hi everyone. welcome to a very special edition of "on the money." i'm becky quick reporting live. my conversation with the former president. we'll talk amid east, tax reform and his thoughts on the next president. >> i wonder if you know anyone -- is having a corporate conscientioco connecticut shens a good business? do corporations care about good business or do they buy the cheapest they can find? we'll speak to the inventor of the index fund about the smartest, cheap skpes best

places to put your must be. "on the money" begins right now. here's a look at what's making news as we head to a new week "on the money." a report card on america's money slg out. the final reading of the gross domestic product that brought us the size and scope of the economy showed an increase last quarter revised from 4.2%. that's the best number since last quarter 2011. dow dropping more than 250 points, concerns about the fed tight inning and worries about europe. the markets bounced back on friday. new home sales are surge issing. sales in august climbed to highest level since 2008. a sign of strong consumer demand. they were up to 18% of 5400 according to the commerce department. if you're looking for a taste of hardy stout in the morning, starbucks has what you're

looking for. the chain is testing a latte with the same dark flavor. it's tested at a handful of stores. in case you're wondering, it does not contain alcohol. . he's an investing legend. the man that invented index funds. his view investing is one you'll want to know about. jack joins us this morning. thank you for being here. >> good to be with you always becky. >> jack, it was a rough week for the markets. investors are feeling a little nervous about things. i know you ignore the day-to-day. how closely do you watch feds and interest rates? >> i think the odds are good we can do that. they're not 100%, nothing in our business is. the market you mentioned investors are concerned. if i can correct you becky -- >> you're right traders. >> short term speculators are concerned. i don't think long term invest

tors need to worry. >> you feel good about things overall. you tell people slow and steady. >> clearly the market is exuberant. it's not cheaply priced. i don't see the good option of getting and out waiting because nobody is going to tell you if you get out when to get back in. >> jack, this week, the california employer retirement fund announced it would no longer be investing in hedge funds. do you think there's a place for hedge funds with more sophisticated investors? >> i think they've gotten a lot of good news over the years but not made much money. numbers are riddling. i see a selection risk. there's probably 1,000 hedge funds out there, maybe more. a quarter go out of business every year, smaller ones. i don't see permanent advantage in hedge funds.

i see a perm nantd disadvantage. they charge a lot of money. >> let's talk about your formula. you should own your own age in terms of bonds. i wonder with what we've seen happening in the bond market lately with the idea that wekds see interest rates about to rise, # i just wonder if you ever change that strategy or if there's ever a time to kind of take something else into account? >> well, first just to clarify my position on this rule of thumb i've always used, your age and something to do with your amount of percentage of your portfolio and bonds, i include in that the value capitalized of your social security. for a lot of people, most people actually, between $250,000 and $500,000. it's huge. it's got a cost of living hedge. if the value of your own social security is $500,000 and you're 100% invested in stocks, you're

there for 50/50 under my theory. take into account pensions and social security and all that. with that said, i'm pretty comfortable with the traditional 60% stocks, 40% bonds allocation. i don't think you need to adjust everyday or every quarter. >> jack, there aren't many legendary investors like yourself. every once in a while, somebody who have really is able to invest decade after decade and show great growth, what are those -- one is bill gross, king of the bonds. he announced this week he was leaving pimco, the bond he built up and going to janice. what do you think of that? >> first of all bill gross is a legend. his industry had a lot of legends that have come and gone. bill gross has basically been good all his own career. he's smart, outspoken.

he has a high level of integrity. it's -- i think it's sad in a lot of ways to have him leave firm he created to go to janus. for bill it will be easier to manage the portfolio. i think it's pimco's loss. >> if you had a few words wisd, what would they be? >> stay to course. if you get out, no one is going to tell you when to get back in. don't think you can outguess the market. nobody can. >> thank you for joining us. always a pleasure talking to you. >> okay becky. great to be with you again. up next on this special edition of "on the money," the former president talks taxes, corporate inversions and how long we'll be in the middle east. a matter of conscience. does it pay off for companies to do the right thing?

as we head to a break, take a look at how the stock market ended the week.

