>> welcome to our program, night the formerer chairman of the federal reserve alan grnspan speaks out on the u.s. economic growth, on the sovereign debt of eece, on u.s. unemployment and on the debt ceingssue as well as the debt itself. >> greece, does it have the possibility of being what lehman brothers was? to 2008? >> i doubt that. i doubt that largely because the lehman brothers issue came up in a startling way. lehman brothers actually had a long period to adjust its problems. and after bear stear defaulted in march of 2008,

there was a very considerable perception that if you are's going to be bailed out as bear stearns was, that all investment banks are all financial institutions which were larger than bear stearns would be essentially bailed out. so when lehman brothers was not bailed out, the shock to the market was overwhelming. i n't think that this particular issue at this stage can be a shock. most everybody know around indeed the markets themselves, there are a lot of technical indicators like credit default swaps and the like--t's notike toe-- likely to have consequences. >> rose: we conclude this evening with a look at some of the new movies for the summer through the eyes of

"new york times", david denby "the new yorker" magazine and dana stevens of "slate" magazine. >> to me tree of life is one of those movies that is an event, a movie comes as long once every-- they have been as long 250s year gaps betwn terence movies and this movie seems like you could come out, saying i didn't get this, i didn't get that. it is a lot to take in at once. but when a movie makes you experience that kind of awe i want to tell everyone to see it. >> rose: greenspan speaks and movies you can watch this summer when we continue. funding for charlie rose was provided by the followg: but this isn't just a hollywood storyline. it's happening every day, all across america. every time a storefront opens.

or the mnight oil is burned. or when someone chases a dream, not jt a dollar. they are small business owners. so if you wanna root for a real hero, support small business. shop small. additional funding provided by these funders: captioning sponsored by rose communications from our studios in new york city, this is charlie rose. >> rose: alan greenspan was chairman of the federal reserve board from 8 '78 202006. the decisions made him one of the most influential bankers in american history. the united states experience aid period of growth under his watch.

at 85 years old he remains engaged in the conversation about global economics. his skuk seser at the fed ben bernanke has fac a range of challenges at the growth othe the u.s. economy ha slowed. i spoke with alan greenspan yesterday at the harvard club in new york city as part of a seri of conversations in collabation underwritten the royal bank of canada. here is that conversation. >> let me begin with the question of whether greece will have to default on its sovereign bt and what are the ramifications if it does. >> the chances of greece not defaulting are very small. >> you mean by that-- fame, portugal, ireland. >> the problem that you have is that it's extremely unlikely that the political system will work in such a manner as to create the type of finances which will solve

this problem. what you are having to do is get a fiscal consolidation, meaning that all of the affairs and that relate to budgets are governed by some central council which everyone adheres to. once you do that, you're very close to political integration. and i think the possibilities of that are virtually nil. so at some point the arithmetic is such that the probabilities are such that there is default out there probably sooner rather tn later. there's going to be a vote of confidence on pap andre u in a matter -- pap and drew in a matter of days. if that fails i think we have consequences immediately occurring and it is very hard to see the prevention of the so-called contagion that will go on.

right now greece has got interest rates on its two year notes of over 30%. that's almost the equivalent of the market saying the chances of this country making it approach 0. so i think that we have to be prepared for that to occur and we have to be prepared to take the consequences and adjust to it. the reason why that is so important to the united states is that sovereign debt of these peripheral countries is held very heavily by the european banks. and to the extent that greece defaults and spills over into the other peripheral countries, then you've got a situation in which banks will be up against the wall and since the global financial system is so integrated, that a

good-- united states has very few liabilities against greece. it's got huge liabilities against europe. i don't think default is certain. i think it's close to certain. there are still avenues which can block it off. >> rose: and what are those avenues? >> well, the avenues are basicay some form of scal consolidation of 17 countries. i find the political chances of that occurring are almost too small. >> rose: and that's the only avenue is the consolidate on the part of -- >> short of that, we've tried all sorts of things which would require that greece essentially put its house in order. there is a very large loan a year ago. there's another large loan recently.

