♪ >> live from pier 3 in san francisco, welcome to "bloomberg west" where we cover the global technology and media companies that are reshaping our world. our focus is on innovation, technology, and the future of business. let's get straight to the rundown. we start today with venture whotal legend tom perkins set off controversy after he compared the war on the rich in america to the persecution of jewish people and not the journey. first, i want to read his full

letter. from the epicenter of progressive thought, san francisco, i would call andntion to the parallels not see germany to the progressive war on the american one percent, namely the rich. run the occupy movement, to the imonization of the rich, -- see a rising tide of hatred of the one percent. there is outrage and public and the to the buses companies that employ them. we have outrage over the rising real estate prices. we have, for example, libelous attacks on our number one celebrity, the author, where they are calling him a snob, despite the millions he has spent on the mentally ill in the past decade. this is a very dangerous drift

in our american again. radicalismessive unthinkable now? he is joining me now in the studio. tom. do you regret this comparison? >> yes. i talked to the head of the anti-defamation league this morning, following up on a letter that i sent over the weekend, apologizing. terriblee some words chosen. i, like many, have tried to understand the 20th century, and the incomprehensible evil of the holocaust. it it cannot be explained. even to try to explain it, is questionable. it was evil.

word because, during the occupy of san francisco by the occupy wall street crowd, they broke the windows in the wells fargo bank. they marched up through our automobile strip. iny broke all of the windows all of the luxury car dealerships. i saw that. i remember that the police just stood by. i thought, this is how that began. that word was in my mind. but i don't need to read from that letter. if you're interested, i can. >> sure, go ahead. >> i deeply apologized in this letter that i wrote to the anti-defamation league. id please apologize to you and anyone who has mistaken my

remarks as anti-semitism. this is not the case. austriapartner was from and fought in the u.s. army. we became the deepest of friends during our long association, and he taught me " never imagine that the unimaginable cannot become real." he was never comfortable with the extreme political currents in america. he never took our demonization for granted. he would have understand my letter and would have agreed. for using apologized that reference, as i said before. abei had a discussion with before he came here. i hope that, at least that part, is put to rest. 30,000 people put in

concentration camps. war you going for in that analogy -- what were you going for him that analogy? >> the jewish people were only one percent of the german population. ast germans had never met jewish person. and yet, hitler was able to demonize the jewish people. and that was one of the earlier manifestations. and there'd been many before. and of course, we know about the evil of the holocaust. that when point was you start using hatred against the minority, it can get out of control. i think that that was my thought her. now that as the messenger i have been thoroughly killed by everybody, at least read it. >> you mentioned the word threatened -- hatred, do you feel threatened?

>> i do not feel threatened. but i do believe that the creative one percent are threatened. me that inequality is the number one problem in america. i am friends with jerry brown. i voted for him. i will vote for him even though he reads my taxes 30%. he tells me the number one problem in america is inequality. and that's probably and possibly true. and i think president obama is going to make that point tomorrow night. are notone percent causing the inequality. they are the job creators. valley, i think our company is created one million jobs. and we're still doing it. it is absurd to demonize the

rich. and do that for being rich and doing what the rich do, which is by getting richer by grading opportunity for others. >> how do you feel threatened? >> i said, i do not feel personally threatened. i feel, however, that i feel, as believe that i we are engaged in class warfare. i think that they are threatened through higher taxation and so forth. that is my message. >> if this is the kind of persecution happening to the one percent, then what is happening to the 99%? 99%, i mean, ihe did not originally come from the one percent. i grew up as one of the 99%.

i am your classical self-made man, if you will. i think that the 99% is struggling and really struggling to get along in america. we have ever-increasing regulations, higher costs, i think caused by more government than we need. small business is difficult to form and prosper. it is difficult to hire. that, in my view, is what is hurting and causing the inequality. think that the solution is ,ess interference, lower taxes let the rich do what the rich do, which is get richer. but along the way, they bring everybody else with them. >> you are a multimillionaire.

