tv The Kelly File FOX News December 26, 2015 11:00pm-12:01am PST
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ople, by the people, for the people shall not perish from the earth." just about one month from now voters in the iowa will make their pick for the presidential nomination in what has been hard-fought and controversial race for the white house. tonight we get the rare chance to speak with one of the men virtually every republican wants on his or her name, an entrepreneur. an american pioneer. a man democrats love to hate. welcome to the kelly file, everyone. i'm megyn kelly. charles koch is one of the richest men in the world. for some there is code on the left for what is wrong with big money and politics yet there is so much more to this political man and his donations.
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tonight we look at man behind the myth from his childhood when his dad insisted he wasn't raising some country club kid and made charles work the family ranch and hard. to his reluctant decision it take over the family business, ultimately turning koch industry to one of the most successful on the planet. we will discuss his political philosophy. that might surprise you. and attackes from president obama on down. even the death threats he received from some of his detractors. tonight our full interview with charles koch, like you've never seen him before. . >> shadow billionaires, pouring unlimited money into our democracy to rig the system,
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benefit themselves and the wealthiest 1%. >> they don't care what anybody says except for themselves and corporate masses like the koch brothers. they have one masser, that's money. >> when people hear the name, koch brothers, it has a negative connotation. >> i will stand up to all the attacks from the super pacs and koch brothers every chance i get. even president obama joined in. putting charles and his brother, david, who together employ nearly 60,000 americans on a so-called enemy list during campaign 2012. >> when you start seeing massive lobbying efforts, backed by fossil fuel interests or conservative think tanks or the koch brothers, that's a problem. >> the koch brothers donate to republicans and support fossil fuels among other forms of energy. they own pipe lines and lots of successful products you likely
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know very well. koch grew up in wichita, kansas. son of fred koch who struck is rich in the energy business and who along with wife mary raised four sons on the family ranch. charles married liz four decades ago. they've raised four children and appear devoted to one another. charles eventually took over his father's business and grew it into the second largest private firm in america. the company worth $21 million in 1961, is now worth $100 billion. charles and david donated hundreds of millions to help fight cancer, poverty, and to encourage entrepreneurship in addition to their political donations. so how exactly did charles koch, a man demonized by the president, former senate majority leader, and house minority leader to name a few, become so feared and so successful? for the first time, he tells us from his home in wichita, banked up a little, thanks to foot
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surgery, wearing a cast decorated by his wife. ready to talk about life, politics, and his new book, good profit. so your book "good profit" reads to me like a love letter to your father. how big of an influence was he on you? >> as both my parents were, tremendous influence on me and my father's influence came from that. he decided, well probably before we were born, that as he put it, i'm not going to have any kids who are country club bums. so i bore the brunt of it for whatever reason. he had me working virtually all of my spare time. because i ducked around as much as i could, starting at age six. started by digging up dandy lions. you don't pull them because the roots go down so you have to dig
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down in a hundred degree heat in the summer here. six years old. feeling sorry for myself. all my friends were out playing, swimming. i was working, i would say, why does my father hate me and their father loves them. from then on, i graduated to other things. shoveling stalls, digging ditches. digging post holes. whatever. and that was the best thing. >> he worked you? >> he wanted to instill the work ethic. because he knew, if you don't learn to work, to be more productive, to improve your efficiency, to cooperate with other people, at an early age, you may never learn the habits so you can't make a contribution and can't be successful. but as i said, i bore the brunt of it. years later, i asked my father, i said, pop, why were you so much harder on me than my
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younger brothers. he said, son, you plum wore me out. >> so despite troubles you had growing up, you wound up m.i. it. you said you never had the intention of working for your dad but later found out he had a different plan for you. >> yes. one of his favorite sayings was you can tell the dutch but you can't tell them much. and the thought of going back and working for him, he was such a disciplinarian growing up, i had no idea we would do that. i worked for a consulting firm in boston. >> you had an older brother. you thought he would take over, i guess. >> no, i didn't. he was interested in the arts, literature and music. >> who did you think would be heir apparent? your twin brother? >> i had no idea. or whether there would be. but my father kept calling me in boston trying to get me to come
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back and work for the company. i kept turning him down. finally, he called me and said, son, my health is not good. i don't have that long to live. either you come back to run the company or i'm going to have to sell it. and we have a separate company called koch engineering, which makes process equipment. and it has sales of like $2 million and it is break even. it's a mess. you can come back and run it and i'll let you run it any way you want. the only thing you need to get my permission for is to sell it. and i said, hey, this sounds better. >> i'm actually going to run it. >> i came back. he lived longer than he thought. he lived six years. that was 1961 when i came back and he lived until 1967. and he was a treat to work with. >> tell us about the first piece of advice your dad gave you when you took over as ceo. the fir thing he told you to do.