the difficulty is that the fiscal policies of greece are such as they are dramatically different from thosof the other members of the euroone. and unless they actually comeo grips with the issue, those are the only alternatives. >> but is greece, do i have the possibility of being what lehman brothers was to 2008? >> i doubt that. i doubt that largely because the lehmanthers issue came up in a startling way. that is, after, lehman brothers actually had a long period to adjustts problems. and after bear stearns defaulted in march of 2008,

there was a very considerable perception that if you are'soing to be bailed out as bear stearns was, that all investment banks or all financial institutions which mr. larger than bear stearns would be eentially bailed out. so when lehman brothers was not bailed out, the shock to the market was overwhelming. i don't think that this particular issue at this stage can be a shock. most everybody i know and indeed the markets themselves, there are a lot of technical indicators like credit default swaps and the like, which are -- it's not likely to have consequences that lehman brothers did.

>> rose: bringing the questions back home, what's wrong with t american economicecovery? >> it's very simple. if you want to look at wre the numrs are this economy is n growi very fast. it's very sluggish. i know we're going to move into a double dip so, to speak but we're growing at a-- rate t is very simple. construction which has been every other recovery since 1949 has been extraordinary, positive and very supportive of the economy, has barely moved recently. the consequence-- . >> rose: because there's no new housing or commercial construction? >> no, basically because if you dig down into the numbers and try to look at what's causing it, there is an extraordinary degree of apprehension about the longer term. if you are's going to have a long-term investment, and it's not just building, the

problem is that all long-term assets because the longer out you iest in illiquid assets, the more uncertain you tend t be. and if the environment of your economy is highly unstable and we are having so many different things going on, especially activismhat is involved in trying to stimulate the economy with so many different things, that people are not sure what to make of the longer term, and that means that they are very reluctant. another way of looking at this is the fact thathen people are uncertain and disengaged and when corporate matters-- at a long-term project which it knows it's going to take its liquid cash flow and choose to put them into illiquid

long-term investments, it's got to be pretty sure it knows what the rate of return over the full life of that asset is going to be. >> are you uncertain because you don't know whether this government is functional enough to deal with the debt, is functional enough to deal with the debt ceiling, is functional enough to be able to have a strategy and a plan like bowles simpson to deal with long-range structural issueses? >> yes, definitely, that is a major part of it. the other part is based on thepresumption th the other thing government can do is to take activism or active actions to solve problems. butthe data show is that a significant proportion of those stimuluses, those stimuli as a consequence create degrees of uncertainty which vy much possibly even oset the positiveffects that occurs

as a consequence of the stimulus programs. i think for example the 787 billion stimulus program that was initiated in the early weeks, 2009, now we have most of it complete and it hasn't of had much of an effect and the reason is that you can demonstrate from the data that the negatives that are created as a consequence of this very extraordinary uncertainty creating event largely is offsetting. and the consequence of that is that you get a major set of endeavors on the part of government which presume that the actions would lower the unemployment rate. had it been successful and the construction had gone up, we would be at 6% unemployment rate,ot at 9. and soou have to answer the question why is it with

cash from clunkers, first home buyer credits, all sorts of deviation of mortgages, why hasn't that now after several years shown almost no results. >> rose: what's the most important thing that you have learned about markets in the last four years? >> they work. >>ose: they work. >> thedo. in the sense tha when you have balans people withdraw and the markets collapse. i shouldn't say i have learned that in the last four years. >> but i thought-- my impression was that you had realized that markets weren't perfect. >> oh, no, that's a different issue. one of the things that i had essentially been almost taken as a given was that

corporate executives specifically bank executives knew enough about their organizations and cared enough >> rose: to act rationally. >> to act in the support of the solvency of their institutions. and i was wrong. i mean they did not. and indeed, i was-- . >> rose: here is what i hear you saying. and you've written this as well. the thing that you can never quite calibrate is the human emotional aspectof markets. >> i'm glad you raised that issue, charlie. because i am just starting to write a book. it's called the-- metrics of human nature and what i am tryingo do is precisely what you are suggesting can't be done s to put numbers on-- . >>ose: so you can put numbers on -- >> i don't know that yet. i know i can do it ia numb of instaes. but whher i can do it in enough instances which actually effectively make us capable of forecasting, i do