>> i am not a billionaire. i am a multimillionaire. i have created some billionaires, but i am not one of them. >> you have a yacht. you have fancy cars. you have underwater submersibles. it is basically an airplane that flies underwater. do you worry that you are divorced from reality? are you divorced from reality? >> i do not know if anybody can answer that. truthfully, i do not think so. i give, and have given, and will give, millions and millions of dollars to a long list of charities. i have in mind some universities to give due. i want to leave my children something that they can have,

even though, upon my death, the government will take about 45%. i think i am connected to reality. i have got lots and lots of friends both that are younger and in this whole web-based, twitter based, world. and i think i know what they are thinking and talking about, yes. >> what about silicon valley? is silicon valley divorced from reality? you mentioned that you crated billionaires. six-figureds making salaries and getting perks at companies. they are getting wi-fi access down to the peninsula, which regular residents do not have access to. is there something to be said for this idea that silicon valley is living in its own little bubble? >> there is something in that. on the other hand, it is a

bubble that is created -- that has changed the world. it created incredible wealth around america and around the world. maybe of the put up with a little techno geek arrogance in order to get the results of those sort of folks'thinking. how do you see this divide playing out? that, as the messenger, i have been shot at. read the message. at thejust said beginning that you regret the message. >> i regret the use of that word. it was a terrible misjudgment. i do not regret the message at all. >> what is the message? >> any time the majority starts to demonize any minority, no

matter what it is, it is wrong and dangerous. no good ever comes from it. >> what is the solution? >> first, to understand the problem. that is why wrote the letter. and i do not apologize for writing the letter. i should not abuse that awful word. but the letter said what i believed. and i believe we have to be careful that we do not demonize and that we don't demonize the most creative part of our system. >> tom perkins. continue this conversation after a quick break. stay with us. ♪

>> welcome back to "bloomberg west" today. i am emily chang.

we're speaking with tom perkins. you said that you do not regret the message, but you do regret the one word, kristallnacht. they said that they were shocked by the words that you use and do not agree. you have been involved with them for many years. how do you respond to what they said? do understand why there is been a kind of backlash? >> yes. my letter was not about kleiner perkins caufield & byers. i did not mention them at all. they did not need to say anything. but they chose to throw me under the bus. and i did not like that. they said they were shocked. i sort of feel like the guy saying, look, do not go swimming. there are sharks in the water. you have to understand the

warning. i was presenting a warning. and i do not think they got that. secondly, they made a point of my not having been involved for some years. and that is true. and i think as i have distanced myself from the firm, they have a corresponding decline in the firm. but i will go further than that. in a way, i miss them. i hope they miss me. door.r name is on the itwhen you say something does reflect on them, to a certain extent. do you worry about it reflecting on them? >> i did not have them in mind when i wrote this piece. it was not about them. in that nothing to do with them. they are right that there

and strategies have diverged significantly from mine own. my name on the door probably does not mean very much, if anything, it anymore. >> do you think your name shall be on the door, especially after this op-ed? >> i think that is for them to decide. i do not care either way. >> when you say there's been a decline in performance, do you think that if you were involved it would be different? >> i don't want to talk about that. >> let's talk about the solution here. you mentioned that your friend fled austria and hitler. you think he would've agreed with you? >> i would have. i was not talking about the nazis. i was talking about the persecution of a minority by the majority. leiner always distrusted those

sorts of trends in american politics, not in connection , anti-semitism, but in general. he certainly would have understood my message and approved of it. dly, there's been a lot of e-mail and a lot of twitter. shortly before i came here, i got an e-mail from a person i do not know from new england, and he said -- i'm going to quote part of this. he said, i am a democrat. i consider missable liberal. i'm bewildered by the amount of scapegoating that is been sent toward american success stories. to lay blame for society's ills at the feet of them is irresponsible and dangerous. please continue to speak out and

use this platform to speak against this type of irresponsible finger-pointing. that is from a liberal. >> view of conservatives out leadinglling you the a-hole in the state. very niceat is a word, considering i do not know him, and he doesn't know me. if you knew me, perhaps. " thealled me crazy in new york times." >> he also pointed out that rising inequality can have negative consequences, in the sense that if it leaves us more hennomically vulnerable tha -- if the people who are rich cannot paper stuff, then everyone suffers. >> there are intermixed ideas.