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>> he said -- well his first words when i arrived is, son, i hope your first deal is a loser. otherwise you'll think you're a lot smarter than you are. but he had tremendous values. tremendous integrity, humility. work ethic. and terrific thirst for knowledge. and he always told me, he said, son, learn everything you can. you will never know when it is useful. when it will really help you. >> to build his $100 billion empire, charles koch made hiring decisions based on a person's values. over talent. up next, he explains why integrity and the ability to admit mistakes are crucial. announcer: it's time to make room
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now i can download my dvr recordings and take them anywhere. ready or not, here i come! (whispers) now hide-and-seek time can also be catch-up-on-my-shows time. here i come! can't find you anywhere! don't settle for u-verse. x1 from xfinity will change the way you experience tv. koch industries, a value of $100 billion. how do you take it it a billion dollar industry? >> well, it is being realistic. i'm good at certain things.
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i'm not good at others. i didn't do it by myself. i had tremendous help. tremendous people. so there's no reason to think i have all the answers because i don't. i've made more mistakes than most people. so that keeps you humble. >> you wrote in the book about the trap of overconfidence in a business and a person. >> oh, absolutely. yeah. yeah. hubris, arrogance, one step ahead of loss of integrity. if you think you're better than other people, you know more, then you're going to think, as many leaders have, that the rules don't apply to them. so they lose their integrity. once you lose your humility, you lose your integrity. >> the book is called good profit. you talk in the book a lot about, how of course you want it make money. not just your company but american companies should want to make money but it is equally
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important how you make it and with whom. >> the starting point in my philosophy, the starting point, you know, for long-term success is not thinking how i do maximize my profit. it's how do i create the most profit, the most value for others, for my customers and in society. and, and then as you're able to do that, then you can worry about i want to be compensated for all the value i'm creating for others. and that needs to be every -- if a business person wants to be successful over time, that needs to be the attitude. and the attitude through the entire organization. >> you say you have always prized value over talent in your hiring decisions. really? >> absolutely. i've had the philosophy that john adams expressed, in the kind of system they were trying
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to create in this country. that this is a system for moral people, it will work for no other. >> you're tell meg some hot shot salesman from new york could come down here and sure he may bend the rules here or there but he is a producer, but you wouldn't hire that guy? >> absolutely not. if he bends the rules, we won't have him. that's what we find out in the job interview. >> how do you find this out in a job interview. >> we put the candidate in different situations. like the candidate that he doesn't think someone is important and they take him to the cafeteria. how they treat the staff at the cafeteria. we see how they answer questions. we ask, gosh, did you have any problems where you were? did you make any mistakes? did they say, no, oh, no, but the company was so screwed up and they wouldn't listen to me.
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we don't want that. >> what does the inability to admit mistakes tell you? >> they don't have humility or probably integrity. that's impossible. if you try to do anything, you make mistakes. that's how you learn. >> don't you want all the hot shot mbas from harvard and elsewhere? >> we find we do better from community colleges, rural colleges. like our, after i was president of koch industries, our next presidents were -- one didn't graduate from college. went a couple of years to, let's see, murray stating ary culture college. went for a couple years. another from texas a&m. another one university of tulsa. and the current president is from a state college. >> how come? >> because we believe they have value for long-term success. we're not in it to make a quick
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buck. we're in it to maximize value over time. >> at koch industries, even you get evaluated, is that true? >> that's true. >> how does that work? >> that works great. i learn a lot. >> aren't you afraid of a bruised ego? >> no. here's the thing. i think all of us need this attitude. do you want to have your feelings hurt a little bit because you've got some negative feedback? or do you want to continue down the disastrous track you're on and have a huge disaster. talk about a bruised ego. it may ruin your career. >> you read about this in the book, in business and in child rearing, you say we see too much of that today, explain that. >> well, i apply this, my same philosophy, in all aspect of life. and applied it in raising our children. so the first thing to me is
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apparent that i thought i needed to do as a father was to give our -- to only ask our children to do things that i would do. to only preach values that i was willing to live by. because your children can spot hypocrisy a mile away. then they are turned off. they have no respect for you or what you believe. the second one is don't try to get them to be like you or by some image. you understand what they have an aptitude for and what they have a passion for. and you encourage the full development of that. and then you try to instill what i believe are the values required for success. >> you're not a big fan of the participation trophy? >> no. it needs to be earned success. otherwise it doesn't mean anything. >> is it true that any employee at koch can earn more than his boss? >> oh, absolutely.
