Hot Money (2021) - full transcript

It's a free market economy

but it's also a

national security issue.

- Okay well I tend to think...

- You're going to be an independant

country, you need to be

independant of food.

I tend to think of

climate change

as a national security issue.

I do too.

They're not gonna

be able to do it

in time the way

they're doing it.

- And every time, well.

- Recognize and adapt

and change policies...

Okay, let's...

Let's look at ourselves

right now, okay?

Let's say this road we're on

is the American

political system.

And you see past

that bridge up there,

we have to get past that

bridge in the next minute,

except this is

what we're stuck on

because we can't get there.

And you know this

as well as I do.

I know people in

their 20s and 30s

that will not have kids,

because they're like,

"I'm not gonna subject a

human being to what's coming."

Do you think my children

who are 15 years younger

than that are somehow gonna go,

"God I always wanted

my kids to grow up

in Mad Max eating

lizards off the road

and murdering their neighbors

to get a glass of water."

I mean, things are

gonna break down.

Wesley

the passion that you

and so many others

have on us this

is what gives me

hope in democracy

and hope in the

future of the country.

That's what it's gonna

take to make change happen.

I think we're

living in a rigged system.

And I think it's very hard

to break out of that rigged

system because money talks.

- I drove down from San

Francisco yesterday on Highway Five

and it's bumper to bumper

for 300 miles on

Highway Five.

And you can think, God, that's

just a small part of it.

So we know in these

big urban areas

like the Los Angeles Basin,

metropolitan New York,

we know that, we live

here for convenience.

We live here because

civilization works,

but we also know it

is relatively fragile.

It depends on power,

it depends on water.

It depends on food, it

depends on warehousing.

It depends on security and

people following the rules

and obeying the laws.

And it only takes small

disruptions to that.

Whether through natural

disaster, through climate change

through organized

crime or through war,

through exogenous forces.

And you'd see catastrophe.

It's easy to

see how things can fall apart,

Long tunnels are now pitch dark.

Communications and telephone

systems have collapsed.

On motorways cars

simply pull over,

if they find a

place with a signal.

People now stand in line

outside supermarkets,

not to go in,

they're just hoping that

it will eventually open.

Combination of the weight

of scientific evidence.

And the dynamics of the

financial system suggest

that in the fullness of time,

climate change will threaten

financial resilience

and longer term prosperity.

All the money in the

world will not save us

once it starts to fail.

And then people will discover

that you can't eat

a flat screen TV

and you can't eat a

German luxury car.

What are we gonna do?

It's war.

And it's a much more serious

war than World War II

because if we lose,

we're all dead.

I mean, you'll already be dead.

So maybe it doesn't

concern you as much

but I don't want my

children to starve to death

You're writing me

off really early.

Please don't write me off

so early.

All right, 20 more years

Looks good doesn't it?

It does.

It's a great part of America.

It's like an American icon.

My generation was

the Beach Boys.

Yeah.

Surfing USA.

Yeah.

So, you know, tourist heaven.

Yeah.

But if I were a tourist

from another planet

and I was like, "Hey,

let's go visit earth."

And then my travel guy was like,

"well it's populated

by about 10 billion carnivorous

apes and they're armed."

- My goal is to see...

- Let's give you 20 more year

Is to see your children

grown, educated, married

and I wanna have

great-grandchildren, that's my goal.

Okay, if you wanna

have great grandchildren,

what you have to do is

you have to help build

that environment that

they're gonna survive in.

I want you to see the

facts as they appear to me.

I'm a national security guy.

That's what I've spent

my life working on

trying to protect

America, the constitution,

the way we live and our futures

for our children

and grandchildren.

I love my dad we're both

concerned about security.

We're both concerned

about the future

but there's definitely

a difference

in the generational

perspective of this.

Now I understand his generation

because they grew up,

right after World War

II, the baby boomers.

They grew up in a world that

was constantly improving.

More rights, more money.

The economy constantly expanded.

They saw us go from fairly

primitive industrial society

to what we have today.

There've been empires

that formed and collapsed.

And about 200 years ago,

mankind suddenly discovered

how to take energy more

effectively from the earth.

In the start of

the industrial age.

And it was coal

and it was England.

And it was a steam engine

that could use that coal

and it spread throughout

the whole world.

We have taken that energy

and built this

civilization from it

and the price that's being paid

is the carbonization

of the atmosphere

and climate change.

Yeah, that's the finale.

You know, when you

say in World War II,

everybody chipped in

and did their part.

And that was

seventy-five years ago.

Now we've been involved

in so far, a 19 year war.

And in that 19 year war,

we were told to go shopping

and to buy more stuff.

We were never told

to save anything.

We were never told to

contribute to a war effort.

They even cut taxes

when we went to war

That's right, twice.

Twice.

With gambling, the house always

wins and it's a rigged game.

It just is.

Not unlike the banking system

in our political

system nowadays.

It's all rigged. People don't

have an actual

choice in a lot of stuff.

Yeah, people have a

choice to go to Vegas.

When you ran for president,

I drove all over New

Mexico and other places.

All I could think

in 2003 was that,

we can't actually

build an economy

off stripping, gambling

and crystal meth.

And we've made a concerted

effort to do that

in this country for

the last 20 years.

You know, our business

caters to what people want.

American societies produced

enormous amounts of leisure.

They've tried to recreate

the feel of the Roman Empire

in the heart of Vegas.

And interestingly it's

like late Roman Empire.

So it's right, as

everything collapsed.

We have the smarts

and the know-how

and the conscience to know

we have to sustain

and protect this earth

because this is where we live.

So we love civilization,

but we've got to change

the way we're approaching

our economic endeavors.

The world is suffering

through the worst financial

crisis since 1930s.

There's been a

lot of damage done.

They hear $700

billion package,

and they immediately

think the next day

everything is gonna be better.

You're witnessing

so much wealth loss.

If you connect

the financial system

to the other possible

shocks that are out there,

you realize it's,

we're walking on ice.

Panic coming

through the phones,

on the floor, traders

just trying to rush

to get to the point of sale,

to get rid of their stock.

You know,

what people built up

over years and years and

years, has been erased.

At some point, you run a

risk that something goes afoul.

We're worried about Greek debt.

We're worried

about Italian debt.

Spanish debt.

I mean and so far, you

know, it's been finessed,

but, and you know,

you can't see what the U.S

Treasury is doing behind.

We're doing a lot with

the U.S Government

to keep the system working.

And you just don't know

what the limits are.

So if you think,

how can we lead the world

in fixing the economy

and fixing the climate?

You have to make

the investments now.

Because you can't wait

till you're like Somalia.

I mean, you may notice

Somalia doesn't have a lot

of infrastructure programs

that they fund.

They're not pushing the

boundaries in technology,

and that's not because

people in Somalia are stupid,

it's not just because they've

lived under civil war,

it's because they

don't have capital.

They don't have resources.

Capitalism is an

economic organization.

It's a way of

organizing the economy

that is focused on trying

to create future returns

over and above of the

investments I make today.

So it's all about expansion.

It's all about making

more in the future

than we currently have.

When you borrow money,

well, what happens is,

the banks would like

to charge you interest

not only for the risk,

but because they want the

capital to come back with babies,

not just to go and that's it.

Because they want to make sure

that capital is increasing

and that's how you build wealth

and that's how you

increase your assets.

And it's that debt

that has enabled

all of this to be here.

It's the accelerant

to economic growth.

Now, as long as the company

can service that

debt, it's okay.

But consumer debt,

if it can't be

serviced, is a problem.

Mortgage debt if it

can't be serviced,

as we've seen is a problem,

and national debt, if

it can't be serviced,

can be a national

security threat.

Alexa, how do we avert

a financial crisis?

Here's something

I found on Wikipedia.

A financial crisis is any of

a broad variety of situations

in which some financial assets

suddenly lose a large part

of their nominal value.

Preparing for the future,

when the future is unknown,

is obviously difficult,

but we are today taking steps

that are clearly going

to make things worse.

Finance is really

making big bets

on an uncertain future.

And you wanna be careful

about making too many bets,

especially when there

is some indication

that the future might be very

different from the present.

So much

of our energy's caught up

in the financial system

that we've neglected the

investment in real things

that are required to

take the country forward.

We do, we haven't really

come to grip with this yet,

because the economic system,

the political system just

doesn't wanna face it.

The economy has grown,

but debts, indebtedness

of households,

firms, banks, governments,

the debts of all these

actors in economic system

have increased

much more than GDP.

Really?

Yeah. So let's say,

I think maybe in

the 1970s or so the,

total debt of all these actors,

households, firms, banks,

government, the total debt

to GDP ratio was maybe of,

of the order 120%.

And now that has

increased very steadily

over time to about 290%. So...

So if no one got

paid for three years

and continued working

the whole time.

Exactly. Yup, yup.

And didn't eat or

drive cars or anything,

we could pay that debt?

Yeah. Yeah.

But does the debt matter?

Well, I mean, the

debt matters to some,

to the extent that

we have a system,

it is called capitalism.

And in that system,

laws are telling us that

debts have to be repaid.

How much debt do we need

to generate $1 of GDP?

For the economy to create

one extra dollar of income,

we need, we are relying

on $3.30 of extra debt.

An income is basically

wages plus profits.

That is what GDP is, you can

also call it differently.

You can say it is value added,

created by producing stuff.

And as a result of

emphasizing on the GDP,

we've ended up in a situation

where the market is going on.

There is some selling,

there is some buying,

but we really don't know

how well people are doing.

You know, when

we were kids, $1 of debt,

pretty much created $1 of GDP.

Oh wow.

So, you know, it's

like Keynesian economics,

you put the money

into social projects

and it recycles back

into the economy.

