>> "big problems/big thinkers" is brought to you by cisco. there has never been a better time to change the world. ♪ terre: we asked some of the best

minds in the world from business, government, the arts, and academia, what are the most urgent problems facing humanity, and how do we solve them? the result is "big problems/big thinkers." >> what is the number one major problem facing mankind? >> i think it is the lack of education. >> politics has been getting dumber and dumber. >> there is a balance of green spirit. >> if we don't have a more sustainable way -- >> everybody has the capability of making a difference. >> remember your humanity. and forget the rest. terre: welcome to "big problems/big thinkers." i'm terre blair. in this series, we confront the biggest problems facing the human race. climate change, nuclear proliferation, social unrest. we examine each issue by asking if there is ethical framework that can help us face these problems and solve them. we will hear from an ordinary group of leaders as they search for answers and perhaps inspire us collectively to take action. in this first episode, these exceptional men and women agree that climate change is one of the top threats to our existence. will we be up to the challenge? will we take action? >> when i was born, 70 years ago, there were slightly over 2

billion people in the world. now there's almost 7 billion. the number of people on the planet has increased by three and a half times in the life of one person. this has never happened before. >> it demonstrated the interconnectedness of our system and the destructive aspect of certain kinds of incentives. they, i could, if i were a bank, give a mortgage to someone who needed a home, and showed no income statement. people who should not have taken

out mortgages were taking mortgages. people should have never bundled those mortgages into bonds. people all over the world were bundling them into bonds. those were rating those mortgages and stamping them aaa. >> they were all doing what was legal, in that sense. it blew up. the collateral damage has been devastated. to payople did not want attention. they were sold to professionals. the managers of mutual funds, hedge funds, these are sophisticated people,

supposedly. they look to these and knew exactly what was in these packages. are aaa.gs everythingly aaa if goes wrong at the same time. think, theystop and must be high-yield because they are much riskier. no one wants to play themselves for taking a risk. running was the person citibank at the time. he said, when the music is playing, you have to get up and dance. if you are the guy who stands up and says, i will behave sustainably, we will not do that, that becomes professionally risky.

we got into this short-term loop . there were banks who did the right thing. jp morgan did not get as cut up as other banks. on.ceo was looked could you have foreseen it? , yeah, there were a lot of people that foresaw it. stop selling your products, stop taking the job. sell your job for a lower price. the next person has more leverage built-in. we wanted everyone to have a mortgage, whether they could afford it or not. encouragedizations everybody, make the loan regardless. dark that was if you did not

make the loan, you were distributing a -- discriminate against people who could not afford it. the trouble is there are no quick answers and we tried to create one. you create the bubble and then the bubble collapses. throughoutad bubbles history. they manifest themselves differently. we will have them in the future. >> human beings, we get smarter about a lot of things, in terms of how to produce things. we do not get rid of basic human emotions. greed and fear will always operate the same way. greedry decade or so, gets out of context. how could we have been so stupid. and revise history

not havewe should known. back,k, if you look people who want to treasury thed this country because rewriting of history says you should not have bailed out the companies. ridiculous. you had no choice but to do that. everyone wanted them to be overleveraged. we live in a world where somebody else has to be guilty. we go after the bankers, which we have always done. we are hardly without sin. something that everybody wanted. to expand.the world

one day they don't. thef you look at 2008, and institutions that they'll, or can close, you take aig and andgroup, freddie mac fannie mae. the stockholders last hundreds and hundreds of dollars. if you've got a thousand dollars investment, you end up with $100 or nothing. nomy view, there has been war reaction created by stock holders. the moral hazard exists, i think, with the top executives who walked away with hundreds of millions of dollars and did not pay the price for their failure. we had bigger and bigger financial institutions with all kinds of activities.

their problems became other people's problems. the upside was lots of money and lots of glory. isone point that is made when you are in a world that is this fact -- flat, it is also ethically independent. we are going nuts, giving mortgages to greeks to build their third vacation home or second pool, whatever they were doing. when it blew up, and you discover that your portfolio was down 5% because people were worried whether greece could default or pay back the sovereign debts, you have said, wait a minute, i'm not just technically interconnected, and

ethically dependent. that's not really affect your 401(k). you were happy. we all have to think much more. >> trust makes the world function better. congress without trust is very awkward. we saw that in september 2008. the government had to come in and essentially guarantee those funds. if you have 50 million americans who believe it to be the case in economic train comes to a halt fast. , functioning, trustworthy economic system worldwide is a huge plus. we are used to it in the united states.