william jefferson clinton oversaw a broad period of economic expansion in the united states. he was the first baby boomer president. these days he devotes time to his charitable foundation. by theway he happens to be an expecting grandfather. the 42nd president of the united states has a lot to say. all you have to do is ask. that's what i did at the clinton global initiative. >> do i think it will be extended involvement with air power and with providing intelligence and other institutional support to the people who are fighting isis and trying to create a more inclusive set of governments in

the middle east. inclusive governments is basically the only thing that works in a situation like that. yes, i think it will be going on a while. on the other hand, no, i don't think it means it projects or prolonged involvement in a land war. we don't need to be there on the ground. i don't think that it means a land war in iraq. i actually think in this case, the president and administration's strategy has a way to see. >> let's turn to some of the things we've been focussing on in the united states. that's the economy. the stock market has been going gangbusters. a lot of people are feeling better because home prices have risen. at the same time we've seen the middle class stagnate. what's missing, what's wrong, and how do we miss it? >> median income hasn't gone up three reasons. labor markets aren't tight enough. we haven't raised the minimum wage as we should.

we haven't raised the median income and have more poor people working their way into it. the common nation of jobs has to pay on average higher wages. the third thing is that gdp growth doesn't need growth in median incomes because company after company takes more of its profits and spends it on the dividends, stock buy-backs, management increases and less on sharing it with the employees broadly. although i wouldn't be surprised if this the next five years that didn't start to change again. i predict to you the next big front in this will be corporations moving away from what was a new idea in the 70s which is only thing that matters for the stockholders and the executives that should be paid according to the stock price. back to maybe the employees and

the customers should matter more. in the 21st century world, doing good and doing well will be closer aligned. it will be the profitable to do the right thing. >> are corporate inversions unpatriotic? it's been called that in lots places in washington. >> a lot of companies feel duty bound to pay the lowest taxes they can pay. america has to face the fact we have not reformed our corporate tax laws when 100% of the people from democrats, republicans, independents agree we need to. we -- i should make full disclosure -- i signed and supported the bill that raised the corporate taxes in america to the level they are now. okay. so let me make full disclosurdi. i remember the decision and the day we made it. i said we can ask for more, but don't go above the average rate. that average rate was in 35%.

we hit it bulls eye. now, only japanese companies for a variety of cultural reasons, don't leave. pay about what our companies do. we have the highest over all corporate tax rates in the world. we need tax reform. meanwhile, the treasury should do what they can. it's their duty to collect whatever money is owed under american law. if they can find a way to discourage people from moving overseas, they ought to. the best discouragement is reform taxes and give incentives to now nearly $2 trillion overseas. and to put some in infrastructure and back to put rest of america back to work. >> overhaling the corporate tax code would take two sides willing to talk with each other and work with each other in washington. i wonder if you know anyone that might go to washington in 2016 and start that process?

>> that may be -- [ applause ] i have been assaulted by cleverness on all fronts for quite a long while. that may be the cleverest i've ever heard. >> my thanks to president clinton. up next, from the clinton global initiative, corporate conscience and the bottom line. one company with a bad history, and how it's trying to repair its image and action. >> do you think it changes your consumer's mind? do they vote with their wallets? find us on facebook. facebook.com/otm. we needed 30 new hires for our call center.

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do corporate ceos care about you? here at the clinton global initiative, i spoke to executives at three major consumer brands about the importance of responsibility and if consumers are buying it. all three of you have companies who have had to deal with environmental concerns, other concerns that have gone around. you have all taken decisive action. i was hoping you could talk about b what each of you has done. lisa, first of all, you spent most your career in epa and government agencies with policing there. tell us what you're doing at your new job at apple. >> it's a wonderful position because as i tell people, it's about reach and scale.

this is a corporation that when we make one change, when we move all of our data centers to 100% renewable energy, it scales automatically because of the size of the company. so the challenge which is really fun, and i'm sure we'll all agree, is to build on a real history of innovation and of accomplishment. then to figure out where you can do the next things. in this time of shrinking governments, public sector is doing all it can. the private sector can do things that can be as impactful. >> one of the things you've been focussing with is small farmers. it's been a huge initiative. >> we call it cocoa link. we've put 50,000 mobile phones in hands of remote farmers in countries. we partner with private sector as well as the government to make that available. it brings market information, pricing information. one of the neat things about using that kind of technology is

that you have a farmer in a remote area. if you have a problem, they may not have access to ask a question. now with these phones, they can take a picture of the bug or picture of the tree or fungus or whatever it might be and send it off to the top universities around the world. five minutes later, they have a response and an action plan. >> did you have any idea what a fire storm genetically modified food would be? >> um, no. agriculture and the whole food debate is front and center. we have a place at the table. i firmly believe that agriculture has such a strong part to play in mitigating the effects of climate change. in a busy, crowded world that's going to become more busy and crowded, we need to figure out how to produce a lot more foods on a shrinking footprint and consume less. a piece of the action is