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we try to reward people according to the value they create. value they create in society and value they create for the company. >> and that you will hire based on talent even if you don't have an open spot necessarily? >> on value, yeah. if we find somebody who has a great combination of talent that we think we can use and values consistent with our principles, we want to hire them. >> how can you hold to a budget under those circumstances? >> well we're not big on budgets. we want to vallate everything to according, will it create value and eliminate whatever doesn't create value. >> you also talk about how the willingness to fail can also improve one's personal happiness. the willing to try to experiment and risk failure. >> right. if you never fail then you're probably not doing very much. you're certainly not innovating.
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you're not improving. only way you improve is to try new things. >> what if you're a big success and you don't want to risk it? >> then that's -- and that's -- that's one of my principles. success is one of the worst enemies of success. that is, many times failure leads to more success than success because success tends to breed complacency and lack of humility. >> critics suggest charles koch opposes green energy and government subsidies because they hurt the koch bottom line. not so, says koch. up next, why he believes corporate welfare is a disaster for all of us. and koch opens up about president obama's personal attacks on him. on the comments via president obama, beneath the dignity of the office?m joel waldman.
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it's crippling our economy. it is corrupting the business industry. people think that's just direct cash subsidies but the whole economy now is riddled with it. not only cash subsidies. it is government to guarantees. government loans. mandating they buy your product rather than somebody else's. getting regulations. limits on trade. all of which makes the -- the average person worse off and makes certain privileged business people wealthy. so the riches of the haves versus the have nots. >> the obama administration says we have to help these solar
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companies, for example. they need a running start and they're not going to get it unless they have government subsidies. you say absolutely not. critics say, well, that's because you benefit. you're in favor of fossil fuels, not solar energy. >> we oppose all corporate welfare, whether we benefit or not. you will find our policy positions mainly hurt our profitability rather than help it. so what we look at is a policy or are our actions contributing to helping people improve their lives. or is it hurting them? is it making their lives worse. and all of this corporate welfare including this so-called green welfare is making people's lives worse. because it's increasing the cost of energy. which is mostly born by the poor. making the u.s. less competitive
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and it's even under the epa studies and doing nothing for any future climate. >> what about china? we've heard one of the presidential candidates, donald trump hear about how they are devaluing currency and that the next president needs to put a stop to that by perhaps imposing a tariff on their goods. >> tariffs are disaster. the way -- the principal way that human beings have gotten out of extreme poverty is free trade. because then we have the division of trade. china can concentrate on what they do best. we concentrate on what we do best. and we exchange. if you think, well i have to make all my clothes. i have to make -- produce all my food. you would be living a starvation
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level and living in a cave probably. >> but he says we're getting the short end of the deal. he talks about mexico, too. about how u.s. manufacturers are building plants in mexico. he says you want it build the cars in the united states, you have to pay extra. that will stop you from building the plant down there. >> that will help some manufacturers, maybe save them, who are less efficient than they are in mexico or china. but it hurts everybody else. because now the cars or whatever they are producing is more expensive or less quality because there is less competition. so you need to increase competition and innovation rather than destroy it. >> this is an issue, your stand, for economic freedom. not just in your business world but in the political world. not long ago president obama himself came out and attacked you. it's not the first time p. but he said the koch brothers
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are trying to prevent new clean energy businesses from succeeding. you came out and in a rare public statement said, with you are flabbergasted by that accusation. why? >> because the opposite is true. all of our policies are based on whether it will make -- enable people to improve their lives or make their lives worse. and we're all for green energy. we're investing a tremendous amount to develop ways to improve energy. and to -- and to reduce biproducts. so what he said is the opposite of the truth. and we oppose subsidies that we get that are engrained in the economy that help big companies like us and hurt start-ups. so these current policies aren't exactly helping the small business. they are destroying it.