not know. and when i finishethe ok i will know. >> rose: there is nothing that happened in the last four years in 207 to 208 to 209. that caused you to question any of the fundamentals that you believed about economics, markets, supply, demand. >> the thing that i believe which is very important and actually as i mentioned before, failed is not-- . >> rose: . >> it is not a minor question. but have markets done things differently from what i observed over a half century? not really. and the reason is that human beings always resnd in the same way. they are risk averse. >> rose: right. >> they tend to have a herd instinct the are various different issues which we confront, not realizing it but we havwhat is called

time preferencwhich means people discount futur events. there's nobody i know who would pay for theight to consume something or an asset, to gain an asset five years from now. more than getting tod. and that is auman trait that goes all the way back and has huge implicationses about how markets work. so i think that what, if you want to say what have i learned in the last few years, i would say technically, how it actually important as a driving force, in economic events. >> in economic events. >> but it doesn't have to be rational it has to be systemic. >> you, i suspect that if i were to ask the question in this audience or any other audience, who was most preoccupied with interest rates and inflation in the

economic arena? you would win hands down, not because of your stewardship. do you worry about inflation in today's economic circumstances? >> very much, yes. history tells us that when you go through a perd such as this with huge amounts of liquidity in the system, which at the moment is not being used atll, that eventually it takes hold and begins to move in the price level. i dot know a single economist, or certainly any member in government whom i know that deals in this area who isn't worried about that issue. >> rose: the possibility of inflation. >> yes. >> rose: and it comes from food and fuel and other commodities? >> no, it comes from basically the issue of very large amounts of liquidity

to the system. >> right. what we know is-- milton friedman a very famous economist. >> rose: nobel laureate. >> and good friend, at inflation is always the result of a monetary cause, that is prices are defined in terms of the ratio of a good to the amount of money. and you have an excessive amount of ney, eventually it will cause the price of a particular good to go up. and that's always been the case. it's just the question of the timing isften very delayed. >> rose: the debt ceiling. how do you few the debate that's going on in waington between republicans and the administration? >> well, first of all, charlie, i think the concept of the debt ceiling makes no

sense to me whatsoever. because we have in place appropriations which are passed by both houses, signed by the president, a tax code which has theame characteristics. and unless you are peculiarly inincapable of arithmetic, you can tell what the increase in the debt has to be. so on the one hand, past legislation on expenditures and taxes and then superimposed on i,nother piece of legislation which stipulates that irrespective of what you've done in the first two, you can't borrow money, you cannot spend more than the revenues that come in, it strikes me as you've got contradictory legislation. >> rose: ben bernanke said in the last week that that

using spending as some tool to influence spending cuts is really the wrong way to go. and he said, that if in fact they failed to do, and august 2nd has become the op rattive day from the secretary of the treasury, if they fail to do something about that it will affect our credit rating, it will affect what happens to the doll it will affect a wholrange of nsequences if they don't do something about it. are you saying no? >> what he said ishat government will default on obligations, not-- anything which is passed by both houses and signed by the president is a legal obligation of the united states government. >> rose: right. >> what will happen is that the moment we hit the debt ceiling effectively. >> rose: which is december 2nd, according to secretary geithner. >> it could be a few days on either side. the issue here is that at that point the ability to

spend goes from a hundred cents on the dollar to 60 cents on the dlar because you can only spend the revenues. because if cannot borrow which is another way of saying the debt is, as a ceiling, you cannot borrow t leaves means that you must cut back overnight. it's not like a continuing resolution which the congress which sort of spreads it out a little bit. this is a sharp discontinuity. and i think what ben bernanke was worried about are the consequences to the overallconomy and the reputation of the united states on overall obligations, not specifically on the debt and debt rating of the country itself. >> rose: but there is a confidence element in this, is it not? >> in what sense. >> in the concept that the united states, a confidence in the united states to deal with its financial issues. >> absolutely. there's no doub that there

