next round presumably of health care discussions which will probably take place in a blind the scenes fashion with republicans and democrats and governors weighing in. The Affordable Care act democrats will con sued and have for a long time, even president obama conceded, has problems and issues that need to be fixed. Making it worse is the fact that the Trump Administration is not interested in supporting the Affordable Care act and, so, they are, in some cases, actively working against getting people to sign up. Well, if people dont sign up, the risk pool of people covered in the insurance is filled with sicker people. Insurance Companies Respond by raising premiums and deductibles. Once they do that people cant afford with subsidies the premiums and deductibles, they lose coverage, or Insurance Companies drop out coverage in exchanges in some stages. It is weakened conditions because of actions by the Trump Administration and something needs to be done if for no other reason to give assurances to people who are vulnerable, on the Affordable Care act and worried about their future. So that will cause some other round of this, but its not a priority, i it doesnt seem, for the moment, for the republicans running congress, because theyve got a lot of other work to do. Rose it was never a possibility that the republicans would say, we have a lot of problems with the Affordable Care act, but lets repair it, fix it and get some democrats involved and we can do something that will be for us a victory and at the same time not destroy the people who had come to depend on it . There were some republicans who would have liked that, and the number its hard to know how many in number. But the leadership of the republicans and the house and the senate did not want to do that. This was a republicanonly operation. President trump has blamed the democrats, but when you ask any democrat i talked to joe manchin on face the nation and i said, who reached out to you from the white house or the Senate Leadership from the republicans . He said, no one ever has. If you were to make a list of democrats you wanted to reach out to to make a bipartisan agreement you would reach out to manchin. He has a race in every state that voted from romney to trump, so he has voters who want to see him work with the republicans. The republicans from their side said we didnt negotiate in a fullthroated way because they talked to democrats and said you must keep the individual mandate. For republicans, the individual mandate is the central horror of obamacare. So its basically that, well, theres no point in negotiating. So there were little talks about negotiation and bipartisanship but really and also from the president the thrust of the leadership message was were going to do this on our own as republicans and just not invite democrats to this process. Rose what about the president . Did he have any impact . No. I mean, he may very well have had impact on the negative side. You know, when President Trump came to office, its important to go back and look at what he promised. He promised he would take his considerable marketing skills and negotiating skills and apply them to the presidency and on this specific issue he said he would be able to solve it like no one else could and solve it in his mind was more people would be covered, they would have better access to care and it would be cheaper. Anybody who had been involved in health care debase debates kw those couldnt be fulfilled. But the president brought his skills, marketing and negotiations. The bills discussed in the senate were wildly unpopular even within President Trumps base, sos a marketing exercise, he did not apply any of his skills at those rallies or any of the things he did to selling a fundamental idea about the bill. He just did not do that. He would say it was good, but he never went much more beyond that. As a negotiate, he put a lot of pressure on senators, more vinegar than honey, and doesnt seem to have you know, it looks like lisa murkowski, senators from alaska, was threatened by the interior secretary and that neemed to have closed her down completely, and there doesnt seem to be anybody on the senate who thinks that the president played much of a role at all, and certainly not a positive role and certainly nothing close to what he promised which is that he would use his negotiating skills honed over years of tough negotiations in real estate to break the washington gridlock and move something forward. So on his two key skills, they were not terribly in evidence on this legislation. Rose the president has said that if you leave obamacare alone, it will implode under its own weight. Well, that may very well happen. It depends what we mean exactly by obamacare. Liberals would rush into this conversation now and say obamacare was not in a death spiral, it was okay. The Congressional Budget Office affirmed that in one of their reports that they gave on the replacement legislation. They argued that basically obamacare was getting to a more stable place, but its stability requires an administration that maintains it or that at least is interested in maintaining it. One simple thing is going out and advertising and telling people, hey, its time to go sign up for the exchanges. That brings in more people, hopefully more Healthy People and their contribution with premiums ends up filling up the Insurance Company so they can then spend the money on the sicker patient. So it keeps the premiums down by spreading the risk. If you dont advertise or actively work against advertising, it changes your pool of entrants. So thats one of the many ways in which the administration is working against the Affordable Care act. So why its out there, its not as healthy. So thats, again, why you will probably see people say that the president s idea of letting it die from this sort