he received the nobel prize in economics. creators isthe job crazy. who spende the rich and buy things and stimulate the economy is crazy. the news hour with -- oh gosh, the name escapes me -- they got into the discussion of the idiocy of rolex watches. talked about it as a symbol of terrible values and etc. etc. well, i think that is a little silly. so what?

i want to continue this conversation after the break and talk to you more about how you think we can heal the problem and what the responsibility is of the rich, of the one percent, of the technology companies. kleiner perkins caufield & byers, cofounder of returns with us after this quick break. ♪

>> welcome back to "bloomberg west" today. i am emily chang. we are back in two with tom of, kleinerounder perkins caufield & byers. i want to talk to you about that you felt upset about some things. let's talk about danielle

steele. were those attacks personal to you? >> i think this came from the recent attacks on her. they started complaining about the height of the hedge around her house. then they got into the idea that she writes these books, and is a snob. we are no longer married but are very close. i felt she was being victimized. she is the number one author in the world. she has over one billion books in print. she was awarded the french legion of honor for both literature and human to terry and activities. none of that was reported in the chronicle. if i were a night of the kingdom of norway, i would charge to her defense. so this was part of the process. >> and charge you did.

we will continue after a quick commercial break. we'll be right back with tom. ♪

>> welcome back to "bloomberg west" today. i am emily chang here with tom perkins joining us. watch, tom.d your and you said you could buy a sixpack of rolex is. >> that was naughty. that was off the air. it was a gift. it was a gift because i built a .ig boat thi >> you mention that you were from the 99% and this is

something you never thought you would be able to afford. tell me more about where you came from. nerd, a geek. i went to not a particularly good high school. it was very effortless glee oriented. very not -- it was athletic in orientation. i was not. then i went from being a geek in a school of jock and then a jock in a school of nerds. how quickly life can change. i got a great education at m.i.t. i went on to harvard business school. then i went to work for hewlett-packard, which was a very small company back then. this is in 1957. i think the revenues were under $20 million a year.

everything is learned about fincher i learned from david packard. we became close friends throughout his life. and he was my mentor. >> here we are once again later. you have made millions. you helped create billionaires. you created a multimillion dollar company. what is the responsibility of the company to the city of san francisco and to the people who live in the city of san francisco? >> i think we're talking about the leadership of the companies. i do not like the idea of companies giving money to political campaigns, even though it is legal. i do not like that. >> but what about policies? i am not talking about ceos giving millions of dollars away. i am talking about these companies, for example. what about these ones that offer free perks for employees? >> it is a competitive injury.

-- industry. they also keep people working during their launch our. ot all sweetness and honeybees. when they say,ut i don't give too many sweet -- free things because i want them to spend their money or market street. >> that is fine. my partner has been deeply engaged with the obama administration. he has been on task forces and committees. i think that is great. that politics is very, very, very important. we cannot ignore it. and we cannot ignore the direction that it is going. obviously, i am not a liberal. i am a conservative and a liberal community. thertheless, i think that

valley shouldn pay attention to where the liberal flag is leading currently. it is leading to demonizing the rich, blaming the lack of job , which is, the rich in my opinion, simply preposterous. middle, left, or in the you cannot ignore the drift in national politics. if you do ignore it, it will be to your regret. the 99%, they cannot ignore the rising housing prices. housing prices are up 50% in the last five years in san francisco. they have not released the most recent data. only 260 nine new housing units were created in 2011. at the same time, 25,000 new people moved here.