But today it takes

more than $3 of debt

to produce $1 of GDP.

And that's all occurred

in the last like 30 years.

Wow.

So in order to

create more money,

you've gotta create more debt.

Three times as much debt.

That's insane.

More than three

times as much debt.

It's that access to

credit and the kind of ability

to take on lots and lots of

debt that hasn't been able

to sustain this kind of

trend in consumption.

So there is a very,

very strong relationship

between increases in income

and increases in

carbon emissions.

In the U.S, which is

already kind of the most

disproportionately

high energy producing,

high consuming country per

capita spending grew 42%

overall from 1990 to 2008.

With a 300% increase in

spending on furniture,

an 80% increase on clothing

and a 15 to 20% increase

on vehicles, housing and food.

Despite the fact that

wages were pretty stagnant

over that time period.

So this is the

Wall Street Bull,

which is a symbol of

a positive market,

which means more people

are spending money,

than spent it the day before.

Our democracies basically

have become dependent

on the idea that there will

always be more to go around

that we can expand,

expand, expand.

We know that there's

fundamental uncertainty.

We just don't know what

the future will hold.

Over the course of my career,

I've worked in

mathematical modeling.

I was a space physicist for NASA

and I was on pretty

big projects.

I was on the Hubble Space

Telescope team as a scientist.

I was on mission to Mars

as a space physicist.

And so I'd worked on in

some pretty big areas.

When people say, well,

how do you know that the

climate models that we have now

will be accurate

in 30 years time?

What I can tell you is that

the models that we were working

on 30 years ago are actually

unbelievably accurate.

What's happened

with the atmosphere,

is we're seeing this type of

instability, kind of like,

you know, if you had a

top just standing there,

it'll just fall over.

And so you're

seeing that type of,

that type of wobbling

and instability.

I don't exactly know how

unstable things are going to be,

but to me, it's the

volatility and the instability

that's even more

concerning than just

the pure temperature

rise over time.

Let's say that inflation

were to go over the top,

stock market crashes.

Let's say there are all kinds

of sanctions on exports.

You can't even export your tech.

You know, all you're left with,

to survive is you

and your environment.

You know, one of my goals

this year was actually

to get more educated

on climate change.

And I took the path

that I was gonna see both

sides of the argument.

And what was interesting

to me was I could find

very little in the

climate denial space.

The more I read, the

more I see around me,

the more I get concerned.

The officials

came out and said,

we're gonna have to

release the dams.

And I remember

looking at my husband

and looking at my daughter

and the dog and the house

and thinking, am I in

the middle of some movie?

So I'm 5.8.

And the water reached

to about right there.

Until it happens

to you, you don't,

you don't believe

that this can happen

in the United States of America.

And all of your financial

stability is gone.

So if we have, God forbid,

any other emergency that

comes up and believe me,

that is a source of a

traumatic kind of panic

that sets in when we go, Oh,

you know, what if

something happens,

what if there's

another emergency that,

that arises, then

we have no funds.

Never did I ever

imagine that everything

that I would work so

hard for would be taken

from me in a matter of hours.

And so I do believe

that climate change

is going to have a

huge economic impact.

And what wealth you

have can be eradicated

in a matter of hours.

We had a house

up here on the hill

that my wife wanted

to get out of

because it was dangerous

for the fires, you know.

Yeah.

And the climate change,

everything's getting crispy,

so we'd better get,

to somewhere where we're

not gonna get burned up.

Yeah.

So we moved to

this beautiful place

and the fire didn't get us.

But the debris flow after

the fire wiped us out, man.

We had like mud four

feet here, huge rocks.

You were here, right?

- Oh we were.

- How did you get out?

Rescued by helicopter man.

Jesus.

I said, you know, I said,

my wife, we, you got a sheet?

And she said, yeah.

I said, what are you

gonna do with the sheets?

I said, I'm gonna write,

help out there, you know.

She said maybe make it SOS,

I say that's a good idea.

Went out there and

drew SOS, in the mud.

And pretty soon,

They come, they let a

guy down, and they said,

we weren't sure if it was

a SOS or an area code,

it looked like it

could have been 805.

And I said, well I gotta

work on my esses man.

But we were lucky, you

know, we could afford to...

Well people died, people

died in this, right?

Oh! Terrible, people were

washed right through our place.

And we were the lucky ones.

You know, we had the money,

to refurbish this place.

I know, yeah.

But you know, imagine,

people, you know, struggling

all over the world

with this climate change.

That's the way It starts

it's, you read about it

and It seems far away.

But then something happens

and bang it's right on you

- and it gets very personal.

- That's right.

Hey, I hope you went

quick, that's all I can say.

I hope you went quick.

Oh my gosh.

Words can't describe it.

Words can't describe it.

Global systems of finance

are deeply connected

and based on housing finance

in places like

the United States.

So if you get in a

situation where a homeowner,

can't, can't pay an

insurance premium,

can't hold on to their

mortgage, for that reason.

Defaults on a mortgage,

goes into foreclosure.

You have kind of, your

setting in motion,

the sort of early

parts of the story

that we know is a very familiar

one from 2007 and 2008.

And we're not

particularly good,

at preparing for difficult

times way in the future,

when in fact we've got

difficult choices right now.

When you survey

people in the U.S

and in the UK about sources of

stress, it's work and money.

Alexa, how do I solve

our economic problems?

Sorry,

I don't know that.

We're heading off the cliff,

in terms of climate change.

There's a real urgency on this

now that cannot be denied.

I grew up in the heart of the

military industrial complex.

My father became a general,

after I went off to college.

I went to the foreign

service school at Georgetown.

Madeleine Albright was one

of my advisors in college

and I thought, I know

how the world works.

There are people in charge.

There's some with a plan.

There's someone running stuff.

When my father was head of

NATO and I got to go over there

and visit and hear the kind

of questions that senators

and congressmen

were coming up with.

I realized, whoa, no

one's running anything.

And the mistake that the

great majority of us make,

is that, there are groups

of people running things.

Someone has a master

plan, there's a cabal

or a conspiracy behind

it all that's running it.

And it's just not the case.

Hey Wes.

How was the conference?

Good.

Good.

No, I think,

well I think they,

I think they really wanted

to hear what's going on

and what the challenges are.

Yeah.

And that's what I gave them.

Kind of reading this thing

about Venezuela you see.

What happens when an

economy collapses.

Total collapse.

I mean, is it, was it just

initially the oil prices or...

They've tried to make

it a populist democracy.

You know, where now

Maduro is, is a dictator,

but you know, supposedly

people like him,

but in an actual

fact Cuba's in there.

And I was down about six

months ago in Colombia.

And they were telling

me that actually,

the Cubans are going up

to the Venezuelan army

and they're disarming them,

because they don't

trust the Venezuelan.

This is the way you

take over a country.

You're getting rid of,

you know, you put your

security forces in,

and then you build up

your extra military force.

And then you go to the military

that might be loyal

to the country

and say, give us your weapons.

So a lot of Venezuelan

militaries become refugees.

Oh wow.

They were disarmed and sent

out of the country, yeah.

And there's millions of

people that are just there.

They lived there,

they were born there

and they're

struggling to survive.

It's a, I mean, we're heading

in that direction already,

before we've even had

the economic breakdown.

With armed groups

in the streets.

You had 20,000 armed people

in the streets yesterday.

Well that was just

a demonstration.

Brought guns, you don't

bring guns to a demonstration,

unless you're demonstrating

you'd like to kill people

that don't agree with you.

Venezuela can be an

example of what happens

when civil society breaks down

because you don't have stable,

transparent rule

of law government,

and you don't invest in your

infrastructure the right way.

In many ways, Venezuela

is a leading indicator

of the challenges that

will face the whole world.

Many like Erin

Burgos feel they have no choice.

What was once one of Latin

America's wealthiest countries,

is now its most

chaotic and dangerous.

But that's what happens

in these countries.

But by these countries,

you mean countries

that have incompetent

leadership.

Countries that are failing

to take care of their people.

But they compensate for that by,

setting up repressive

mechanisms,

to ensure that they

stay in power.

I just worry about it

happening in the United States.

We have a country like

Venezuela where the first thing

that collapsed is their

energy infrastructure.

- Yeah.

- And then now we're finding out

that it's not just electrical

and oil pumping now their water

infrastructure is collapsing

and this is a country

that's tropical,

that's filled with water.

The energy sector has

not received the training

or investment it needs, and

the experts were kicked out.

They said the energy sector

in particular the oil

sector is collapsing.

And that was a major source

of revenue for the country.

At the same time, you have

significant drought in a country

that has a lot of water,

which means the

dams cannot produce

the same electricity

as they used to.

So you have collapse of

the electrical sector,

along with the oil sector,

along with civil society.

And this means you also have

collapsing water infrastructure,

because even if

you have the pipes,

if you don't have electricity,

you can't operate everything.

So severe strain, which

means food shortages,

riots, lack of money,

this is a major problem.

United States and

Europe is rich,

but if we choose to under

invest in our infrastructure

and if we choose to not

prepare for the future,

we could suffer these

kinda consequences as well.

The impact of climate change

is not a straight line function.

It's clearly

a progression that

is accelerating

in magnitude very dramatically.

And so any lapse at

this point in responding

is going to have, I

think, a critical impact

down the road, much sooner

than we would anticipate.

This is a crisis

waiting to happen.

It's a slow moving crisis

in front of our eyes.

So when you see in a movie,

an asteroid's gonna

hit us in six months,

but Mr. President

we've been working

on this potential

problem for six years.

In real life the asteroid

takes everybody out.

The same goes for

climate change.