are huge consequences if we fail to do this. i'm not recommending dow it, believe me. >> rose: what would you y to the republicans who are arguing that unless mr. president you're prepared to make these, make these spending cuts we will not vote to extend or raise the debt ceiling. what would you say to them, republicans? >> well, i do say to them. i talk to them all the time. >> rose: and what do you say to them. >> the point being tt there are two sides to this question. we have outstanding a debt problem which is getting horrendously dgerous. and the problem is that if we don't bring it-- ifwe don't stop the erosion fairly quickly, i'm not saying we're going to become greece, but the greek analogy is basically there. the reason i raise this issue is that we don't we are assuming and we have a

year or two to solve this debt problem. i hope we do. i doubt it. >> rose: how long do we have? >> the problem is i don't know and i don't want to risk it. because if we assume that we have me, and we are wrong, that could be very dangerous because thearkets, the bond market specifically will react extraordinarily-- . >> rose: and what would be your worst-case scenario. >> pretty bad, the worst-case scenario is the fact that you have a bond market crisis. and the bond market crisis will force the resolution of the debt problem in ways which are not optimum for the united states. >> rose: when you have these conversations with these republican leaders, do you tell them that you think that the tax rate for the united states ought to be at clinton level? >> i tell people what i think is going to happen. what i think is going to happen is essentially we going to end up finally coming together at a point

which is the result of a simpson bowles commission set of data plus what's missing in simpson boes which is an medicare appendix. that plus going back to the clinton taxut, to solve the problem. i'm reasonably well certain at some point because everybody kno what ben bernanke was sayin the other day, namely that the effects not so much of the interest rate issue or the continuing the debt servicing of the united states, but having huge obligations which contractual by nature, which we are effectively defaulting on. and that is not good for the united states. nobody wants to do that. and the question is what do they do when they finally

decide well we're not going to do it and i'm saying as i read it, both sides are as far apart as you can get. >> rose: my impression is that they had not extended the bush tax cuts for those over $250,000 it would have-- the tax rate effective tax rate would have simply been what it was at president clinton era levels. >> that's correct. >> rose: okay so you think generally the country has been served well by people that, i mean by now person bernanke, tim quitener quitener,-- geithner, pank paulson, bernanke, summers. >> oh, absolute. >> rose: in other rds,. >> if we did not have-- . >> rose: those people making the decisions they did, we would be in a worse pce. >> absolutely. >> rose: okay. >> i mean i've worked with all of them. i have known geithner for years. ben bernanke was a governor when i was on. hank paulson i've knownor years in the private sector. had we not had those people,

it would have been very significantly worse. they were confronting problems that no one had to deal with. i mean i would sit there and say i know what they're going through. because i have been in similar circumstances. but the order of magnitude was a small fraction of the types of problems they had to make decisions on, on very little knowledge. >> rose: do you think any of the decisions you made as chairman of the federal reserve contributed to the crisis that we -- >> the '08 crisis? the answer is no. and i wrote a long part of a paper for the brookings institution. >> rose: right. >> which i, if anybody wants to take e paper and tell me where i am wrong, i will-- . >> rose: in other words, you can't point to a single thing and say i would have made a different decision because i made that decision, it contributed to the crisis that we had to go through. is there anything left in monery policy to do? >> at the moment? >> rose: yes.

>> no. >> rose: nothing. >> nope. >> rose: do you believe that q e3 would be a positive contribution? >> qe 1 was just a response of the 2 008 cris. it was the right direction none of the reserves which were created in qe 1, and certainly none of th reserves in qe 2 have been actually employed in the economy. what has happened, essentially, is that we have had a trillion and a half increase in the asset level of the federal reserve system, a trillion and a half increase in excess reserves, and a trillion and a half increase in the deposits, that is the excess reserves which commercial banks hold at the federal reserve banks. those are very big numbers but the usual thing that happens in an economy is that the deposits which the commercial banks have start

to be relent. and it is that which what economists call the money multipli which engenders economic activity. to this day none of it, none of the 1.5 trillion has been effectively moved out of the simple positionof immobility. and the reason basically is the banks have no ide wha thr tax rateses are gng to be or what their cital requirements are going to be. and that is frozen lending. >> the only thing you can suggest that migh be the most helpful thing would be somehow for corporate america, small and large, to have more confidence and ss uncertainty about the future. that would contribute more to econoc growth than anything you can imagine. >> absolutely. rose: and what can the president of the united states do.