there just is not enough room for everyone. to live everybody wants in san francisco, and i do not blame them. we are getting into an area where my qualifications are very thin. when control and things like that have a lot to do at this. using capitalism to create more housing as part of the solution. building high-rises as part of the solution. and buses are part of the solution, i suppose. 99% acrosst the america should pay attention to politics, follow where it is going. do read the newspapers. do not try to get everything over twitter and facebook. it is not all there. and they should worry about the future. right now, i think that america

faces a very troubled future. least, thatfeel, at we have gone past the point of no return. i hope that i'm wrong. >> do you --? >> shorey do. i have family that lives in trailer parks. not immediate relatives, but family. >> what about the city of san francisco? >> it is always been overpriced and expensive. the floods and the huntington's live there, and so forth. being a long history of

wealthy, extravagant, and desirable, and a little crazy. ciscos the city of santa have an obligation to have a place for everyone -- san francisco have an obligation of a place for everyone? should everyone be able to live your? >> the marketplace will take care of that. the should stay out of economics of capitalism, in my opinion. >> you mentioned that you give millions to charity? use yourer money -- money to create an organization to combat some of these issues rather than write a letter? >> i am doing a bit of that. i believe in giving most of my money to medical institutions and institutions of higher education.

i give the cultural things, like the san francisco ballet, which i basically ran for one year a while ago. and i did some work in norway, which is how i became a norwegian night. knight. some of the dollars i was spreading around her now only worth five cents. i have given away one hell of a lot of money. >> you were called the king of silicon valley, at one point. how would you describe yourself? >> i have enough air gets to be royal. -- arrogance to be royal. i am an old man. i look back on my career and think i've accomplished a lot. if i had to do it again, i do

not know what i would've changed. i am at peace with myself. the fact that everybody now hates me is part of the game. i am sorry about that. that is not what it meant to do. >> cofounder of kleiner perkins caufield & byers. thank you for joining us today. we will be right back after this quick break. ♪

welcome back to "bloomberg west" today. i'm emily chang. apple reported earnings. they had a record gain. half it was unchanged. -- profit was unchanged. they sold 51 million iphones. has been covering apple since 1995.

apple broke records in many ways with this quarter. yet the stock is trading down. what is your take here? a the take is that this is time when investors asked themselves a question about the trade-off between revenue growth and profitability. apple, back in september, made the bet that they going to focus on making more profits. gross margins have shown a nice improvement and read them. that came at a cost to you to unit growth. that is been disappointing. my take is this. i think this will dominate the stock, this debate. i think once you get beyond that, investors have a sense and tend to get excited about apple products. there will be going to a bigger screen iphone in the fall. that is one of the product categories they are going to talk about on the conference call tonight. they said they are going to

that. i think the stock will go based on that. go ahead. that aconfident are you bigger screen iphone is coming out this fall? >> well, you are starting to hear some of the feedback from asia and the build. there is a 75% chance that is going to happen. second, if you go back and look at the iphone are the last seven years, they come back with larger form factors and different form factors. this is going to be at different cycle. a, whater wildcard is are the other product categories they're talking about? >> is this too little too late? >> we have been here before. be a chance that they are taking a step back. if you look at the iphone 5 release, or other times this year when the stock was really

going, and people were feeling they lost touch. it is easy to get that perspective on a day like today. alternately, the question is are they going after the write markets? -- right markets? i think that is an exciting opportunity for the stock. there is a broader question, into 2015 and beyond, and that is about how they continue to grow the business and get bigger and bigger. at least, over the next six to nine months, things are going to be looking well, despite what we are seeing tonight. >> is the bigger story the iphone? we have talked about other product categories. there's not been one since the ipad came out in 2010. we know the demand for iphones is slowing down. the growth is not what it was when it started out. is this going to be enough to keep apple growing? >> i think, as far as the

company to be a will to grow in the high single to load double digits, i think this is enough. then the question is, are investors willing to pay for that? there is a clear opportunity. it is more about what is going to happen in the back half of the year, which may seem a long ways away. to answer your question, i think it will be enough. i will be interested to see with the general public is thinking 32 six months from now. 6 months from now. it doesn't answer some of the long-term questions you a product. but that is the outlook for now. >> thank you so much for joining us t here on "bloomberg west" today. ♪

>> i am emily chang. this is "bloomberg west".