The same goes for a whole

host of issues we have

because when people

see something on TV

and look, politics

is a confidence game.

When people look at the

politician and they go,

he must know what

he's talking about

or she must know what

she's talking about.

That doesn't mean there's

an actual plan with any kind

of systemic machinery behind

it to produce results.

As the water start to recede

the financial costs will add up.

Are you tired of living

in a home like this

when you really wanna be

living in a home like this?

Let's check it out.

We've got tons of

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♪ The cho...

For those of you that

went to the mountain

and enjoyed that 16 feet

of brand new, fresh powder,

nice job.

But as you can see, we've

got a hot front coming in,

so tomorrow there's gonna

be 155 degrees Fahrenheit.

So you might wanna

break out those Speedos.

You read the big

article about Peter Teal,

who's the guy who's made

the big fortune off tech,

has bought and built bunkers

in New Zealand, right?

Because their plan is

we're all gonna die,

and then they're gonna

ride it out somehow

even though they won't.

But there's the belief that

their money will insulate

and shelter them

from what's coming

and for all these people...

For climate change

Who predicted doomsday.

Yeah I mean, I've

heard, you know,

I've heard climate change

likened to a world war.

You know, the difference

is that we know a lot more

about what's coming.

Come on down to our

luxury survival condo

and don't let the

Armageddon get you down.

So unless you can

produce thousands of years

worth of water and air and food

in your underground bunker,

you're not gonna make it.

And the most likely

outcome will be that

the construction workers

probably non-union

that you paid to build

this bunker for you

know exactly where it is.

And they have access to all

the tools to dig you out of it

like a truffle.

The sooner people start

using their money as a tool,

instead of a goal in life,

the faster we're gonna

be able to dig ourselves

out of this hole.

Okay, so dad, we've,

I know you don't

wanna pay attention

- and you don't wanna be...

- I do.

Filmed with miniatures,

because it could, you know,

you don't wanna look like

the guy in Dr. Strange Love

or any other...

Exactly.

Retired General

playing with things...

That's exactly

what it looks like.

But, look, we need

to set up something

that people can

understand how it works.

We have like a grocery

farmer, another store here

a bank, a homeowner, and

then emergency services

and over here's like nature,

or we'll even say

foreign country

or Africa, or somewhere else.

So, but the first thing

I gotta do is change

how everything's set up,

because we need the bank

in between

the country club

and everybody else.

We have a huge financial

system compared to what the,

what I can call the real economy

that is where people work

and produce, and live.

What we were talking

about was trying to explain

capital, structures

and insurance

and financing and mortgages

using children's toys.

So we have money...

Is it gonna work?

I don't know if it's

gonna work.

First thing is, the

grocery store is a business

and it makes money,

and they deposit the

money in the bank.

Okay. Boom.

Okay?

John works at the grocery store

and he gets paid by

the grocery store

and he decides he

wants to buy a house.

Okay.

He doesn't have enough

money from his earnings

to buy a house, but he goes

to the bank and the bank said,

"Oh we'll give you the

money, to buy the house,

and in return, you'll

give us an IOU."

We have to look at the house

is it, does it pass inspection?

Yeah, pass inspection.

And can you afford it

based on your monthly income?

Well,

The answer, say yes.

- Yes.

- Okay, good.

So here's a mortgage.

Okay, so here's the money and...

And by the way, this is just

like a real bank,

because in the real bank,

they're not sure can

this guy pay for it?

Just tell him yes, tell

him yes, come on,

- lets get the money.

- So it depends on paying.

We typically think that

bank takes deposits from us

and then lends it out.

The balance sheet equates

one entry on this side,

another entry on that side, has

sort of claims to come back,

and if it's really

comes back as expected,

they make a return on that.

And it's basically making

money out of thin air.

In the old days,

I would put this

mortgage, and I would say,

"This is an asset for me,

"because you're gonna

pay me every month

"to pay this

mortgage off," right?

So you're telling all

your buddies you had that.

Well, I found a better

way to make money, okay?

So the bank takes the IOU,

and the bank sells the IOU

into the what's called

the secondary market.

- Okay.

And it gets a fee for that.

Then once I have this

mortgage and maybe the mortgage

for many other houses

in the neighborhood,

and ideally from other

neighborhoods as well,

I throw this into what we call

a special purpose vehicle,

which really, in legal

terms, is typically a trust

or a corporation, these

assets-shielding devices,

and then you issue claims

against these new legal

shells to investors.

They package these IOUs

up so there's many of them,

and they sell them to people

like insurance companies

or foreign banks, and

they can be leveraged.

Which means I can make

loans off these things,

which are loans.

Yes, because you

have leverage here.

So you can make more loans.

So the system always

generates cash.

They can reduce their risk

because they're not

just buying a mortgage,

they're buying a

package of mortgages.

In some cases, they're

just buying a slice

of the interest rate off

a package of mortgages.

And so, all of these

are called derivatives.

And everything works, as long

as there's an expectation

that the loan will be repaid,

that John will, at the

right time each month,

give the bank money to pay

down his share of the IOU.

So the old way the

banking system worked,

it used to work that the banker

would look you in the eye

and say, "Are you credit worthy?"

"Can I trust you?"

The banks really

aren't keeping

the mortgages on

their books anymore.

They're selling those mortgages

so that they can be repackaged

as other kinds of

financial instruments.

So, they're able to

sort of pass the buck,

pass the risk off

to the next person.

Depending on how they're

rated by the rating agencies,

these are reputable

investment opportunities

for retirement funds, sure.

Yeah, pension funds,

sure, put 'em in here.

So the investors

are buying an interest

in the cashflow that

comes from the homeowners

into the pool that

we've created,

but have sort of a claim

against this house as well

because this cashflow is backed

by the mortgage

against the home.

So something as

illiquid, as formidable

as this building and

the land it stands on

can become a globally

tradable financial asset

through appropriate

legal coding.

This is your loan.

It travels through this system.

The bank has the loan,

Sells it, it becomes a security.

It becomes part of

the balance sheet

of money market mutual funds.

These money market mutual

funds then basically exchange

your loan, your

collateral, your house

in a collateralized cash

deal, and the whole purpose

of both the cash and the

collateralized cash deal

is that it allows

the various actors

to operate in derivative markets

and make very high rates

of short-term return.

Today, debt is

treated like an asset.

It can be traded

globally, right?

So we made a huge jump from

let's say the 12th century

when the first assignable

notes came about,

to treating debt as an asset

that we can just trade

on a global market.

At the bottom,

there's tangible value.

The same value is used, not

just one time, but two or three

or four times in the

financial sector trading.

It is not going for productive

investment in firms.

It is also not going

to finance and fund

climate change mitigation

and de-carbonization.

Money creates more money.

Wealth creates more wealth.

And this is a circle,

and it just rolls on.

At the end of the

day, it's our houses,

the value of our houses,

which are backing this up.

The IMF has called it "the

shadow banking system."

"Shadow" here doesn't

mean that it is illegal.

It also doesn't mean that it

is necessarily shady and so on.

It is just that it is shadow

because there are no rules.

It's hardly any rules.

It's sort of almost the Wild

West of the financial sector

And a problem with

the derivative market

is there is no market.

So it's like one-on-one

swaps between bankers.

It's like you and I say,

"Hey, I know what bank

you're working for,

"and so I've got some bonds,

"and I want you to

insure 'em for me

"in case the interest

rate changes.

"Would you insure

these bonds for me?"

"How much would you charge?"

You tell me a price.

I say, "That's a good deal."

"I'll get a bonus for

setting up the insurance.

"You'll get a bonus"

"for taking in the money

to do the insurance."

But I work at

a different bank.

It's a good deal.

And I heard you

just bought those.

And I figure I could

also get those,

'cause I know a guy in

Saudi Arabia or China

that would pay two cents more,

and I could make

50 grand off it.

You wind up so far

from the underlying.

The thing is, it's like the

old insurance principle, it's

"How many people can insure

one person's house"?

Can each person in the

neighborhood put a $100,000 policy

on that house and each

person collect $100,000

when the $100,000

house burns down?

As Americans,

we're shortsighted,

and we don't think long-term

and financial literacy

was not this complicated

100 years ago. You had

a little bit of money,

and probably didn't even

have a bank account.

You paid your bills, and

you passed bills around.

And you kept it

under the mattress.

Right, or you kept

it under the mattress.

Shh, that's not where mine's at.

The critical derivatives for

our financial markets today

are actually the ones that

brought down the financial system

in 2008 were the

credit default swaps

and the collateralized

debt obligations.

And the credit default

swap is basically

a kind of an insurance contract,

which basically says, "If

some assets in the markets"

"decline in value, the

insurer has to pay me a fee."

And the beauty of the CDS,

the credit default swap,

was that you didn't have

to hold the asset yourself.

It's like me taking out

a fire insurance on

my neighbor's house,

and if that house burns

down, I get the premium.

The value of these

financial transactions

is much, much larger than

the tangible, real capital,

which is basically the

houses of the families,

the households,

the notional value

of the derivative

market is $600 trillion.

And that is about let's say,

eight to 10 times as

large as global GDP.

So an American city with

how many trillions of dollars

of real estate

value right there,

or at least hundreds

of billions,

will no longer be there.

Like, how does that work?

How does that work in

the banking sector?

How does that work in

the insurance market,

the re-insurance market,

what's been collateralized

off that real estate?

This is not just

different actors,

exchanging in different markets

or in different

legal transactions,

our financial system is such

that we have huge banks,

mega banks, too

big to fail banks,

very often operating both

sides of the same market.

The big banks, they don't

necessarily know how much risk

their counterparty bank

in some other country

- is willing to undertake.