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and the median income has dropped over the last eight years has dropped. it hasn't gone up. so the poor and middle class are hurt by the two-tiered system that is created. what i mean bay two-tiered system is a system that is destroying opportunities for the disadvantaged and creating welfare for the wealthy. >> on the comments made by president obama, beneath the dignity of the office? >> i think it is to misrepresent what a company stands for and attacking private citizens for trying to help people improve their lives. >> do you believe that the democrats, including the president have tried to make boogie men out of you and your brother, david? >> oh, definitely. that's a full-time job on their part. i mean, and that's -- that's why i've never been that fond of
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politics. and only got into it recently, kicking and screaming. and i don't -- what i give to charities, the part that goes -- or to -- that i donate, the part that goes to politics is a very, very small piece of that. because i don't think politicians are going to reverse the trajectory of this country. i think it is going to depend on the american people understanding what is fair and what makes their lives better. and so i have been working for over 50 years on better understanding that and communicating that. >> why do you think they've been so relentless in their attacks? harry reid, your brother, david, pointed out, mentioned the koch brothers 289 times from the senate floor. they have painted you as evil. they actually put you, the white house actually put you, on an enemies list in the 2012 campaign.
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>> well, i mean, that's very sad that that's what we've come to. because in fact what we're trying to do is the opposite. >> does it bother you? >> well, i mean, as harry truman said, if you can't stand the heat, don't go in the kitchen. i would prefer everybody to think i'm wonderful. but that isn't going to happen. but the way i -- >> is it dangerous? i know you're gotten death threats? >> yeah. i get a lot of death threats. but the way i look at it is, i feel i have a moral obligation to do the best i can to make the country better for everybody. and that threatens certain people because they are going to have much less power. i want the power to go back to people making decisions over their own lives rather than some
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experts making it. and so i would rather die for something than live for anything. the analogy i like it use is, that i feel probably the way martin luther said when he was on trial, he said, here i stand. i can do no other. so if i weren't doing the best i could to improve things, i would be so frustrated, i couldn't live with myself. >> many americans believe the koch brothers are conservative to the core. but charles koch actually describes himself as a classical liberal. is he a man ready to declare his support for any particular presidential candidates? we'll ask him, next.
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technology out there, if we will change the regulatory regime, tax regime, to be forward looking and get rid of the subsidies and controls and mandates and let people be free to use this technology, we can have a better world, a better society that anyone ever dreamed of. >> are you a libertarian? >> no, i have been a libertarian in my past. but now i consider myself a classical liberal. >> classical liberal. what does that mean? >> classical liberal is someone who want a society that maximizes peace, civility, tolerance and well-being for everyone. one that opens opportunities for everyone to advance themselves. that opens it to innovations. that improves people's lives. and a society in which people succeed by helping others
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improve their lives and that's what i'm working for. >> so the l word will have people asking, is he going to vote for hillary clinton? >> well, you could ask that. >> what's the answer? >> well, my main difference with her is on the vision of what kind of society will make people's lives better. i go back to a tribute to her when she was promoting hillary care in 1993. that is that if people are left to their own devices and selecting their own health care, they won't spend enough on it for themselves and their family. therefore, the government needs to take over health care because the government will do it to better. so this is a vision in society if people are too evil or stupid
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to run their own lives but those in power are capable of running everyone else's lives because they are so much smarter. it is what i call the fatal conceive or william easterly calls the tyranny of experts. because that's what it is, it's tyranny. it has been shown in history that makes people's lives worse. because no one has enough knowledge or smart enough to run everybody else's lives. >> so this discussion will now have people thinking, aha, he likes rand paul. he las libertarian leanings. he wants government out of our lives. is rand your guy? >> no, i don't have a guy. i have these principles in what we are trying to accomplish and what i need is a candidate to change the trajectory from the
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country from all of this wasteful irresponsible spending that is heading us towards a financial cliff. not just by the democrats but by the republicans. the reason we tend to support republicans is they are taking this toward the cliff at 70 miles an hour and democrats are taking it 100 miles an hour. so i'm sad to say it is the lesser of evils. but what would be great to have is someone who would change the trajectory and move us away from this irresponsible spending that we can't afford and away from this train toward the two-tiered society. >> you've been critical of republicans and democrats alike including george w. bush on spending issues in particular. you don't have a guy yet in the 2016 election. can you say whether there is a potential person? on both sides of the aisle, do you see anyone who might potentially stand to the principles in which you believe?