of unhealthy state is really cruel to the people on it and who expect to benefit from it. Rose this is the big if question. If the president had started with infrastructure where he would have been able to hopefully get some democrats involved, would it have created a relationship that might have made things better in other congressional fights . I dont know. It would require a different orientation from the president. His orientation has not been what we expect even retor rhetoy from president s which is at least the rhetoric of reaching out to the other side. At least the rhetoric of we almost come together. At least the rhetoric of bipartisanship, the president s inaugural address and pretty much everything hes done is not to build bridges sometimes even with his own party. So he chose globally to not approach the presidency that way. So, on infrastructure, specifically, though, they felt they could do that larks get these other things done and democrats would have to come along on infrastructure. What we have yet to see in the Trump Presidency is the innovation and razzledazzle play on behalf of legislation we saw the president employ as a campaigner on behalf of himself. He did a lot of things that people said thats crazy and too risky, hes done plenty of those things with respect to his own personal security in his job as president. But as a salesman of policy, as a person engaged in getting his ideas passed, he hasnt done neg that is particularly innovative or surprising or that takes advantage of his unique talents to kind of disrupt and reorganize the Political Landscape when it comes to trying to sell these ideas whether healthcare or infrastructure. If there was a place he could have done it, infrastructure might have been the place he could have found his place with democrats. Democrats want unions strong in their state, too. So its one of the great what ifs. Rose what happens now to tax reform . Is it more difficult or will it be a different kind of course for this administration and the republicans in congress . You know, in talking to members of congress about this, you get a couple of answers. One is, goodness gracious, tax reform is always so difficult because so many lobbyists are engaged in gaming out the tax codes for their clients. Since money is such an important part of politics, lobbyists are often conduits to fundraising for a lieutenant of these members or other things they want, so they have a relationship in which all of the lobbying makes it hard to do anything big in tax reform. You also have an administration that is susceptible and receptivable to lobbying. There are lobbyists who work in the administration, in touch with lobbyists with respect to lots of legislation and regulatory work the administration has done. For all the president s talk about draining the swamp, there are plenty of people, members in Good Standing of the swamp who are now part of the administration. So that lobbying access to that issue could make it a problem. Now, the other side thereof, though, is people the other side of this is people say President Trump knows about business and taxes and this is something thats in his bones. Health care was never in his bones as an issue, but he has a lot of friends in the Business Community as well and this for him has a more personal feel to it. He also can speak to the public with more facility about tax rates and has some standing because he can say i was a business guy and this is what unlocks business. And if he points to the market and its success during his tenure, the Growth Numbers that just came out were quite good, he can say, look, this is what we need for the economy, and theres a real strong push in the Funding Community in the Republican Party for tax reform. So theres a lot of momentum to try and do something. On the other hand, theres a lot of momentum to do something on healthcare, too. This isnt going to be any easier than healthcare form and some have suggested that, i dont think thats the case. Rose this republican president appointed a republican senator from alabama Jeff Sessions as his attorney general. He has spent a good part of this week criticizing him, saying hes not doing well, saying that if he had known where he stood on recusing himself, he would never have appointed him, and you now have republican senators standing up and saying, watch out, we like Jeff Sessions, we believe hes a good man, hands off. Is that enhancing a split within a division between the president and the republicans . Well, in a sense, it is, although i dont know how that plays out. It is i was on the hill reporting this week, and you talk to republicans, and this is the kind of thing they bring up, and its just head scratching, why is he doing this . Almost every morning the president has woken up and criticized his attorney general, often using the kind of manipulation of the truth you would expect if it was a political campaign, in other words blaming him for things that he does not deserve blame for. Hillary clinton, for example, is one. The president said, you know, he should be investigating Hillary Clinton. Well, he cant. The rules that caused him to recuse himself from the russia investigation would also make him so to recuse himself from anything that had to do with Hillary Clinton because of his involvement in the trump campaign. Secondarily, President Trump after elected said, i dont want my attorney general to go after Hillary Clinton, its not something thats a priority for me. When i talked to him during the campaign, he said, well, whatever we would do with Hillary Clinton, it would be up to my attorney general. So theres a lot of mixed messages here. But the drip drip every day of the president attacking sessions, of Anthony Scaramucci saying you know, suggesting basically that the president doesnt want sessions to keep the job, and