one of the things that help companies like apple is the design of the product. almost nobody in silicon valley has more experience. , create confidence, is all about unleashing creativity. jon ehrlichman has more from los angeles. >> he is one of the best-known names in the world of design. he has done that work on behalf of companies like apple. he cowrote this book with his brother. he david joins us now from stanford to talk little bit more about " creative confidence." you say that there's a lot of creativity in us. what is in the way, if you are an employee, or someone running a business, what is in the way? >> sometime around the fourth grade, somebody tells you you

are not creative. they mean you're not artistic, but they say you're not creative. then you opt out of that. what happens is that, as adults, we get to the point that we have that self image. then we are very afraid of being judged. it is kind of fear of being judged. instead of coming up with an you dod championing it, not want to get your name attached to the idea because it might fail and it would be bad for your career. call what psychologists self efficacy, where you are capable of realizing your dreams. we squelch those dreams because we think of ourselves as not creative. >> talk about some of the things that change that. obviously, you worked closely with steve jobs over the years. wanted what many would position as the impossible. he had a lot of creativity. that spurred a lot of creativity from you and the people that you work with.

is that we you need? a kick in the pants from something who was having done? >> a kick in the pants is a good thing? steve set a high bar, and we all try to make it. another approach at stanford is what we call guided mastery. we will take you through it. if you do not think of yourself of creative, we will take you through a series of small successes. the way that we do that with companies or individuals, is that we start with a little project. and we have it set up so that you will be successful coming up with new ideas. then we make the problem harder. we might make it a team project instead of an individual product -- project. we keep going. then, eventually what happens is something called flip you have just proven to yourself, and you feel it in your body that you are creative. you have gone through a series

of projects. you have been successful. you have actually come up with breakthrough ideas. that changes how you feel about yourself or have your team bills about themselves. in the book, you talk about constraints actually fueling creativity. you use the example of the director francis ford coppola ofing that when the budget the film is smaller, it gives you an opportunity to be more creative because i have to do more with less. >> i think that is absolutely true. we are always hoping for the big unrestrained budget, or unrestrained project. the truth is that is harder. if you can get it smaller, and you know who you are designing for, then you can get out there and build empathy for those people. you can find out the meaning for those people. if the project is scaled to the point where you know who are designing for, that is a big positive, rather than go out and do something good and come back

and tell us about it. it is really hard. >> you founded the school at stanford which is trying to bring the concerts of design to a wider group. this helps tohow shape ideas and businesses. just give us a little taste of it, in terms of getting the business further down the road. students --l take graduate students from all over the university. we put them on teams. and then we believe that we can innovate more routinely by having people from different disciplines. you have a business person. if you have a dr.. you have a philosopher and a civil engineer. and you can get them to build on each other's ideas then you can come up with something new to the world. we strongly believe in what we call a bias toward action. if you get into some of our classes, you have to release your product into the market five weeks in.

you have to have a product to market in five weeks or you are out of the class. let's talke go, about apple. a lot of people ask about the creativity at the company since the death of steve jobs. how would you describe the creativity of apple right now? >> i was involved heavily in the early days. i am not so much now. i would just be speculating. but you have to judge them by their products. as long as their products are and endeartive themselves to be able, and they fit with they really care about, and i think we are waiting to see what's next from them. we are expecting something new from them. whatave to judge them by they actually come up with. that is what steve always did. you can talk a lot. you can be in meetings. what actually goes out to the world is how they want to be judged. >> in our last 10 seconds.

you and steve are both going through cancer at the same time. what took you through that. time? give would come over and me strength. he was ahead of me in the system. what kept me creative was my daughter. she was about 16 years old at the time. and she was just trying to figure out how to -- i was trying to help her figure out how to get through my treatment. that was an exciting challenge. .elping her see the positive that kind of mindfulness and how i dealt with problem-solving aspects of the cancer. i think that was the fun that i had doing that. that is, if anything is fun during the treatment. >> david, thank you for your time. from stamford.te

>> thank you for watching this edition of "bloomberg west" today. we will see you tomorrow. ♪

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