>> sometimes the optimum policy is do nothing. let the system heal. the system has been very severely battered. we have something positive going for us which if we allowed it to funcon would really make a difference. and that, people remember, the peop in the audience will recognize is the fact that we have what is called a very large equity premium in the market. meaning it's the yield on stocks relative to riskless instruments. and that usually is a measure of how disinclined people are to buy stocks. and that number was at the highest level in 50 years a year or so ago. >> rose: the disinclination to buy stocks. >> disinclination to buy stocks. at the same time we're having this extraordinary

rise that is occurring in earnings per share coming almostholly, at least in the beginni, from productivity improvements within companies with efficiencies not only in labor productivity but in energy productivity, materials pductivity, and when you have a significant rise in earnings coming up against a high equity premium, the only thing that can happen is for stock prices to rise and that's basically why they've moved up as strongly as they have. and they have created a very significant amou of stimulus because what people i think really have to understand is that capital gains are not just paper profits. they basically effect the balance sheets of financial institutions and corporates and when you increase the equity of e balanceheet of a bank it tends to ld more.

most of the talk, i think everybody understands what tarp is by now. >> rose: indeed. you very much agreed with the tarp program. >> i did indeed and i think it was essential at the time and it was an action, give wren we were, it was the right thing to do. and tnk mad an very important-- . >> rose: and we'll get most of the money back. >> the reason we're going to get the money back is largely because the stock market went up. and those individual banks were able tofloat stock or borrow money or do a number of other things which they would not have been able to do if stock prices had stayed down where they are. >> rose: did you support what happened with general motors and with chrysler on the partf the federal government? >> i did not. >> did you not? >> no, there's a history to this. when chrysler first wa bailed outany, many years ago, i testified against it at the time. and i said my concern is not so much that it ll fail but that it will succeed. and cause a precedent.

as difficult it is to recognize what might happen if-- remember, if general motors and chrysler had failed, they don't go out of business. they just default on their debt and restructure and reorganize which is actually what they did. it wasn't necessary for the government. >> they got an influentia influential-- infusion of cash. >> well, but the courts handled that. i means that's what a bankruptcy is all about. so i would say to you, that had we not done that, we would be very much where we are today. >> rose: the federal resve which you headed, what options do they have? what might ce out of this meeting next week when they come together? within if i knew, i couldn't tell you. but i don't-- ireal don't kn. >>ose: but has anything signifant come out of is. >> i would be very surprised. >> rose: i would do. that was my point. >> are you concerned about a double dipecession? >> not really.

i grant you that ife are to get one, it's going to come from the greek default. >> that's why i brought it up first. >> if you leave greece aside, i would say the probability is quite low. another way of looking at it is to recognize that the weakness in the economy now is essentially construction. it can't go any lower. you cannot get housing starts below where they are now, nor capital investment or business commercial construction much lower than it is. so that thats giving you a low base. there is no momentum i the system that suggests to me that we're about to go into a double dip. >> is one of the things that we have failedand mean by that, economic leadership of the country in terms of creating policies that would have done somethin a to deal witthe housing stock that was outhere, and b, doing something about the

idea of getting construction, creating a way that the housing market would not be where it is? >> were there policies that could have leato a better result? >> well, first let's understand what the problem was. througho the period in 2001 through 2004, 2005, therwas a more than a million new single family ownerccupied dwelling units. that when you adjust for demolitions and mergers and the like, comes out effectively to about a million and a half construction units. and that continued because of the fact that the rate of home ownership was rising very rapidly. and that was something which i approved of because i