- No one really

understands the legal

interdependencies

that are built into

these contracts,

and that can

ultimately bring down

the entire financial system.

The system is so complicated

that the accountability is lost.

So the real value

is actually here.

These are all the transactions

which are built on top

of the real economy.

Then there's Dougherty.

The small town of

Dougherty is not,

not a whole lot there today.

Just it was a town that

once had a general store

when I was growing

up, had the church,

had a post office, but

you know, not anymore.

Agriculture and rural

America has gotten a preview

of the automation

that's about to hit

the rest of the country

in the next 10 years.

We're here at the town

square in Dewitt, Arkansas.

And if you look around, I mean

there's not a ton of

bustling businesses here,

but one of the

busiest businesses

is Department of Human Services.

So when we define the real

economy, let's not forget farms.

88% are still

small family farms.

So this is a grain storage bin

on my parents' family farm.

This is my dad's place.

He's gonna be 87, mom's 85.

They've lived here since 1956.

So, a lot of years.

And we are a team.

How many times you have

to have intense rains,

heat spells, freezings at the

wrong point to get the crops

to not come in once?

We do protect our farmers,

we give them crop insurance

and the crop insurance

is subsidized.

We have agricultural

extension services,

and they pay for that, but

they probably don't pay

the full cost of that.

It's a free market economy but,

it's also a national

security issue.

Federal crop insurance program

was started as a

response to the effects

of the dust bowl and

the Great Depression.

Many, many areas throughout

the United States were,

were severely affected

by the Dust Bowl,

many farmers lost everything.

In addition to most of America

being devastated

by the depression,

farmers acutely suffered

during that time.

Many parts of the plains

were just completely

filled with dust.

Many crops were lost

due to the weather,

the extreme weather,

due to insects.

But it's the large

scale like my dad said,

the large scale events that

everybody kinda worries about,

like a big drought.

I think that our

aquifer in some places

is down to like 20% and

then a lot of places at 50%,

and we're actually

using more water than

we have at any other time.

We have our pumping plants in

and we're building on canals

and this is actually

the first phase.

We're trying to get water

to this, this Indian bio

and then we're gonna use that

for the main water supply.

In Arkansas, we're gonna

have a drought event,

every growing season.

It doesn't matter,

if we just came

like this last flood

that we had here,

as soon as we came out

of that flood event,

we were irrigating because our

soil is, it's not real deep.

We have what they call a

hard pan underneath it,

pretty close to the surface

Which helps with

the rice growing.

Yes, very helpful.

It just gets more

expensive every day.

We thought we were gonna have

a lot of infrastructure

money maybe to come about,

but it hasn't come about.

And its federal infrastructure

money that coming?

Well, the way that was

originally set up was that,

the federal government was

gonna be responsible for 65%

the state 10, and our

local district, 25.

And there's a lot of

people benefit from this

other than just the farmers,

but that's, who's

got to pay for it

'cause those are only the ones

that's actually using the water.

And I'm assuming

we'll have to do

a whole bunch of

stuff like that.

As temperature rises and

rain patterns change.

When every person we've

talked to about farming

and different methods of farming

whether it's till or no

till or organic or not.

Each piece of land is different.

And each little

community is different.

And the ecosystem

there is different.

So how can a giant JP Morgan,

how can they service

a community like this?

- Well, and why would they want to?

- Yeah.

That's the rest of the story.

I mean, that's not

gonna be a profit center

for them to come out

here and look at a man

that's farming

2,000, 3,000 acres.

They're looking for

20, 50,000 acre farms

to where they can justify

spending some time on them.

The relationships with the

banks they've gotten big too.

But it used to be

these smaller banks

and they knew your

dad and his dad.

If you went to a farm sale and

"Hey I liked this tractor."

And it was $27,000.

You just call the bank

and say, "Hey, I need it."

"Okay, it's in your account."

60 years ago if you made a

crop, you made money period.

If you made a crop,

you paid all your bills

and you could send

your kids to school

and you buy your groceries.

You were okay.

Today, you can make a

crop and lose your assets.

Everybody out here,

it's all family and,

I mean, if you were 30

years ago when we did this

we get all, a

combine was $35,000.

And now a combine is $400,000.

When you're looking

at machines that,

so by the time you

have your headers

and your everything

to go with it

being upward close to

half a million dollars.

Where else is

someone else buying

half a million dollar equipment

and I'm barely making ends meet.

It gets more

challenging every year.

The cost of production

and agricultural costs

or just to be a farmer

and even a small farmer

are almost cost prohibitive

unless your family has been

in farming for generations.

Thank God almighty for

such a good looking crop

while others have

had to struggle.

Oh, here's some fellows.

Yeah, that's who

we're riding with.

Y'all be riding with him.

Alright, thanks Zach.

See you there.

Farms are similar

to owning a house.

You've gotta clean the gutters.

You've gotta sweep the sidewalk.

And the same thing with a farm

you've got certain maintenance

that have to be done

on annual basis to keep

it in a working order.

Before automation, everything

in here is handwritten.

24th, 1955.

Yep. And everyday...

And that's everything that

happened during that day

all the money that came in.

They made four loans.

Like this is, these are the

loans that we made that day.

And you see the size of

the loans; $150, $500.

The countryside across America

not just in our rural community

but other rural communities

used to have a lot of

small community banks

that were very plugged

into their communities

and to the people

that live there.

And trying to help them

grow their businesses

and their lives.

So just afraid of what the

landscape holds going forward.

You're just a number,

you're CUSIP number

on a bond security

and here's where you

mail your check now.

It's getting harder and

harder for those farmers

to stay in business because

they cannot get the funding.

Because with each year

of them incurring loss

and then no hope of...

The prices don't get

better the next year

regardless of the type

of natural disasters

and things that happen.

And so the farmer gets

further and further behind

and we've had several

farmers that are actually

going out of business.

They're having to

sell their equipment

and turn the farm over

to someone else to farm.

It's actually something

that I have no control over.

And none of us around

in England, Arkansas

have any control over.

And at the last

one, like in 2008

when they were saying that,

"The banks wouldn't have money

to loan to your farmers."

And I had several

farmers that were just

pulling their hair out.

They were just, "Are you

gonna be able to loan me

enough money to

finish this crop?"

And I finally told him,

"Just go home and

watch Andy Griffith

and quit watching CNN and Fox."

And said, "You know,

as far as I know"

we're gonna have the money and

we're gonna take care of you

"and you need to quit

watching all of those..."

Stuff to scare you.

Yeah. That you

have no control over.

So a couple of weeks later,

he came back and said,

"You know that was

the best advice

I've gotten so far this year."

The rainfall amounts, we

don't get an inch anymore.

It's either three

inches or nothing.

Everything is extremes.

Many of those restrictions

on banks are being peeled back.

So we still have

trading in derivatives.

It's not, we don't

know what it is.

There's hundreds of

trillions of dollars

maybe 600, maybe 800 trillions

of dollars of derivatives

on currency exchanges

that can't be covered.

It's like after 1980s it was,

"Oh, Gordon Gekko

is a great guy.

He taught us greed is good."

Look what it's gotten us.

It's a cycle in America.

You have to create wealth.

You can't create wealth

by just taking it from

other people through taxes.

People have to be

incentivized to create wealth.

And this has been the great-

Okay, but wait a minute

This has been

the great virtues

of Western democracy

for 300 years...

But it's also been the

massively misunderstood.

So go back to the

post-civil war United States

and the growth.

The growth was made off land

that people were literally

killed and chased off of

and they're like, "Hey man,

look at all this free land."

And that's how money was made.

You have to resolve that we

can do better going forward.

American capitalism can

be pretty heartless.

If you look back at

the American Civil War

and what happened

right afterwards,

we industrialized America,

we went into the Gilded Age.

People look at these

"robber barons" and said,

"This can't last."

And we ended up in the

progressive movement.

This is the age of Reagan.

The Reagan era

was the relaxation

of the administrative state.

It was the sort of, let

big firms get bigger.

It's let's make money.

Let's do it all with money.

Let's let charities

take care of people.

Forget about

government programs.

And that's run since

Reagan was elected.

Thank you very much.

I was raised red.

I was raised in a red family.

I grew up in the '80s.

Fell in love with Ronald Reagan.

I idolized Reagan.

I saw Reagan and I

said, "I want his job."

In fact, my parents told me

I mailed him a dollar bill.

I defaced the dollar bill

with my picture on it.

The maxim is,

Doveryai, no proveryai

trust but verify.

You repeat

that at every meeting.

But I wanted to

be in politics.

I wanted to be the first woman,

president of United States.

I thought it was fascinating.

We can leave our children

with an unrepayable, massive

debt and shattered economy

or we can leave them liberty

in a land where every individual

has the opportunity to be

whatever God intended us to be.

People like to say

economics is a science

but it really follows politics.

Keynes came out and looked at

it, he saw the political need.

That's how we understood

macroeconomics.

Friedman came out

and looked at it

and he saw deficit spending

and he saw government control

and he saw high taxes,

and he said, there has

to be a better way.

He reinvented

classical economics.

They called it

Neoliberal Economics.

Quoted Milton

Friedman and said that,

that how the economy

of the United States

oughta be judged by the

number of imports that we have

and not exports.

And I thought maybe this

was a typo or something.

And so I asked him, I said,

"I mean, are you for real?"

Trickle-down economics

starts in 1980.

It's right around in there.

Late '70s, we get into it.

But the bottom line is,

has two parts to it.

First fire the cops.

Not the cops on Main Street,

the cops on Wall Street.

Turn them loose.

Let those banks do

whatever they wanna do.

And so here we are now, 40

years into the age of Reagan

and people are looking

at what it's done, okay.

It's made a lot of

people really wealthy.