there is no substantive real argument here in terms of the key parts to have the trumpnda, whether its immigration or cracking down on crime, those critiques are not being leveled at Jeff Sessions. Its all about, basically, the russia investigation or what he hasnt done about investigating Hillary Clinton or these side issues. Its worth remembering there niece more loyal member of the cabinet if you measure whos out there loud and proud for donald trump when there is Political Risk to it. Rose and first. And first. At a crucial time, ted cruz was challenging in theout the collection of southern primaries during the republican primary and it was very helpful to get the legitimacy of somebody like Jeff Sessions who was a validator for republican candidates. Ted cruz used to talk ability Jeff Sessions all the time saying if Jeff Sessions and i worked on this, that means im a certain kind of republican. So getting Jeff Sessions endorsement right before those s. E. C. Southern primaries was helpful to President Trump, as a seib of the weakness of the relationship now President Trump in his interview with the wall street journal said, you know, that endorsement wasnt really that important, its not really worthy of continued loyalty. Another thing, another little tea leaf here to watch is that on friday the president gave a long speech about law enforcement, immigration, the center of Jeff Sessions job and his issues. The president didnt mention Jeff Sessions once in the speech. Rose is the betting that sessions will be fired or sessions will quit or sessions will stay . I dont know, charlie. In past years if youd asked me about the betting around a presidency, you could use signals to suggest kind of parameters of the bet or the table. But in this administration, you dont know whether youre playing roulette or poker or 21 or pea knuckle. Its hard to judge exactly what the betting should be. There are reports sessions isnt going anywhere. He gave an interview with Tucker Carlsen suggesting he wasnt going any. Where if thats the case, how does he work in his job when his crebilities are undermined by the president every day . Rose does this suggest also if the president is pushed too far he would in fact indeed fire bob mueller . It would be tricky to do. So he would have to get the Deputy Attorney general to do so and the Deputy Attorney general said he would on the do it for cause so you get it in a saturday night massacre problem where if rosen stein didnt do it, you would fire rosen stein and get somebody who could. Another cor use thing, imagine he wants Jeff Sessions gone, then the new attorney general would go through a confirmation hearing. In pushback from republicans on the hill. Senator grassley tweeted there is no more room on the docket this year for any more coffin makings of attorney generals. In other words a brushback saying you cant get rid of your attorney general because we wont confirm a new one, and whoever that would be confirmed, even if sterling of character, would have to make so many assurances they wouldnt fire mueller that the president would get out of the fix by hiring a new attorney general. So the end game is opaque here and hard to sort of figure out. Rose and then theres brushback from the military because the president in a tweet announces what he feels about transgender in the military, and the military basically says, well, were going to continue doing what were doing now and let that come up through the right channels. Thats right. And the president i mean, whenever you call the pentagon and they say go back and ask the white house, you know something has not been worked out here. Again, there is a raggedness to it and the military, while they knew the president had this view, apparently, the timing was off. There was a review going on within the pentagon, and, so, it was a big surprise, caught everybody flatfooted. Theres been a talk about leaks this week. Rose yes. One of the reasons you have leaks is when people feel like capricious decisions are being made and their voice and prospect is not being respected within the white house or an administration, so when you have moments that cause chaos that undermine the work youre doing, then you lose your adhesion to the president and to the overall cause. Theres already challenges within the Trump Administration with respect to everybody feeling like theyre pursuing the same course. So this causes even more problems along those lines and creates greater disgruntlement and creates more leaks and that becomes a vicious circumstance. Were six months in, three and a half years to go. Is there any reason to believe it will be different . Well, its hard to see how. I mean, so the hiring of Anthony Scaramucci was, you know, a bold move by the president to try to reorient things, like many president s before him he felt Like Communications was the thing that needed to be fixed. President s always think theyre doing everything fine but they just need to communicate a little better. But what weve seen is a bit of chaotic you know, the interview in the new yorker quite chaotic and creates sort of more of the same, kind of more of that unpredictable diversionary white house behavior thats distracting and detracting from the job at hand. I mean, the alternative reality that could have been followed here. There is a great piece in commentary imagining what would happen if you were trying to sell healthcare reform with a white house that thought through the strategy and what you had to do to prebutt arguments that would have been used against it and how a president ful fully engaged in selling a product would have anticipated those arguments, rallied the country behind them. None of that planning can go on. Talking to senators this week, very hard to work when youve got the president sending out three different messages. So that