thought that a goodly part of that were minorities. and my view is that to get lower income groups and minorities as having capital is a very important thing for -- >> but that's what happened. that is the problem, isn't it? >> well, that's what happened. the problem essentially was that we ran out of the run-up in th proportion of owner occupied households. and when it turned,hen people, whe the 6 to 800 900,000 a year increase in households went predominantly to rentals, rather than to ownership, it collapsed. and to this day, we still are getting a decline in the share of households which arewner occupied. and unle and until that turns around, there is no policy which is going to generate a significant

increase in housing. if it's not-- doesn't have to turn around it merely has to stop going down. and there is half a million housing, single-family housing starts a year. will move up quite sharply. >> we haven't talked about dodd frank. we have great apprehensions about dodd frank. >> i do. if you look at the structure of the various diffent, not regulations because remember dodd frank is essentiallan enabling act which has a whole series of positions that they would like to occur and they are requesting of the regulatory agencies to make rulemakings which will implement. >> that is what they are doing. >> that what they are doing now. implicitn that is a coon seembeall framework of the way financial markets behave. in other words, a specific action a cses consequence

b. if you are wrong on that, then your regulation will be adverse. and what concerns me is that the underlying conceptual structure of whatodd fra is built upon guess not-- does not conform to the reality i know so that the 200 or so that the federal reserve will have to make and the office 69 controller and f.d.i.c., those rulemakings are having great difficulty being constructed because as you look into trying to make a particular general idea into a rule, as you deal with that sort of stuff, you have, say if i do this, this will happen, that will happen, what will ido. and that's what is creing. that is the reason this whole thing has been delayed.

they are supposed to have all those rulemakings a month from now. that won't happen. >> okay. president of the united states calls you up and he may already have, as far as i know. he calls you and he says mr. chairman, he wants to be deferential in this call. mr. chairman, i want to be re-elected president of the united states in 2012. i don'know who my republan opposition is but i know the issue is goi to be the economy what would you tell him, mr. president, i'm so flattered you ask me. here is what i want to say. and if you do this, i think your chances of having a different unemployment picture by november 2012 are very good, what would you tell him? >> i would remove the particular barriers that create uncertainty. >> back to where we -- >> of these people, i want to you tell me who is the smartest who is the most

machiavellian and, and who was the wisest. nixon, ford, carter, reagan, bush, clinton, bush, obama. smartest. >> it is a tie between clinton and nixon. >> rose: rlly? >> yes. bo had-- both had and have very high iqs. >> rose: who was the most machiavellian. >> nixon. >> rose: and who was the most-- the wisest. >> gerald r. ford. >> rose: thank you very much for being here. d i thank you, dr. alan greenspan. (applause) >> thank you. >> rose: the summer movie season sun w. there is something in it for everyone. eatres wilbe filled wit superheroes, outrageous come december and intro speckive dramas. sequellses are a big theme this sumner both action and animation.

re is a look. >> listen me very carefully, my friend. killing wi not bring you peace. >> peace was never an option . hans everyone see that because i will not be doing it again.

within guide us to the end of time. is. he gets ideas. >> why are you so dressed up. >> i was just doing a little writing. >> you dress up and put on cologne to write. >> you know how i think better in the 140 we are and i get the positive ions going in there? >> i had private detective follow him. >> what happened? >> i don't know. the detective agency says the detective is missing. >> anything is possible. >> i'm freaking in.

within beware of the sign. >> what sign. we have 20 fine this thing. >> what's so good about this. >> go. >> i s it. no one believed me. >> i believe y. what the hell ?

>> no. >> oh this is some class classy-- wfern jeez, megan. >> join me to talk about this summer at the movies, a o scott, david denby an dana stevens. i'm pleased to have each of them here. let's start with woody allen. >> okay. good place to start. >> we will talk about what won in a moment. >> i think this is, you know this is very slight movie in some ways. it reminded me of some of his sketches that he wrote and collected bk in the '70s and '80s, stuff where the guy goes and brings madam above ary into manhattan this is, has a very charming premise where owen wson playing the woody allen surrote character as this frustrated, he is a skrin writer, a hack screenwriter. he wantses to be a novellist. he is in p business his