We won the Cold War

during that period.

Not necessarily because of

that, but we won the Cold War.

And America became

this supreme power.

But for the people of America,

it hasn't been so good.

I know, their real

wages went down.

Real wages went down and

people in this country look back

and they wanna make America

as great as it was in the 1950s.

That's when the marginal

tax rate was 91%.

I know.

Ronald Reagan, my

mother loved him.

She watched him every

Sunday night on GE Theater.

At the end, he would say,

"At General Electric,

progress is our most

important product."

What would

wrong Reagan say,

if you told him that GE spends

more money on stock buybacks

than it does on R&D?

In 1950, stock

buybacks were illegal.

They were considered

market manipulation.

Now, investment analysts

look at that company and say

"A lot of companies

are really smart.

I think their stocks

gonna continue to grow up

because they've got a really

great stock buyback program."

It does nothing for the economy.

The average American is...

they're living in

the GDP of 1980.

Yeah.

I mean, yeah, clearly

the world has changed,

and the commodities you can buy

are not the same commodities,

but in terms of your

let's say average

to the extent that we can

measure living standards,

living standards

have not improved.

Firms finance their investment

out of their profits,

that's what people think.

Now, if you look at the 500

biggest U.S corporations,

50% of the profits

are paid as dividends,

50% of the profits are

useful buying back stocks.

All the profits

dissipate, are gone.

So how do they finance

their investment?

If they...

Debt!

Debt.

The president

expressed surprise

about the collapse on

the markets yesterday.

He's still enduring popularity

as much to the economic boom

that America has enjoyed

under his leadership.

More people are working

than ever before in history

where our productivity is up

so is our manufacturing

product up.

There is no runaway inflation

as there has been in the past.

So as I say, I don't

think anyone should panic

because all the economic

indicators are solid.

But the warning

signs have long been there

in the closed factories in

many American small towns.

I mean, there is this notion

of billionaires

creating employment,

and that is

trickle-down economics.

The problem about that

is that in history,

it has never happened.

There is no such thing as

trickle-down economics.

It simply doesn't exist.

It really

is voodoo economics.

When you put the smartest

people in the world in finance

which is what we've done

for the last 25 years

in this country,

you can't hold back their

imagination and their creativity.

The speed and scale of

global economic change

has overwhelmed the

national systems

of rules and regulations.

So our first test

is to agree tougher

and more transparent supervision

of banks, hedge funds

and what is known as the

global shadow banking system.

And so when you

get right down to it,

I'm a licensed banker.

And so when the regulators

come to my bank,

we're very simple little bank.

They look for the SOP,

they look for due diligence

on projects we've done.

It's pretty easy.

You go to a big bank, Wells

or JP Morgan or Goldman,

and you're a regular like,

"What is this? I see these

emails and..." I mean,

they don't understand it because

they're not working in it.

They didn't invent it.

- Sure.

- It's like trying to teach people

a theory of quantum gravity

when they've had a high

school physics course

and they're inspecting

Stephen Hawking or something.

The earth is

like a bounded natural system

that can't expand forever.

The beauty of the legal code

and derivatives are a

product of the legal code

is that we can expand it

how far we want, right?

So we always create

new types of assets,

we create new types of

legal tricks in the end,

and the two systems are

not easily compatible.

If you're very rich and

you gamble with your money

and you lose it in Las Vegas,

that is what you want

and it's your problem.

But here, if they lose their

money here, it is our problem.

The market can't punish

for things it doesn't

know anything about.

And they haven't

factored any of the risks

that all this could change.

Natural disaster could

have major repercussions

for our financial system,

just because they will have

an effect on the asset values.

The new law

allows the 12

federal reserve banks

to issue additional

currency on good assets

and thus the banks that

reopen will be able to meet

every legitimate call.

It is sound currency

because it is backed

by actual good assets.

And so what happens is

that there's an event.

And then when the event

happens, then everybody wakes up

and sadly there's what we

call in a financial system,

contagion, and people

unload, they unload stocks,

they try to get their

derivatives repaid.

They want their insurance

policies cashed.

And the market

starts to unravel.

When the market

starts to go down,

the plugs get pulled everywhere.

And so what you're dealing

with in climate change,

it's not only the direct impact,

but also the possibility

of contagion.

Economic contagion.

- Economic contagion.

- Financial.

Yep.

Those views are

merely forecasts,

and as always will

evolve with the arrival

of new information.

Mike, they're on the

bell, hold the bell.

the bells.

We actually have made it clear

that we will bail out

these financial actors.

We will bail them.

This cannot be sustained.

If it runs only because

the central banks go in

and buy assets, right?

Recently it was

proposed that the

European Central Bank

should also start buying

shares of companies.

So not only debt, but shares.

So we're effectively

socializing the obligation

to create financial returns

for the holders

of capital assets.

And that can't go on forever.

Even though every

politician says,

"This is the most important

election in your lifetime."

These forces aren't tamed or

unleashed by a single election.

In the news in the

last couple of weeks,

we've read about

the coronavirus.

And dude, China's acting like

this is like

zombie apocalypse.

I'm actually kind

of afraid of that

- corona virus, man.

- Yeah. No, I don't wanna get

on a plane.

Do we have a government

that's competent enough

and organized enough to

handle that kind of response?

No, man. I mean,

we can't even handle

like homelessness

in the city of LA.

You know what I mean?

Like we can't even figure out

how to properly fund anything,

let alone a pandemic.

Americans live

under the illusion

that they're incredibly

different from other people.

When I was in college

just everything started

to melt down in the Balkans,

everyone's like, "These

people are savages."

"They've been fighting each

other for hundreds-of-years."

It's like they just came down

out of the trees or something.

Then you're there

and you realize

these people live in houses

that have electricity

and two-car garages

and refrigerators

and not only

children in college,

but several generations that

have gone through college

and they all spoke

the same language.

And these people

Killed each other.

They committed genocide,

250,000 killed, rape camps,

concentration camps,

ethnic cleansing.

This was a plan to

ethnically cleanse Kosovo

and get rid of the

Albanian population.

Are we going to stand for that?

Is France going to stand

for that? I don't think so.

Like many countries

as a system starts

to break down the,

in their case, it was

the communist system,

and in our case, our

capitalist system

is starting to break down

and people turn on each other

because some leaders think

"Everybody's upset right now

and I can motivate my group"

"to take stuff from

another group."

Europe has

not seen displaced people

in these numbers since

the Second World War.

And those are the kinds of

things we have to worry about

with climate change,

because it happens when,

resources start to get tight,

and everybody's a human,

everybody's prone to these things.

We've pre-cut boards that

we can put over the windows

in the event that there are

looters and things like that

to protect the house.

Yeah. You saw what

you want right?

We knew they wanted.

The UN said just two weeks

ago, a billion within 30 years.

Okay. A billion displaced

people, a billion refugees

because they can't grow their

food the way they used to

because of the drought

or because of floods

or because of

collapse of systems.

How much

worse is this gonna get

before it gets better?

I think the general view

is this is going to

continue deteriorating

for the time being,

the next rains are

a long while off.

For the world, this

is a very bad thing

because it's billions

of people dislocated,

massive economic consequences.

Can you have a

society that's been

as successful as this one

has in a material sense?

And can it transform itself?

You know, in the past empires

haven't been able to do that.

What would these Romans say?

Could they help us?

Unlikely.

Unlikely.

The heritage of

America is Roman.

All the men who wrote their

constitution had studied

the history of Rome,

I mean, the Senate it's Roman.

And it's failing us just

like the Roman Senate failed.

You know, there was a

Greek philosopher who said

that governments

go through cycles.

They go from a

democracy to oligopoly

to dictatorships

and they collapse.

I know we're talking

about Aristotle but..

Actually it wasn't Aristotle,

it was a different guy.

No, it was Aristotle.

No, it was maybe

it was Polybius,

I forget who it was.

I'll bet you cash,

it's Aristotle.

'Cause we're in Vegas, I will

bet you cash it's Aristotle,

because Aristotle came

up with the definitions

of the three kinds

of governments

and their alter egos.

So you have a democracy

which when it goes bad,

becomes a mobocracy.

You have a monarchy,

which when it goes

bad becomes a tyranny

and you have an aristocracy,

which when it goes bad

becomes an oligopoly.

He's building on the

work of a predecessor.

What's the name of

the predecessor?

We have to find that out.

I don't

know, you tell me.

We'll find it.

I don't know, I

have to look it up.

Wealth was

obtained largely through trade,

into the warehouses

full of goods

from all over the

empire and beyond.

It was the wealthy few

rather than the many,

who benefited from the riches

and vast resources

of the empire.

This imbalance and the

irresponsible behavior

of public officials,

would become major reasons

for Rome's eventual decline.

Okay, so dad

and I had this bet

and I need you to

see if I'm right

- or he's right.

- Okay.

It's about Aristotle.

Oh boy.

I know, I know.

So I was like well,

Aristotle described,

the death of democracy

and what happens

to different forms of

government as they decay.

Well you see Alessia, I know

from also from your studies,

that the collapse

of the Roman Empire

was mainly a huge, gigantic,

enormous, humongous,

financial collapse.

At some point, the emperors

had just run out of money.

There are lots of

different theories

why the Roman

Empire did collapse.

I think what we know now,

is that there has been

a long economic decline

before the Roman

Empire collapsed,

before the German

hoards came down

and conquered Italy,

and conquered Rome,

ultimately, right?

So the question is what triggered

the long economic decline?

Disparity between

the rich and the poor.

Onistorus and Miliorus they...

Yes, you're

speaking Latin now.

Yeah, yeah Latin.

Massive amounts of inequality

may not be politically

sustainable.