sense of chaos is really being exacerbated here and i dont know how it gets fixed. Rose John Dickerson, moderator of face the nation, also author of whistle stop, my favorite stories from president ial campaign history, now in paperback. Rose Jeremy Grantham is here. He is chief investment strategist at g. M. O. , the firm he cofounded in 1978. His market calls identified numerous financial say set bubbles. He warned against the dotcom bubble leading up to the financial crisis. He latest letter to g. M. O. Shareholders signaled evolving viewpoint on evaluations. As the stocked market is at an all time high he is encouraged by the forces propelling the rise and writes this time seems very different. Pleased to have Jeremy Grantham back at the table. Welcome. Nice to be here. Rose why does this time seem very, very different . Well, i am actually hard pressed to find anything that isnt different, but to start with the basics, the price earnings ratio of the market of the last 20 years has been 70 higher than the previous 100 years. This is not a small number. This is not 15 . The Profit Margins of u. S. Corporations have been 30 higher in the last 20 years. So youve had really profound shifts. I think also the style of corporate management. 30 years ago, they used to think about expansion, the market for paper would get a little tight and theyd start to open new mills. Now they think about Profit Margins more than expansion, and they use extra money to buy stock back. It works out very well for corporate offices, tends to push the price of the stock up a little bit, tends to be a little bad for a g. D. P. Growth, a little bad for jobs. But for the corporation itself, it works pretty well, and for the stockholders. Rose is it good for the economy . No, a little bit weak for the economy, a little bit bad for the economy. And, as i said, it doesnt likely generate any extra jobs. If youre focused on buying your stck back instead of expanding, other things being even, you will have slightly less growth. Rose some call that financial eng engineering. They do. Thats a good description is that and some ask the question, is Financial Engineering good. No, i think its bad. I think its understandable, its very effective for the corporate offices who are running the corporations. It works well enough for stockholders that they tolerate it, but for the man in the street, you dont have such a virile economy and it shows up almost everywhere. There arent as many new firms that get started. The number of Public Companies have halved. The number of people working for firms that are one or two years old are half of what they used to be in 1970. I think it does come at a cost. Rose so there is a disconnect between the market and Economic Growth . Yes, there is. And there always has been. Theres no easy correlation between the economy doing well and you might think there is when you read the newspaper orb listen to the news but there isnt. Rose i know people make a lot of money by looking hard at macroeconomics. Well, good luck to them. Its very difficult. And easy relationships have certainly avoided me. If you run a correlation between the countries that do well, you cant find any connection. The rapidgrowing countries of the past have tended to slightly underperform, so you might start with japan, had the best growth, didnt do that well overall, and then south korea, china today, they outgrow everybody. It doesnt mean you make more money in the stock market. In fact, you run them all together over the last 100 years. You see a slightly negative correlation. The countries that have grown more slowly tend to do better in the market. The thing that drives return is how profitable you are, not how fast you grow. Rose you like emerging markets . I certainly do. Im causing a lot of trouble amongst my fellow value managers by saying that i dont think this market is a true bubble about to blow up, but that doesnt mean i would put my money in the u. S. Market. I think emerging markets is unusually much cheaper than the u. S. As recently as early as 2008 it sold at a premium in the price earning. And it was cheaper than it had been in the crash in 2009, last year. The u. S. Priced at 11 times earnings had gone to 22, and emerging had gone from 11 to 10. So a huge divergence in favor of the u. S. And thats usually a pretty good sign you should pay attention, be ready to be a little brave, and the probability of emerging not outperforming the u. S. Over the next five to ten years is slim. It will win. Rose who has the strongest economy in the world and how do you measure it . I think, obviously, china and india have been able to outgrow everybody else, and i think thats a workable definition of a strong economy. Rose the velocity of growth. Yeah, and how many of your poor have you turned into middle class. What is the average lifestyle, whats the average educational standard, and you have to give it to the chinese. Rose thats one of the advantages of emerging markets ive always believed or understood or had read that the advantage of emerging markets is the fact that they are creating a middle class which provides a consumer for an expansive economy. Absolutely. And along the way, what should scare us a little bit is the success particularly of the chinese of educating their average workforce. Their recent scores in math are higher than the u. S. Not only are they onethird the price or onequart the price, but theyre actually more skilled in basic quantitative methods. This should make us nervous. It makes me nervous. Rose exactly. It makes people in Silicon Valley nervous, too. I think it does, yeah. Rose can you make the argument that, over the long run, whatever the long run is, those countries that dont have a highlyfunctioning democracy will be, in the long run, restrained in terms of their prospects . Thats certainly