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>> it is possible. the problem is, is that the practice of almost every politician, not all, only 90-something percent, there's a difference between the rhetoric and what they practice in office. and that's the problem we have with george w. bush. i mean, he is a fine person and meant well, but the irresponsible spending out of control spending, harmful regulations, getting us in counter productive wars, that's when we got involved in politics. we started this seminar network in 2003 under the bush administration to oppose those policies. >> they say you will spend $900 million on presidential race this cycle. is that true? >> no. no. not even close.
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and it's not we, it is this seminar network. and it is a projection of what the donors to this network want to give. the portion of what i give that goes to candidates is very small. so we budgeted $250 million, but not all for presidential. that goes to all of the races. whether that's senatorial, gubernatorial, state races, and so on. and just a portion of that 250 goes to the presidential. and that's strictly going to be determined by what the donors to this network want to support. >> you know the response by some is then, they are shadowy groups, they don't discloes donors to americans to prosperity and -- >> no, the pac is public. >> they accuse you of not
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disclosing and then they say, they are trying to buy the election, rig the election for the right. >> everything i give is pretty much is public. what i give -- most of what i give is to my foundations and what i give politically i give to a couple of pacs and to some individual candidates. all of that is public. now, not every donor wants to -- or is willing to get the kind of abuse and attacks that we do or death threats. so they are not willing to have their names out. and i think the other side is pushing for that because they want to intimidate people so they won't oppose it. if you look at the total effort to keep the trajectory going the way it is with more government control over people's lives, you will find it totally overwhelms this $250 million. so it's -- you had but you have
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to count what the bureaucrats and politicians have. >> you and your brother have donated at least hundreds of millions, by our records, billion, to charity. to fight cancer. help african-americans in urban centers. you name it. across the board. doesn't receive that much publicity. why? >> well, it doesn't fit their story line. and that's one reason i don't like politician. there's so much spin and the truth gets lost. that's not the world i see. as i said, a key to a free society is free speech and tolerance and all of this, these personal attacks just undermine that. so what we're -- what i'm personally working for is a much more tolerance society and this requires that government not mandate things that a lot of
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people don't agree with. it was said, for a law to be respected, it has to be respectful. people have to believe, this law makes sense and will help this improve their lives rather than hurt it. >> what about the urban centers. what about the people on food stamps and say they need the government's help, what is your solution to helping them? >> it is criminal justice reform. that's one thing we have been working on. and thankfully this administration and many democrats are working with us on that. >> is it true have you a partnership with van jones? >> van jones. >> charles koch and van jones? >> and the white house. we are working with them and we are delighted. and we are hopeful on another set of issues. that is this occupational licensing, which keeps people from, who don't have anything, from getting jobs, or the best
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starting a small business. and the white house now has said that they say this can be harmful. so we're hopeful as we ramp up on that to be able to work with them and people on both sides of the aisle. that's what we're looking for. our issues that we can get nonpartisan or across all political parties, all political persuasions to work on because everybody agrees this will help make our society better. the other thing that we're working to is to help improve the educational system so every kid has some of the advantages i have to be taught at an early age the values and skills required for success. and we need that in the educational system. so we have programs to help do that. >> now i know you go out there,
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you and your wife, liz, go out there, and you speak to a lot of the communities that need help. and have you a message to young kids. i know you say that most of them think, oh, the worst job is flipping burgers. what is your advice to those people? >> as the study shows, one of the key requirements to getting out of poverty is to get a job, any job, and keep it. there is no dead end job. if you don't get a job, you don't learn the habits and values required for success. >> you tell them, if you're going to be a burger flipper, you be the best darn burger flipper they've ever seen. and that the route forward. >> and what you find, the kids who go to work for the fast-food restaurants, if they're disciplined, they will work up to assistant manager. probably get a piece of the business. and their lives have transformed. >> so what drives the wildly