Governments fund themselves

through either debt,

or through taxation.

In Rome you would basically go

and try to squeeze

more returns out of

provinces that you occupied,

or you might launch another

war to get the returns,

to feed Rome and

feed those who were

running the system overall.

And I think that's

the common denominator

because we live in a quite

different system today, right?

So today it's our central banks

who are doing the

rescue operation.

One thing about the

financial markets,

one of their real power is,

if they can pull forward

action from the future

to the present, if

there's credible policy,

after all, most of

what central banks do

is effectively that.

So big trees fall hard.

The market can

adapt to anything,

as long as there's clarity,

transparency and honesty

and I don't think

we're getting that.

There were a lot of things

that caused the problem,

but, I mean, essentially,

the structure of Rome

held together for

a good long time,

until finally it just ran out

of economic wherewithal

and leadership.

Politicians were bought,

what the founders of

our republic warned us

about over and over that

if you get really wealthy

and you lose your moral

character, it's over.

Well, that's where we are.

Because we are very

close to a moment

in which we could

start slowly going down

and if we are not very careful,

we will go down faster and

faster and faster and faster.

Roller coaster.

It will be a lot of fun, maybe.

You know the

ancient malediction,

may you live in

interesting times.

So, that's how

it ended last time.

Except this time, it

won't just be barbarians,

it'll be the planet

itself that's on fire.

There's still

active fire in that area.

Monitor the conditions

and know what you'll do

if the fire threatens

In the smoky

aftermath of the worst start

to fire season

anyone can remember,

while some search for solutions,

others want someone to blame.

Probably should take a

break and let it settle in,

take an intermission.

Financial ingenuity has

been part of this system

since the Dutch invented the...

Okay,

- But a lot of it

- liability company

- isn't financial

- and Lloyds of London.

But dad, listen.

People get pretty...

Everybody thought Bernie

Madoff was a genius.

Yeah.

Foreign investors looked

at the United States

and said, "the United

States they're the best.

"That's the safest place in

the world I can put my money".

I mean, we've

had, I don't know,

five, six biblical-like events.

We're continuing to have them,

so I need to

question the validity

of the value of, and viability

of my land long-term.

A little over seven years ago,

Hurricane Sandy

blew through here,

causing tens of billions of

dollars in property damage,

and since then, New

York has built more,

bigger, taller and more

expensive, because we, the people,

are on the hook for the

cost of the insurance

if another hurricane comes

and hits New York City.

The National Flood

Insurance Program

is a federally-run public

program of insurance.

It's run by the Federal

Emergency Management Agency.

It provides flood insurance

for virtually all homeowners

and small businesses

in the country.

So this is pretty

unusual, actually.

Most other countries

have private markets

for flood insurance,

but the U.S does not.

It's a supplementary

policy that is subsidized

by the government, and so all

citizens are, to some extent,

footing the bill for

coastal property owners.

In order to build a huge

condominium development

in a flood plain in New

York City, you, of course,

need a lot of capital.

Municipal actors in New York

City are very interested

in continuing to promote a

version of New York City,

in which as much of the

available land remains viable

for continued

economic development,

because property taxes are so

important there, as elsewhere.

Well, the original program

of the National Flood

Insurance Program

was supposed to stop

construction in very high risk areas.

Areas where water

moves with velocity,

particularly flood

ways along the river,

where water moves the

same rate as the river,

hurricane-zoned areas, where

the storm surge comes in.

The building is,

it's almost impossible to

build a really safe building

against a 14-foot wall

of water coming in at you

in a storm surge.

There's a lot of vested

interests that don't care,

construction

industry, for example.

They'd like to build

a house on a beach

while the tide is out, as

long as they can sell it

before the tide comes back in.

And once they've

sold it, of course,

the risk is now somebody else's.

The ways in which financial

actors securitized mortgages

in the run-up to the

last financial crisis

is still going on.

So the building

contractors all want

to minimize the flood program.

The town wants to minimize it,

wanna hold down the

elevations on the maps

and fight that every

map that comes out

by the National Flood

Insurance Program,

that causes problems,

delay in implementation,

maybe never implementation.

The coastal communities

are on some of the most

valuable land in the country,

And as a consequence,

people are gonna fight

to protect their

investment position.

I thought, okay, the

city's not requiring me

to have flood insurance.

My realtor didn't tell me I

had to have flood insurance.

Honestly, you don't

look at the flood maps

when you move into

a neighborhood.

You fall in love with the

house, and 85% of the people

in my neighborhood

were not insured.

Shelter.

The United States

is uniquely vulnerable

to building into

disaster-likely,

physically vulnerable areas,

because of our reliance

on local rule, particularly

for zoning decisions.

That's part of our bedrock

of the United States,

state rights and local rights,

and it's actually has

a lot of advantages,

but it has a major disadvantage,

which is that local

governments depend on revenues

that are coming from their

buildings, from their residents

who are building and

living in their localities,

and that means that all residents

benefit from development.

The politics of provision

are so tied up with land values

in the United States, that

if property values go down,

then the tax assessments

adjust to reflect that,

and you're bringing in less

revenue for the tax base,

which means less investment

in local amenities

and schools and local

public transportation.

In Texas, we don't

have state income tax.

That's another reason

why you wanna live here,

because it's cheap, but people

are taxed on their land.

The maps that are in

existence for where a 100

or 500-year flood will

happen are so outdated

and no longer accurate, the

risk and the cost of that risk,

even within the insurance

industry, is not as accurate

as it needs to be, in

order for us to appreciate

what the cost of climate is.

Insurance actors

have found ways

to take an insurance

policy and securitize that,

and transfer it to kind

of capital risk markets,

so they're not really

holding the bag,

which means that they're

willing to underwrite more

and more property,

which means that people

can kinda continue to build

in risky areas.

I don't think anyone

would wanna come in

and look at the house and

come through salt water

and wanna buy it.

- This is my nest egg.

- Yeah, this is your nest egg.

This is how I'm gonna help

my kids and my retirement.

But now, because you

bought it in an area

where there's rising sea level,

maybe that nest

egg's not so secure.

In order to convert

his nest egg to cash,

he's gotta be able

to sell the house,

but now nobody will insure

the next 30 year mortgage.

What happens to John?

John's lost

his retirement nest egg.

Okay, so John is now

literally John on the street.

The nice house

that we're gonna buy

in Florida to retire...

This was their

house in Florida.

They were gonna move to Alabama.

Okay, well,

they're not moving.

They may still move to Alabama.

They may be living

in a trailer park.

Flood involves

the U.S government

in this really peculiar way,

fire is privately underwritten,

so it's private insurers

and what's happening

with fire risk,

is that some of the

primary insurers

are going out of business,

in events like the

California wildfires,

that can put an insurer

out of business,

if they have

outstanding liabilities

that exceed what

they can pay off.

Then

we started talking

and you told me

about buying a house

in Sausalito.

So what happened?

So we call the insurance

company two days before,

two or three days before

and let them know we're

gonna close in a few days.

And they call us back and say,

"Hey, we can't

insure that house"

And I'm like, "what?"

And they're like " yeah, it's

on a list of neighborhoods"

"that we don't insure anymore"

So these entire neighborhoods

are gonna be uninsured

and they also told us,

they don't know if

they're gonna reinsure

the current owner

of the house either.

That's an entire,

billions of dollars of

houses across the state,

that it's gonna have

an insurance problem.

The insurance companies

are insuring for one year.

So as things get worse,

the insurance companies

are definitely not

going to be able

to come to the rescue

of these homeowners.

These latent,

hidden climate risks

that might exist in

different places,

in different housing markets,

should they burst,

could take down

the entire financial system.

And right now this house

is listed for $49,000.

At the peak of the market,

it went to about $250,000.

It's not only the owners

that lose their assets,

it's the financial

intermediaries that lose

their claims against them.

It's those that bought

the secularized mortgages

and other assets that

are linked to them,

just as we've seen

in the 2008 crisis.

And unless we're prepared

to continue to write

the same check over

and over again,

we need to start to scrutinize,

are we hardening the utilities

and the infrastructure

around these homes sufficiently,

so they can weather these

storms going forward?

Or should we in fact not permit

the investment of capital,

that is going to be subject to,

climate change conditions

in a negative way

and we need to think about that.

No, that's the

really scary thing

because we're not, you

know we're not hardening

any of our infrastructure.

I mean, not yet.

It's very expensive.

There's guys thinking about it,

but nobody's done it yet.

Well, from an oil

company standpoint,

most of the major assets

in the United States

and actually globally,

are on the coastline.

From that standpoint, the

facilities are as vulnerable

as people's homes.

So there's a lot of

offshore infrastructure

in the Gulf of Mexico,

but that comes on shore

to a lot of pipelines

that are right at the coastline.

And so as the coastline erodes,

those pipelines become

noticeable and vulnerable

and have to be buried deeper,

or infrastructure put

around it to protect it.

So indeed, yeah, hardening

of infrastructure,

utilities and fires have

been associated with that,

or the pipelines.

People are worried about how

to protect those going forward.

Nature's gonna be

eroding the foundations

of our economy.

So, sometimes I'm out

in a place like this,

and I imagine what it

would be like to come here

with no money in my pocket,

fleeing an economic meltdown,

'cause you know look, we

do have plenty of land,

but if I had to survive out here

and didn't have the money

to buy something to

provide me power,

some way to get water,

out of a fairly dry land,

while we love pristine nature

and we like to hike in it,

hunt in it, camp in it,

all those things we do

thanks to the technology

that you bought at the store.

The tent, the gun,

the flashlight,

the lighter, these things are

made in human communities,

in factories, not by

people on the run,

not by people out of capital.