a widelyheld view. Rose i know. And i have this view about capitalism that it does millions of things better than other kind of topdriven rose economic systems. Economic systems. But one of two things it does very badly if its very longterm, capitalism is not really suited to that. They have this discount rate problem whereby anything that happens out 20 years doesnt seem to matter. Rose yeah. And the chinese can deal with those problems much better. Today, the real threats tend to be longterm issues such as Climate Change or population, and how do you deal with these problems which are what economists call externalities, mainly. How do you deal with overfishing . How do you deal with protecting the quality of your soil . There are societies, i think, can and are handling it much better. They respond to Climate Change much more quickly and more seriously than we do, and they have much greater respect for science. So i think the pendulum that was completely rose before you say that, they have a much greater respect for science. Yeah, they do. The chinese regime before this one had nine out of the top ten guys had ph. D. S. So i went to a little trouble to find out how much ph. D. S we had in the whole of congress up to the presidency, and the answer came back, maybe one and a half depending on how you view doctorates. Rose yes. This is a large comparison. Rose it is. What do you think of President Trumps emphasis on deregulation and using the powers he has either through congress or through asked executive order . I think the drift to business and American Society is the drift to more Corporate Power in politics and through m monopolis and so on, and less to the workers and the destruction of the unions and the income inequality where we are 20t 20th out of 20 rich countries. We are the most unequal society. Also, the speed with which you can move from one economic class to another. One always used to think of america as being extremely mobile. Were the stickiest. Were the most difficult society in the developed 20 countries rose to go from lower class to middle class. To go from the lower class to middle class. And this is absolutely a longterm threat to how virile a capitalist society can be, if you suppress the ordinary worker. Since 1970, the average hourly pay adjusted for inflation has not changed. In france, i bring up france because, ever since i have been here for 40 years, if you read business week, you think we have been kicking their bottoms. But their average hourly pay is up 140 . The poor old brits is up 65. The japanese up 80. And the u. S. Hourly wage, the average of all hours worked, has not changed since 1970. I mean, this has been a tough era. And why wouldnt the workers be upset . Rose and why wouldnt politicians understand and see that and respond to that . And, yet, wouldnt you say, if you look at actually what is happening and what is being proposed, that this is the complete flowering of corporatism, it is the complete domination where people from a particular industry are appointed to run the regulatory body that is meant to protect the general people from misbehavior of the Drug Companies or misbehavior of the fossil fuel companies, and they have been taken over by the corporations. Rose when you explain these views to your friends either in the Corporate Community or the financial community, do they applaud . They hate the topic, step one. But step two, most people get it that things are not working quite right. Rose and theyre realistic about it . And they are i wouldnt say fully realistic, but theyre beginning to realize that we have overdone the move to corporatism. They run congress, i think its fair to say, and this administration is, perhaps, as i say, the flowering of that wave. A good society will have these waves. You move towards capitalism, you move back towards the worker. Capitalism was the top dog back in 1880, the guilded age, and then gilded age, then a combination of a couple of wars, f. D. R. , depression. And from 45 to 75 we had the golden era of equality where everybody benefited from productivity, Pension Funds were started, the workers made huge advances, educational standards for ordinary people went up, and the g. D. P. Was handsome. Then from 75 to 85 began to get a little stickier, and after 85, its been pretty much Corporate Power increasing all the time. Rose in 1995onward, you had the arrival of the internet in terms of its exposure to a Broad Spectrum of america. How has that changed all the things that you are talking about . I dont know. Rose some say its giving power to individuals. When the smoke clears, all these new technologies seem to increase the power of the elite, of the technologically gifted, and you see the development of new corporations that become worth scores of billions in a handful of years, and they seem to be largely irrelevant to the average worker. Rose let me pose this question donald trump is the champion in many ways of the people youre talking about. He proposed that he would be the champion. Thats absolutely fair. Rose well, they voted for him. And they accepted his proposition. Rose yes, and his agenda. His antitrade, antiglobalism. Yeah, he was the one who picked up on their frustration, and i think its fair to say that hillary did not. Rose lets treat this hypothetical donald trump says to you, look, you understood what i did in the 2016 election and how i got elected, now i have the power and a congress controlled by my party in both the house and the senate. What should i do . How would i take an election which has put me in this oval office and make the kind of changes that you believe are essential . He differs with you or environment, clearly. He differs with you on probably a lot of issues. And i should say up front, aim oneissue and i should say up front im a oneissue voter. I would vote for almost