kind of pruddish, materialistic fiancee played by rachel mcadams and this magical thing happens which i think is very nicely never explained like in purple rose of cairo. how did the guy get off the screen, you don't know. a car pulls up, an old-fashioned roadster and inside are helda and f scott fitzgerald. and he does this time travel, by day in paris he's in modern day paris kind of moping around and going to tourist sites with his future inlaws. and his unbearably pretentious friend played by michael shine. and then after midnight, he's whisked off into the paris of ger trude stein and hemingway. every scene has this silly gag where he will walk up and oh pie goodness, louis-- oh pie goodness salvador dali. and it has a charming idea about nostalgia and the sense of living, you know, far beyond the golden age and of wanting to get back inime. i found it one of the more

enchanting woody allen movies in a while, yeah. >> the idea explicit idea is that finally to be an artist you have to engage inhe present. but you can see h much woody has pulled into the past. and it's woody the eternal student, you know, the celebrater of the canon. i join him in that. you know, of western writers and jazz musicians and everhing. and hemingway is hemingwayesque and ger trude stein, they are almost like cliches of themselves, it i a they very thin con seat as tony says. but the thinness of it is sort of the charm. it is sort of like what your dream would be like of havi a drink with hemingway, he is unshaven, course. >>rilliant. >> he spokes in hemingwayesq proceeds and talks about pride and suffering and grace under pressure. and ger trude stein is blunt and yet helpful at the same time. so people have said oh it's just a cartoon of all these people. i think that's the point.

i mean it's the heroes managing what these people are like if he could have them to himself for a party evening. >> that's a chming idea. >> rose: and owen wilson. >> owen wilson is a wonderful proxy for woody allen, sort of makes the movie it is a wisp of a movie, it is really quite insubstantial and when you compare it to the purple rose of cairo a similarly themed early woody allen movie, what does that say about where he is and where he going. >> with late woody allen are you grading on a curve and there are moments i get disgusted and that i'm to the seeing any more of his movies but something comes that wins you. >> i think you are right. e of the little ironies of this movie is that by now woody allen himself is an object of those tall gaj for many of us. >> tree of life. >> i'm curious what david has to say about tree of life to. me t is one of those movies that is an event, it comes along once every, maybe as long as 20 years gap between tence malick

movies and ts feels like something you could come out saying well i didn't get this i didn't get that. it is a lot to take in at on. but when a movie makes you experience that kind of awe i want to tell everyone to see it and i am telling earn to seet. >> and you. >> i think it is an insufferab masterpiece. and by that i mean the first half hour-- . >> rose: you are supposed to like it but don't. >> i was ready to slit my throat the first half hour. there are exploding nova or nebula and fish and flowers, all of existence and i was saying if a movie is about everything, it is not about anything in particular. right. but then it turns out it is. it is about a family in texas, waco, texas, in the 1950s. a very specific time and placement and very moving family portrait. and the idea is, i know is going to sound a little nuts s that all of existence can beencapsulated in one family drama. it's like all of existence producing this pases, friend, future, the end of life, the ginning of life, it's all

there and what he has done is to some degree reinvent lm language. because the camera is never on the tripod. it keeps moving around these family people, it's behind them, around them, he has reinvented the frame also it is not the ualkind of settups. and you feel like are you floating through this family there are no sequences, right, in the normal sense of the world >> or dialogue really. >> very little dialogue t is all fragments so you feel like the film is being reborn and at other times it is exhaustingly aesthetic. and you want to like puke. so i don't know how-- . >> rose: and the casting is sean penn. >> sean penn,-- plays the surviving brother. brad pitt and i have torn up brad pitt on this show in the past and i think he's terrific as a -- >> and jessica chastaine are the parents and the young acrs who play the sons in particular, the older son who grows up into sean penn, are extraordinary. and i think what david said is really right about the