It's all about capital.

So here's what happens,

capital is gonna flow to where

it can make the most money

for the capital owner.

A town like this,

which was a silver mining town,

is a good example

of foraging theory,

where if you're an animal or,

and these things translate

into the human world as well,

and you've got a choice

between two things,

one that's easy to get

and one that's hard to get.

If the easy thing to

get is worth more,

that's what you're gonna go for.

So that's what

produces boom towns,

because at one point the silver

was really easy to get to

and worth something

and then when the

silver market crashed,

well, it wasn't worth anything.

So they moved on, to find the

next easiest thing to mine.

These patterns of capital

do not change over time.

Capital is always gonna

seek the greatest return

and as soon as that

return isn't paying off,

it's gonna pull up stakes

and go somewhere else.

The way to define

capital is the money

that is going to be used

to create something.

People are very myopic.

They are just looking at

what's in front of their face

and the portfolio

that's right there,

how they're gonna make

money in the short term.

How you doing Frank?

So look, we look

around and it's like,

this is all the capital,

this is all the

capital in the world,

headquartered right here.

Right.

And I'm assuming they

all wanna live past 2050

and so we gotta change over.

Are they beating down a

trail to your door to invest?

No, they're not.

We have to search for the

right type of investors

for our projects.

And when we do find the

investors for our projects,

it's extremely difficult

to create the value

or pull out the value for our

projects that the investors

recognize immediately.

If somebody can get 15% on

their money doing derivatives,

why would they wanna

get 5% on their money

doing renewable?

Because they would be able

to use the investment

tax credit.

Everybody wants a return

and everybody wants to

maximize their return.

And the only groups that I

know can maximize their return

for renewable energy

projects today,

are the wealthy individuals

that have passive income.

And, what do we think of

as like wealthy individuals?

So I think a lot of Americans

think if someone has $500,000,

they are a wealthy individual.

I'm talking about

people who have

hundreds and hundreds of

millions of dollars of net worth.

So minimum, a hundred

million dollars of net worth.

I would say so, but

there's not many people

maybe less than 1%

of the population

that has that type of

investment portfolio,

or investments generating

passive income.

Any more comments?

That's pretty close

all right, pretty close.

Perfect.

All right.

So when there's not investment

in the market towards

the technology

that would help for

climate solutions,

and renewables and clean energy,

then that trickles

down into the entire,

the entire life

stream or life cycle,

you know, the whole

flow of business.

Lord Keynes, who was the

founder of macro economics

asked the question,

why do people invest?

And honestly, there's no answer.

He called it animal spirits.

I can tell you people

are risk averse.

And after 2008, they're

even more risk averse.

When I go to these

business conferences

and I see my friends,

I asked the guy who's worth

a hundred million dollars,

I said, what are

you working on now?

He says, you know,

he said, I'm just,

I'm pretty happy where I am

and you know, I've got

the house in Mexico

and we're looking

after the grandkids,

and I mean, he's not

investing in taking risks.

He's not creating jobs

for the rest of us,

at least not directly.

That's the animal spirits

that are out there

in too much of the business

community right now.

So the only way you

can replace that

is with government leadership.

The Erie Canal, the

Transcontinental Railroad,

the Panama Canal,

the space program,

the interstate highway system,

in no case did a group of

entrepreneurs get together

and say, hey let's build the

interstate highway system.

No, it was a dream

that Ike pushed in 1955

that came from a study done

during World War

II that showed that

you needed these highways for

national security purposes.

This is no partisan policy.

No one has a monopoly on truth,

and on the facts that

affect this country,

we must work together.

The United States is

highly dis-aggregated.

We have 50 states, one nation,

many counties, many regions,

tens of thousands of cities

they all have a voice

in how things are done.

And it's hard to get us to

collaborate on certain projects,

unless we all align and

agree it's necessary

and we feel some

urgency to get it done.

If the Australian

military study,

the U.S military study,

and the British military

study are all correct

we've got about 30 years

if we don't do anything

until civilization collapses.

Which I'm guessing doesn't

have a good rate of return.

Correct?

So Wes there are actually those

who would tell

you that we may be

beyond the tipping

point already,

I don't subscribe

to that, by the way.

If you do subscribe to that then

it almost makes

the investment in,

you know wind and

solar, not pertinent.

What's the most

valuable thing in the world?

The most valuable thing,

it's oil reserves in the ground.

It's worth more than the

GDP of the United States,

more than the stock market,

more than the stock markets

of all the Western countries,

it's oil in the ground,

and the people that have that

oil, they want it to be used.

Whatever you hear

about Saudi Arabia

saying they're

going to, you know

move beyond a petrol

based economy, yell, yell,

but they're going to

move at their pace

and they need those petro

dollars to get there.

The societal costs right

now are much greater

than the economic costs of

taking it out of the ground.

So you have to recognize

the societal impact

and you have to make the people

who are producing

it and selling it,

and the people who are buying it

pay the full cost of using it.

And that, that means a tax.

But we didn't even do

that with security though,

because I mean, realistically

we've subsidized the oil

industry for 50 years

by knocking over governments,

by protecting shipping

lanes for it, oil lanes,

so we couldn't even do

it when it came to like

having them pay for their

own extraction and security.

It's true.

But one of the reasons we

couldn't do it is because,

we didn't really

have the alternative.

What's the sound?

We didn't really have the

alternative technically.

Engineers

worked under fire

to douse oil

pipelines set ablaze

by retreating Iraqi troops.

Animal fats, and tallow

could no longer supply

the ever growing need for

candles and lubricants.

Whale oil, which had long

been the chief illuminant,

was becoming scarce.

Yet the demand for artificial

light was increasing.

In 1850, a lamp capable

of efficiently burning

a refined product of

petroleum was invented.

Oil!

Oil!

Early oil production,

they used steam power

for the drilling,

for the riggings

of different pieces

of equipment,

and that steam power

probably was produced

by burning wood or coal.

So you'd use wood

or coal to get oil.

Today, we use

electricity to get oil.

We use gas to get oil.

So we use one form of

energy to get another.

And that's one of the

interconnected aspects

of energy that's kinda

surprising for people

is how interdependent is.

We don't have an economy that

runs on one form of energy,

we have an economy that

runs on many forms.

Part of this equation,

certainly in the short term

to this time period

you're worried about,

is modulating consumption and

adjusting cultural behavior.

But people aren't

talking about that,

no one wants to blame anybody.

If you wanna blame industry,

well, industry exists because

people buy their things

or use their things.

So they're the

ultimate consumers.

Are we gonna carbon tax them?

Are we gonna punish them?

Or maybe part of

the equation is,

we all accept responsibility

and we get a cultural

change to take place here

to go back to where we were

20, 30 or 40 years ago.

We might, but that's hard.

The vast majority of our

individual impact comes from,

housing, transport and food.

These are kinda big

structural issues

that can't really be

addressed adequately

by changing the brand

of paper towels you buy.

We live in an energy

consumption society.

And the way to look at things,

we have to be aware that

nothing comes for free.

We have to be aware that

everything costs energy,

whatever you do.

This is not what public

space looks like in the U.S,

but I noticed here

in the Netherlands,

everybody's riding

bikes everywhere.

Yeah. Yeah.

And that doesn't

strangely require gasoline.

Nope.

The question

is, can we replace

fossil fuels with

renewable energy?

And this is a very

tricky question.

It raises enormous debates

and people get angry when

you asked them this question,

because it is not

clear what you mean.

If you mean that you can

satisfy people's greed

with renewable energy,

then the answer is no.

If you mean renewable

energy could produce

a sufficient amount of

energy in order to survive,

then the answer is yes.

We are in an energy efficient

home now, that we've rebuilt

that our household use

alone is twice the size

of the average American,

that woke me up,

I can't count the

number of trips

that I've taken around

the world for business,

but that two

international trips,

was equal to one year of

utility energy in my home.

And that really had me

thinking about travel.

It had me thinking

about what I eat.

Another

surprise for many people

is how much energy we

use in the food system.

And

complete dinners.

In

the United States,

we use 100 quadrillion

BTU of energy a year.

A BTU is our British

thermal unit.

One BTU is about the energy

content of a kitchen match.

So in the United States, we use

100 billion million kitchen

matches of energy per year.

10 quads, 10 quadrillion

BTU is for the food system.

One of those quads is

in the food itself.

Food is a form of energy.

We're ingesting at one quad

of food energy into our bodies

for 330 million

Americans every year.

The other nine quads is for

the rest of the food system.

This is in the agrochemicals,

the fertilizers and pesticides

diesel for tractors, the

energy for refrigeration,

the energy for drying

crops at silos,

warehouses, transportation,

plus the energy to

cook at our homes.

Pies are done.

Three or

four quads of that

is just for the cold chain.

That's the refrigeration system:

Refrigerated trucks,

refrigerated warehouses,

and refrigerators and freezers

at our homes and businesses.

The energy embedded

in the cold chain

of the food system

in the United States

is more energy than

entire countries

like Switzerland and Sweden

consume in a year combined.

The energy embedded in the

edible food we throw away

is also enough to power

entire countries elsewhere.

Sadly, we throw away like

a fourth to a half

of our edible food.

Okay so

Michael, here we are.

We're surrounded by water.

Yeah.

And what's

the relationship

between water and energy?

The water energy

relationship is twofold.

One is we use a lot

of water for energy.

We use water to

cool power plants,

we use water to

irrigate biofuels,

we use water for oil

and gas production,

we use water to make

steam at refineries.

In fact, if you look all up and

down the energy supply chain

water's at every step.

Our well went dry.

Dead.

Yeah, that's dead.

This is where the water,

that would be the full mark.