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what drives you today? i mean, you have -- you and your brother together have $100 billion. what drives you now? >> well, as i say, i believe i have a moral obligation to use whatever abilities i had to help people improve their lives. and as i said, i'd rather die for something than live for nothing. so, that gives purpose to my
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life. that's the other thing we want and try to do as employees. to have them get the fulfillment and the satisfaction from making a contribution, a real con try bugs to society and being rewarded for it. it's a win-win philosophy a. philosophy of mutual benefit. >> at 79 years old, you still work nine hours a day. you come home and have dinner with your family. >> more than that. >> you work again after dinner. >> thank you so much. >> why? why do you still work so hard? >> because i feel a passion for what we're trying to do. i mean, i mean, why does somebody who's old who's a writer keep writing? that's who they are. that's their nature. to be happy you have to fulfill your nature. that's what aristotle taught that the road to happiness suspect go to drink more or
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consume more. the road to happiness is fully develop your abilities and then apply them to do good. >> to what extent has president obama or the policies that he's enacted been an inspiration to you to keep pushing on the political and other fronts we have discussed many. >> i'm not sure what you mean by inspiration. >> you are pushing to change the society in which we live, to hold on to certain core values. do you feel we've lost those on the seven or more years? trying to get at, you want to change the society in which we live. what does the society we are in look like under this president in particular? >> well, i don't think there's a directional difference. i mean, under past administrations republican or democrat, we've been headed in this direction. it's just as i said it's difference in speed.
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and heading for what i think's a cliff and undermining the culture with this movement toward this two-tiered society, this corruption of corporate real fare, welfare for the wealthy and then obstacles to the disadvantaged to improve themselves. so it'ssame. as i said, i've been working on this over 50 years and i haven't changed my -- well, i've modified, tried to learn what works and what doesn't and so i changed in that regard. but directionally i haven't changed. i'm still working on the same things. you can say well you're doing a pretty lousy job but i like to think and in some cases we have helped improve the situation. >> we talked a little bit about your dad and his influence on you. how about your mom? mighty mary. what lessons did she leave you
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with? >> well, i think it's a tremendous lesson and i quote adam smith in the book about her which he referred to the perfection of human nature comes from restraining the selfish and indulging the beneficial affections. from restraining our selfish and indulging our beneficial affections. and that's summed up my mother. as a matter of fact, somebody ask her for help, she do anything and i think her health -- she overdid it, though. she was so worried about helping people who needed her help that i think it finally broke her health. she -- she just felt so obligated and then felt she wasn't worry. she couldn't help these people
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enough. everybody else thought she was wonderful because she could do everything. she could fish, hunt, do everything better than my father. and, of course, he loved that and everybody loved her because she had such a compassion for people so i hope i've gotten some of that from her. i'm not nearly as good a person as she was but i don't know many people who are. >> and your work ethic must clearly come from your dad because after his death, he had one final message for you. and you opened up a safe deposit box and in it you found a letter he had written to you and your brother years earlier. >> right. >> you quote the letter in your book. i have it here. december 22nd, 1937. it begins my dear boys and goes on for four paragraphs. would you mind reading some of this to us? >> sure, sure. if i can keep from tearing up.
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if you choose to let this money and what he's referring to is insurance policy. i think it was about $100,000. if you choose to let the money destroy your initiative and independence then it will be a curse to you and my action in giving it to you will have been a mistake. i shall regret very much to have you miss the glorious feeling of accomplishment. remember that often adversity is a blessing in disguise and is certainly the greatest character builder. that's tough. >> glorious feeling of accomplishment. >> yes. >> charles koch, thank you. >> thank you. appreciate it.
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charles koch? less scary? let me know what you thought. i'm me begin kelly. this is "the kelly file." e e e a great holiday and goodnight. welcome to a special hour, "an american journey." >> we're at the southern tip of manhattan on governor's island, once an outpost to protect new york city from attack. we're in the shadow of the statue of liberty and just a stone's throw from ellis island, the gateway to the american dream. this hour we're taking you on a journey that highlights america's proud past through the lens of some modern stories we reported on this year. >> our journey begins just up the
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