any president who had a brilliant Climate Change agenda rose because you think its that essential . Because us the that essential. Having said that, its clear that the Current Administration is not going to further income inequality. All of their proposals, so far, have been Tax Deductions for the rich. Youve probably heard Warren Buffett saying that the first of the proposals for a change in the healt healthcare amounted to millions of dollars of tax savings for his friends, hundreds of thousands for him, and the loss of 20 Million People being insured. This is exactly the opposite. Deregulation deregulation is a huge help for corporations and, in the end, a threat to the general we being of society. If you free up coal miners so they can pour acid down streams in west virginia, we which is what has happened, you make it easier to have methane leaks in the fracking business, et cetera, et cetera, it makes life easier for them, fewer forms to fill out. In the end, you have to ask the question, if left to their own devices, do Chemical Companies protect the environment, protect the general public or do they try and maximize their profits . Rose would you make an investment in a company who you didnt approve of whatithey did but you approve of the profits they made and their potential growth in stock and equity . Yeah, its kind of an unfair question. If youre managing money. Rose we ask that questions of universities today. Absolutely. But if you manage money for institutions as we do, were just the agent, we have no right to impose our personal values on them. We dont have the right to vote for them. They should make up their and they do, in many cases, they make up their own mind where the lines are they would draw in the sand. Its not for us to do that. Its up to us to listen to what they want and then make as much money for College Endowment as we can within their constraint, not hours. Having said that, theres nothing to a stop me as an individual writing a quarterly letter saying, hey, guys, pay attention, the environment is important and will play a great role in your portfolio whether you like it or not. There is a great opportunity for american universities to take a possession leadership position which they have not taken yet. Rose if you have the environmental views and you have and the majority of americans do have, that we can overcome america leaving the paris accords is this. I think you see with the cities, and bloomberg, of course, has done well here, but the cities, the states, a loft corporations a lot of corporations rose right. Without, obviously, intending it, i think President Trump has galvanized the Environmental Community in a way i would have never guessed. Hes galvanized the rest of the world. Its a twofer. We have all the other countries pulling harder on climate, talking about it more. The thing that really disturbed me for years was how low on the agenda Climate Change was, given its significance, given the fact its the only threat to our existence that there is, really. Rose in fact, if you talk to people in the National Security area, they will tell you climate is a National Security issue. And thats very encouraging. For the last ten years, i have been amazed its the u. S. And u. K. Militaries who most understand not only climate but resource issues. They understand that this is what will cause the problems in africa and europe and the far east as you go out in decades, and they should think about this, and they do. And in my opinion, for at least ten years, they have come to exactly the right conclusions. But how low this thing was on the agenda of the general public and politicians is shocking, and what has happened with paris is that its moved the issue, hasnt it, up the agenda. It is more talked about and more talked about in the papers. Rose that, true, and its also given an opportunity both in terms of t. T. P. And in terms of the paris accords and other issues, its created a vacuum for other countries to move into in terms of global leadership. Absolutely, and china is not going to miss this opportunity. China has some fiendish advantages, really. It saves 50 of its g. D. P. Almost, and we save relatively little. So we have an embarrassing lack, really, of Capital Investment and they have an embarrassing surplus of savings ready to invest, and Climate Change is about making this huge shift to Renewable Energy, and Renewable Energy is about capital. You build a solar plant, and then its free. Electricity is free for 30, 40 years. You build a windmill, its free for 30, 40 years. And if you have if you are long capital, china can move and convert from oil and gas and coal, above all, to wind and solar and storage and transmission, and they will. Rose yeah, when they fix the battery, they will have it locked. And they will come out of this with the Cheapest Energy of a developed country and the cheap labor and well educated labor. We should start worrying about the advantages they will have. Rose its great to have you here. Thank you for coming. Great to be here. Thank you. Rose pleasure. For more about this program and earlier episodes, visit us online at pbs. Org and charlierose. Com. Captioning sponsored by Rose Communications captioned by Media Access Group at wgbh access. Wgbh. Org rose funding for charlie rose has been provided by and by bloomberg, a provider of multimedia news and Information Services worldwide. Youre watching pbs. Man its like holy mother of comfort food. Ion. Kastner throw it down. Its noodle crack. Patel you have to be ready for the heart attack on a platter. Crowell okay, im the bacon guy. Man oh, i just did a jig every time i dipped into it. Doug . Which just completely blew my mind. Woman it felt like i had a mouthful of raw vegetables and dry dough. Sbrocco oh, please. I want the Dessert First [ laughs ] i told him he had to wait