It's not a fantasy

apocalypse movie landscape.

It's now and it's real.

So the grid might be strained

if you don't have water

available for cooling,

at least the way we have

most power plants today,

where they use heat,

they then need a

water for cooling.

Modern forms of like solar

panels or wind turbines

don't need water coolings.

The average life for PV

panels is what, 20 years?

20, 25 years.

20, 25 years.

- Maybe 30 years, yeah.

- So the people who say,

well, it takes seven

years of energy

to produce this PV panel,

but then you're getting,

that means you're getting 18

years of energy free.

So you've cut down.

Even then you're getting 18

years of energy for free.

So me John Q Public,

I'm like, hey man,

I wanna put some money

into your solar farm.

No, not until the government

gets involved with things,

puts us into a pari passu

position with fossil fuels.

I've got a lot of friends

who are in the

renewable business,

and there's a really

big problem in terms of,

you know, you've got the

power purchase agreement,

you've got all the

permitting done,

You've even got

interconnect agreements,

except what's happening is,

grid companies are delaying

and not letting

them on the grid.

What's going on with that?

I think one of the

challenges we have is,

who has access to

the infrastructure

and democratizing

the infrastructure

is a way to open it up so that

more solutions can

be brought forward.

This is something that we did

with telecommunications

in the 80s with AT&T,

AT&T had built out all

the wires and poles,

and they were

required to open up

their infrastructure

for other companies.

And that's why we have

so many phone companies,

and long distance companies

now that we didn't have before.

The same thing could happen

with democratizing the

electrical infrastructure.

More solutions would be

plugged in more wind and solar,

and we have more

technologies along the way.

And this is where

long range planning,

stable governance really matter.

Kind of what I'm hearing is,

it's not a technology problem.

No, not a technology problem.

It's not an

engineering problem.

- No.

- It's a financial engineering problem.

Energy poverty, lack

of food, income inequality.

So it's up to us now

to form the policy

that is going to

help bridge this gap.

In 1941, when the

United States went to war,

and people saved tin

cans and aluminum

and gave up, women gave

up buying nylon stockings,

and everything was done

for the war effort.

But the war was there,

was right in front of us.

And young men were being

drafted and sent overseas,

and casualties were coming home.

And this is different.

It requires the same type of

reorganization or commitment.

But why didn't

they call on me?

I could have done something.

That was then,

and this is now.

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Michael, you are now in

charge of the United States

Energy policy and

you have free reign.

How would we make

the transition?

For national security reasons

and for economic reasons

and for environmental reasons

there are many

reasons to do this.

We need to harden, improve

and expand our grid.

Maybe even using the

interstate highways.

We already have the rights

of way and put lines

above ground or below ground,

create a national network.

And then it will span and

reach to the sunny windy areas,

and already connects

to the urban areas.

And once we have the network,

we can plug in whatever we want,

build the infrastructure first,

then the energy will follow.

But we have to put a

price on pollution.

We'll take the money from

the price on pollution

to clean up the trash.

So let's take the United States

6 billion tons of CO2 a year,

put in the atmosphere.

And let's say we're

willing to pay

I don't know, $30

a ton to remove it.

That works out to if I

do my math correctly,

$180 billion a year.

Sounds like a lot of money.

That's less than what we spend

on just dealing with

trash from cities.

Why not spend another couple

hundred billion cleaning

up the waste in the atmosphere.

Let's take the CO2

and put it into the soil.

Like, let's pay farmers

to take the Co2

out of the atmosphere

into the soil.

We need to get more of that

national security mindset.

If you have a built

to last strategy,

then you do want to look at

what's happening in

these longer horizons

and it's absolutely critical.

It's gonna take

all forms of energy

and all people to move us

through this transition.

Otherwise, I don't think

we actually stand a chance.

I'm trying to get

rid of this car,

but it's like quitting

smoking, it's not easy.

You are so used

to certain things

that it is very difficult.

The Romans had done

a lot of bad things

to the ecosystem.

Yeah.

But, they had not

destroyed it as we could do.

- FEMA estimates for every

dollar spent on hazard mitigation

you save $4 in disaster

recovery costs.

So we're already

spending the money.

There's the sense that

it's perhaps too expensive

to prepare for climate change,

but we are already

spending the money.

We're spending it after

every disaster hits.

When I was growing

up, there was the draft.

So everybody thought they had

an obligation to the country.

If you went to a land-grant

college you were drafted.

Now it's different.

The trust in government's gone,

the obligation to

government is gone.

If we could take some of

that spirit of patriotism

and service and rebuild

it into doing something

for the environment.

This entire thing

is built out of carbon

that comes out of

the atmosphere.

We need a hundred

thousand young people

to give up part of their summer

and form up and

really work this.

We could control

these pine beetles

that are destroying the forest.

We could plant new trees, but

it should be done not only

for pay as a guaranteed job,

but it should also be done

for every citizen's obligation

to take care of the land.

That's what I'd like to see.

It sounds like you're trying

to inspire a whole generation

of people to pay for it.

Well, it sounds like something

that old guys would say.

Whoa.

Baby baby.

Can you smile for us?

That's a good noise.

It's made me want to be more

of a fighter for her sake.

The transformation is

potentially exciting,

because we can think not only

about losing things that

we have always wanted

but also letting go of things

that we perhaps

don't benefit from.

We can lose in order to

transform into something else.

It's not as kind of confident

that things will be okay,

but it finds possibility

in a ways that

things will have to change

in kind of really dramatic ways.

And so we are looking

at diversifying the types

of crops that we are

wanting to plant,

and also work with

conservation type programs

to help preserve

species and habitat.

And let nature take it's course

and bring back

species that we need

and that the crops actually

need to be productive.

We don't want a

hurricane or a tropical storm,

they're already geared up

the crops are turned in.

They wanna go ahead

and get finished.

People wanna know where

their food came from.

Well, at some point maybe

people will wanna know

where their banker

lives and who he is.

And do I have a

relationship with him

that when I need some

money to fix something

I can maybe find

somebody to help me?

Yeah, I mean,

it's not a matter of

the government

telling banks what to do,

or telling us what we can do.

No, I mean, there's still

lots of possibilities.

We should have smaller banks

basically split them up,

and not make them

too big to fail.

If they make mistakes, they

should fail without causing

a total systems crisis.

And probably what also needs

to be done is introduce rules

which make it impossible

for the financial sector

to create within the

financial sector itself

so much additional debt.

We have to somehow correct

this market imperfection.

If you want to

have a derivative,

if you want to hedge

your risk fine,

but you must have exposure

to the underlying asset.

I remember

I was watching on TV

after a major flood

down in Florida,

and they were interviewing

this guy and he said,

"My father rebuilt twice, my

grandfather rebuilt twice."

And he says, "And I'm

gonna rebuild again".

And the reporter turned

into the camera and said,

"That's the American way".

Well, I thought the reporter

should say, that's stupid.

You can't keep doing

it over and over again

that's the definition

of insanity.

So it's basically trust

in the monetary management

and trust in the future

productivity of a country

that gives us trust

in the currency.

Not the idea that there

are some gold barons hidden

in the federal reserve.

And so there is a

point of resistance

at which governments

aren't going to be,

have access to capital

to address the problem.

We're rich.

You know, the fear is,

if we cannot bail out

the system anymore

it will come crushing down

with huge side effects.

The hope and that

sounds a little cynical

but I think the hope is

we probably can reorder

our system only after a crash.

And I think that human

history is such that

we are unable to make

really fundamental change

in the way we live and the

way we organize ourselves

without such a crash.

Nobody wants it, and I'm the

last person who wants it.

And if I think back to the

1930s, and I'm German, right?

And you think about

what the repercussions

of a major crisis can be.

We just don't know how

we would get out on

the other end of the tunnel.

I think without this

crisis, I just don't see

enough political leverage

to fundamentally alter

the way we organize

our financial system.

When climate change happens,

there will be real problems

and it will be real,

as you said, there will

be real scarcities,

and it will be real migrants

coming, and there will be an...

And that's what I,

and then will really be

broke because it'll be

after you've had that collapse

of the inverted pyramid.

And then it's like, then it's

like asking Somalia to

fight climate change.

Yeah, yeah.

So your

criticism would be

that we're not facing reality

and not adapting to it?

That's correct.

My answer to that is, I

still have faith in democracy.

I believe we can

do it as a people.

I believe we can

do it as a society.

And I believe we can

take the institutions

of the United States that have

served this country very well

for over 200 years, and

move into the 21st century

and still help lead

mankind forward.

It's an article of

faith, but it's the faith

that motivates action.

We have almost all the tools

and all the financial resources,

and all the institutions that

could solve this problem.

It's the kind of challenge that

could bring mankind together

in a way we've never been

brought together before.

I wish there was

more conversation,

more guys on the opposite

side talking together.

Because everybody as we feel,

there are people feeling

opposite from us

that are just as righteous

and all of that stuff.

But we ought to get

together to see...

The thing if you get

together with people like this,

what you find is

the disagreements

- are pretty narrow actually.

- Yes, that's what I mean.

The people are mostly

agreed on like 95%.

Yeah.

But, but there are

forces in the culture

that want to sharpen and

popularize those disagreement.

Yeah.

It's a human nature issue.

Okay?

So what sells?

Tell me, what sells?

What do you pay attention to

when it's happening around you?

You gotta find people...

Conflict, conflict, conflict.

- It's true. It's true.

- That's it.

To create that

kind of a dialogue

between a father and a son,

that love thing, I

mean, this is my kid.

You guys must have some

wild conversation man.

It's what gets me.

- I totally...

- This is the basis

- disagree with that.

- Of democracy and capitalism.

No, I disagree with that.