collaborating much more actively across the entire food chain. it's hard for us to talk to consumers. we're so far back. we've been doing a lot more work with food companies. food companies are getting more engaged in the conversation. >> i'd love to hear from you three what you hear back from customers. li lisa, apple is a young, hip, cool company. >> hoping that rubs off on me. >> what do you hear back from customers? >> well you know, this is about -- it's actually an interesting place to be. the company is itself innovative and drives initiatives because of the desire to be on the cutting edge of things. what we find though is there's a great feedback loop there. what people love about the brand is that innovation. taking impossible and turning it into done. if anything, you know, it's

holding ourselves to the bar as high as possible and though the taking -- not taking the current technology or current approach for granted but saying can we go beyond that? that's what you see everyday at apple. >> jp, you have one of ten brands my kids recognize. >> excellent. >> don't think they care where you get the chocolate. >> consumers really do care. we ask ourselves what is a consumeer's changing relationship with food n. our country, a high percentage of our needs are met in terms of diet. as we ask ourselves questions around this choice, it's transparency. it's a good thing. people want to know more about from farm to fork, where did does my food come from? that's a good thing. >> you talk about programs that you've put on. do you think it actually changes your consumer's mind? do you think they vote with

their wallets when it comes down to this? lisa? >> the first is a journey. you have to do it. you have to take the actions. it's fascinating all of us started with things we've done not aspirations we might have. here are the proof points, places we found where our employees and cust -- customers can engage. the aspects is harder than it sounds but incredibly important. jp mentioned transparency. i want to echo that. you cannot be 100% transparent when in a business competing. you can be open and honest and engaging. our ceo likes to say we keep our product development somewhat secret at apple. on clean energy, we want people to know what we're doing. >> how do you tell people not

sounding like you're bragging, not some pr campaign and have it turn back on you? >> that's a great question. a piece of this is consistency. in the business we're in, time lines are long. product cycles take a long time. choosing a handful of goals, being realistic on the milestones and consistent on how you report on those. it's interesting with branded companies. i think for me it's been the power of collaboration. companies can't do this on their own. >> hugh, lisa, jp, i'd like to thank all of you. and this is next on the global initiative. it's a place where people can come share knowledge and ideas. it's beautiful.

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for more on our show and on our guests, go to our website, otm.cnbc.com. follow us on twitter @on the money. on monday, personal income and spending figures for august come out. tuesday, we'll get consumer confidence numbers and case shiller home index. on wednesday, theism manufacturing index is released. auto sales for the month of september and breast cancer awareness month begins. on friday, the big number of the week when the employment report for september comes out. joining me right now is shannon skyler, corporate responsibility leader at pwc. thanks for joining us today.

>> thank you for having he. >> we've been talking about corporate responsibility and what it really means. can you lay out the landscape in corporate america today? >> sure. when you look at corporate responsibility, it's evolved over the years. people know it most of philanthropy. about four or five years ago it 14i69ed to this whole notion around corporate social responsibility and cause marketing. today, it's a lot about purpose. it's inherit to what the company is meant to do, to the trades and leaderships they bring in. it's about connecting economic, social and environmental goods. >> it seems to me there's a fine line. a company has to be care nfl making sure they're letting people know the good works they're doing but not sounding like they're trying to get good pr. >> absolutely. the thing to know is when arrogant and when you're not. figure out how to tell you about hit but don't want you to think the reason i'm telling you about it is so you'll think i'm good.

that's the change between somebody wanting to program and talk about hit and somebody more focused on systemic adoption of changing systems in place. >> do you think it resinates more with younger consumers? >> studies show millennial are more engaged. they want to make an impact on their job. we see that with baby boomers because of what they've lost and opportunities they haven't necessarily taken during their lives. now they have a chance to give back and do something they didn't do when younger. >> thank you for your time today. it's been great you can at thatting to you. >> thank you very much. that's the show for today. i'm becky quick. thank you for joining me. each week we're here on "on the money." see you next weekend. the smartest or nothing. e lightest. the quietest or nothing. the sleekest... ...sexiest, ...baddest, ...safest, ...tightest, ...quickest,

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[ticking] >> are you guys happy, glad that you decided to come to seed? >> both: yes. >> do you think you'll stay here till you graduate? >> both: yes. >> you're certain of that? >> both: yes. >> why are you so certain? >> 'cause i know this is where i want to be, and this is where my future is gonna start. [ticking] >> most of the men got here by committing violent crimes: assault, rape, and murder. it's not the type of place you'd expect to walk into and find the inmates studying 18th-century european history. >> if you brought with you-- and i hope you did-- olympe de gouges' declaration of the rights of woman and the female citizen... >> inmates in college programs are easier for the prison system to manage.