reinvention of film language. because also what you think of as acting, as the kind of you know expressive tech neebs of acting, will say something to you and express an emotion and will you say something to me and the camera will cut between us, there's none of that. and brad pitt's performance is in his face and his eyes and his posture, and he conveys the complexity of this man, who in some ways is a monsterously author tearian father, also a very loving father, a very proud man, a very insecure man. and the camera circles around him and kind goes inside his sense of himself. and also in i way that you rarely see in movies, goes inside of consciousness of the child, of the son. i don't think i have ever seen a movie that so delicately and precisely conveyed the changing perception of childhood. so you are actually watching over a span of years, that is the span of about an hour and 15 minutes, a kid grow up and come into awareness of the worl and people around him right before your

eyes it is done with music and with this editing sche where just the images flow into one another. >> rose: let's talk about super8. >> it's 1979, the middle of ohio in a small town. and there are a bunch of kidses who are making a zombie movie. a bunch of gung ho movie kids like spielberg or jj abrams who produced it when they were kids, they worked with super8. this is the beginning of art and the beginning of commercial cinema. and while they are totally obsessed, you know, at secretly making this film, all sorts of uncanny things are happening in the tourn around them. so they are making a film about the uncanny and there is monster loose. and there are strange magnetic things flying flew the air and everything. and some of it there is a spectacular train wreck which apparently was, came out of cecil b demill's magnificent circus movie from the early 50s that turned spielberg on, the greatest show on earth. remember the train wreck, yes.

so there is a train wreck and the kids photographed. and e whole secret to the movie it in their super8 camera lying on its side and captures the train wreck. so that, i think conception of the big miracles happenin and little miracles of film making is terrific. it runs out of gas at the end but it's definitely one of the movie -- >> anything you liked >> tree ofife we just talked about. kind of in the middle of the summer blockbuster comic book phase, i can't really say that i have been overwhelmed with stuff i like this summer. >> i would say bridesmaid. >> yeah. >> bridesmaids which is kind of a surprise. it is not, you know, a great movie. it's, but it's 24 the vein of the kind of raunchy r rated comedy, it breaks some interesting new ground as well as being quite funny. and it does what seems like a kind of simple thing of just taking theon seat of something like hang over,

hangover 2 and just making it but this time with women. but it's a lot, you know, there's a lot more to it than that. and i think it was a really interesting movie about female friendship and about kind of jealousy an rilry. >> pirates of the caribbean. >> it's a total mess. johnny depp keeps trying to argue his way not movie and y hey this is supposed t shall about me. and the plot doesn't make any sense and as a result they keep inflating into each other and still doesn't make any sense. >> you said expressed some hope that we are seeing the ends of the sort of, wt. >> well, of, ido feel like the kind of comic book derived superhero movie which has been kind of a dominant genre for ten years. i me i think nce the first spiderman i think ally relaunched it. i mean that wasn't the beginning of it. but in -- >> superman. >> in our era, there has been that and the ironman movie and x men movies and now there is thor which is heading toward some big

reunion of all the different superhero movies. and you can get into a lot of trouble as a crit kick if you knock these movies because there is a rabid fan base there. >> the studios have 2 or 3 billion invested in these kind of movies they are talking about. there are 25 coming out this summer. >> what about 3-d, has it established itself or is it simply avatar came and left. >> i don't think it's been necessary to anything except avatar. and maybe werner hertzogue caveovie, but aren't directors like better luckee and so on are now turning to 3-d because ey see possibilities. >> better tools to work with. >> to ends their careers. >> scorsesis do something in london. >> i don't think you can defend 3-d as a form. if interesting things aren't being done it is because interest movies aren'teing made there are a few artists who e trying to push the frm d explore what it is. rose: the is also this,

technology as it comes rang down the track may offer the first run movies like in the first month. you can see them at home. how is this going to change the movie business. >> if you create a viewing experience that will make it attractive for people to leave the house and go see a movie, they still want to do that. >> i agree. i mean say to me tree of life should be seen in theatre. no matter whether you have access to this any or way, see it in a theatre. >> same with cave of forgotten dreams. >>it is a relinl us experience. and i'm not a religious man. but you go, you sit in a dark room with strangers. >> you are spiritual about movies. >> you are sitting in a dark room with strangers and there is a kind of unanimous breathinand laughing and talking about and so on. >> rose: thank you for coming. great to see you. happy summer. >> thank you. >> thank you very much .

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