>> to believe the international financial stability is essential to world peace? >> we will never have perfect international financial stability. people continue to make mistakes. that historyys does not repeat itself, but it rhymes. that is pretty much the nature. >> as warren buffett says, we will never have perfect international stability, that is the case for financial markets. can they mitigate their pain of future crises? that is next. >> you cannot give a loan to someone who cannot pay it back.

>> as soon as you had two cavemen with caves, one ask why does he have shrubs, and we don't.

>> welcome back to pick problems, big thinkers. after the near collapse of global markets, alan greenspan said, "no to crises have anything in common except human nature." that is where we pick up with thomas friedman. individuals,we, as

play? do better? do better? >> when someone comes to you telling you what you need to do is not even show your income statement, that is a pretty good sign that if it sounds too good to be true, it usually is. to we have to pass a law that tells bankers you cannot give a loan to someone who cannot pay back-check what do we have to pay a law to do that? people were doing such unsustainable things because they thought, if i will be gone, you will be gone. i will sell you this mortgage because i will be gone. off to a bank in france, they will be gone.

oh, you cannot pay for your house? no problem. just sell it. we all know how prices will go up. then, you will be gone. it was an epidemic. >> the people who got into huge trouble were not just ripples but tsunamis throughout the world. with money.ay that should not happen. bank, ande running a is so important that the government needs to come in to save it, those people, in my view, should be bankrupt. that has not happened. even though we will have bubbles and we have always had bubbles, do you believe people have the ability to transform the values? fairly pessimistic

about the future. what really gets a in trouble is the fact that his wife reminds him that he is dumber than he has, yet he is making money on.com stocks or because he is financing more of a house than he can handle. looking at that guy and thinking, he is getting richer, and i'm not, that drives people crazy. i think it will be very difficult to unwind our materialistic impulses. partially because it is tied to something that is very basic. as soon as you had two cavemen with caves, one of them looked at the other and said, why is his cave figure? i look at you and i compare you

to me. >> people who make a lot of money in our country tend to trade in their money for rewards, including rewards that come from being recognized. there is a model that comes when there is a conflict between doing the thing that will bring you honor and the thing that will bring you money, in many cases. i have a name for this. i call it the bernie madoff problem. financier,inancial -- incredibly honored. he was someone who is getting money and honor for doing something profoundly antisocial and dishonorable. then, he was caught, fortunately. world thankcreate a .rges people to be successful

as i say, finances necessary. you also want them to see that money is not the way to measure your life. always a tension between the market systems and unleashing it while, at the same toe, not causing it to go excess. >> different societies will come out it into ways. you will see that around the world. over all, we will learn more from other successes as time goes by. will be, as a whole, ago -- 00-200 years years from now.

it crosses borders, it does me some good. we want the rest of the world to prosper. we should one anyway as human beings. beyond that, there is a very utilitarian aspect to wishing the world well. you do not want the united states to be an island of 300 million people doing monday facility while 600 million people are sitting there in vs of us. >> money is such a parcel force. i think it is more powerful the nature in some ways. we do a bad job often in attributing an accurate value to something. the economic crisis is a perfect example of that. outbody created fake value of something that did not really have value. eventually it was going to crash. it did.

>> the dow had the biggest drop ever. not want to have banks that are too big to fail. we do want to have gigantic ranks because that is the only way you can compete in this world and fund companies that will create the companies that you want and a better life for americans and people around the world. instead of keeping the banks from making money and giving bones and taking risk, you have to protect the banks from going under, but not try to change them so they cannot possibly cope under because then they cannot to their function. someone finances to vomit, there is no way to create jobs, wealth, good life, good and thingsystems,

for the future. >> growth is not everything but it is the source of all good things. if you have a growing economy, people are more open to corporation. when you do not have growth, , and youe competing will get more snarly, angry, probably racist, homophobic, people would use whatever emotional hooks they can to get a piece of the pie. to theis very important tenant of the world. >> i think we have to think more about growth with the quality which than the inequality we have been very good at creating over the last several years.

there are going to be winners and losers, and the people who are currently winning, risk so they have an interest in keeping things the way they are. >> i am concerned that we are burgeoning society with so many roles to protect ourselves from any eventuality that it does not work. the real world is full of risk. if you want to prevent all risk, then you don't have anything. >> i sent a letter roughly every two years. basically i say, don't do anything that you would not be happy to have written about on morningt pages tomorrow

. i tell them one other thing, if is,reason you are doing it everyone else is doing it, that is not good enough. it is not, can we do it, it is, should we do it? very important in all aspects of life. close toem, if it is the line, it is over the line. >> the post crisis response has included line after line of questions. yet, the question remains, after a near death experience, are

individuals around the world close enough to be able to say when enough is enough. the answer to that question may determine when people are hurt when the next crisis comes. thank you for watching.

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