>> rose: welcome to the program. tonight, bill gates. >> the mind set in ancient days was about decay, the garden of eden, everything was perfect and pristine. and they saw that thing were falling apart. the idea of new knowledge, new invention just was formed. the medical knowledge came from thousands years before. but then when they started in painting and logic and medicine to find out those old things they hadn't come up with these techniques. they were wrong about anatomy and they had to map things out. there was a sense of we can discover new things, that man kind's curiosity, that we can build a better world. >> rose: bill gates for the hour, next.

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from our studios in new york city, this is charlie rose. >> we can't think of these as one block of developing countries because now china, mexico, so many are up here. and of course the developed countries are doing even better. but huge progress on health and income and age has been a big part of it. so it's a myth that we haven't made progress and that aid hasn't helped. >> rose: bill gates is here. he did three great things in his life, he founded a great technology company, he married a great woman and together they built a great foundation that ought to be enough for one lifetime but he in melinda through the bill and melinda gates foundation do something remarkable. they save lives, their goal is to dramatically reduce the number of children in the world who die before they're five years old. yet he's worried because he

fears myths about the poor and foreign aid and overpopulation might impede progress. this is in fact the subject of his 2014 annual letter which has been released today. i'm pleased to have bill gates back on this program. welcome. >> great to be here. >> rose: let's talk about this and you've said some remarkable things in this letter which is almost like a conversation from you to the people that you want to reach. you say by almost any measure, the world is better than it has ever been. people live longer, healthier and also nations are now more self sufficient. talk about where you think we are and then where we're not. and then get to the myths. >> well several hundred years ago, everybody was poor. about 30% of kids died before their fifth birthday. and then a miracle happened in a small part of the world. europe eventually the united states, after the war japan,

came into that as well. we have this rich world but most of the world was poor. in fact when i grew up we sort of thought of the west, the soviet block and then this third world, these poor countries where i didn't know much about what happened there. i knew i was supposed to finish my food because otherwise it would be some kid in china didn't have enough food. something like that. and so if you looked at income, it was bimodal, the rich and then these poor countries. but over the last 60 years, those countries by and large, not all of them, but most of them have moved up. and so most people live in middle income countries, brazil, mexico, thailand, malaysia. and countries in that can the -- country no longer receive aid. they get aid but they still have poor people in their country. they use their own taxation and resources. they get new technologies from the rest of the world but we can

focus our aid on the remaining poor countries. and my view is we're very close to finish this job of getting every country up to that level. in 20 years i think it will be less than 10. so the world is wonderful. >> rose: it's been ten. >> ten countries that will be in that category. there will be ones where something really, you know, top conditions. land locked africa, north korea. and i'm amazed at how this good news about the progress in the world, health, longevity, every aspect, really runs against common wisdom, and it really holds people back. it gives them kind of a negative view of all these investments we've made and the progress going on. and so i think that's debilitating. and people have a hard time explaining why melinda and i are spending money the way we are

when they see that, they think poor countries are just destined and we haven't made much progress. >> rose: but you worry because people don't believe that there has been change and that there can be even more remarkable change. where does that, are that resistance come from? why are there these myths about the poor will always be poor, about foreign aid and about the fact that if we do a lot of these things with development will come overpopulation. where is the myth coming from. >> well i believe these myths before i got involved in this work. >> rose: you believed them. >> yes. i think when somebody wants to appeal to you to help out the poor, they show you the worst conditions. when somebody wants to be cynical about poor countries, they show you the top conditions. and so whose job is it who say things have improved.

it's not a headline piece of news. bad things are headlines. tornados, earthquakes. but the fact you have this gradual day by day decrease in deaths, increase in literacy, increase in longevity, increase in gdp. there's no moment where there's all of a sudden some big announcement. and that's why i took a contrast of going to mexico city in 1987 and going wow, this is a poor country. people are spending a lot of time just carrying jugs of water around. a recent visit where sure there's poor people but it's mostly middle income, middle class. and that's why they are now a lot of work to do but they're taking care of themselves, improving education, improving taxation. and so it creeps up on you. and unless you work in the field, you're just seeing those headlines and kind of this bad news that may make you think gosh, we haven't made this

progress. >> rose: and if in fact people believe that progress is being made and can be made they're more willing to support. >> oh, absolutely. what they do is look at okay what happened in mexico happened vietnam. how do you get education right, how do you get infrastructure. how do you get farmers to have triple the productive so for kids to have enough nutrition. they make sure the expertise and resources get there. so all these countries get out of this poverty trap, this income level where you can't afford the schools, the health. your kids have such bad nutrition that even if you are able to educate them, they're not going to learn and contribute. and so until people come along, you're going to stay there. and without that knowledge it almost feels like tenants rather than a hand up. >> rose: there's also this. this notion as you point out, there are one billion people still on the planet that are in extreme poverty.

one billion out of seven billion. >> exactly. and you point out that your concern is primarily with the bottom two billion people. that's where you want to focus your attention. >> right. >> rose: yet at the same time as i suggested this morning, we have and i just want you to connect the two, this report that came out today. everybody's talking about income inequity. the pope's talking about it, the president's talking about it. it's the thing -- there's going to be a subject of income and equality. so this comes out and says 75% or 85, the rich est people have enough money as the bottom 50% of the global population. connect those to some people here that say that's the extreme example of income inequality in the world. >> well if those numbers which i'm sure there's some construct that they feel that's correct. if that makes you think the poor

aren't improving their livelihoods, then that is just another example of misleading people. what really counts, your children survive, you have enough nutrition. you live a long life, you're literate, you have economic freedom. eventually you can have a refrigerator, a tv, a mobile phone. and so amongst those 85, i'm sure they count me maybe as number one. but my money is here for the poorest that's going to buy vaccines. say that you've just gone to medical school and you're $100,000 in debt. okay. you look like somebody with a net worth of negative $100,000. well the fact you're about to become a doctor. if you look at your consumption, you're not starving. the number of people starving on the planet is way less than at any time in history. and so it's the kind of

statistic that might make you think hey redistribution. growing the health of the world is not the answer. just purely redistribution, that's what this is all about. and yes, different countries can have taxation policies. we are on the side of taxing the rich a little bit more in this country would not be that harmful. but that's not what's going to get the world, that's not the primary thing that will move the world forward. better education. if i had one wand, take away all that wealth and give it to poor or improve the education system. the education would be a hundred times more powerful because then you're developing people's capabilities. and then they pit professions and do things. so you know, i'm not disagreeing with the figure but it does not lead people to see what's gone well and encourage them to do more of it.

>> rose: well the point you also make is that if you look at all these countries where there's been an emerging middle classes, what emergence into the middle class means is you get a better education. you have better health and therefore you're able to do more in terms of contributing to an economy that will let more people into the middle class. >> right. >> rose: let's talk about foreign aid as a myth too because there are many people that believe foreign aid doesn't work. people believe there's corruption and people who believe there's a better way to do it. you say? >> foreign aid is, has a significant responsibility for improving health, improving agriculture. and those are antecedents. those are necessary elements for a country to advance its economy. what we've done with vaccines, reducing measles, deaths, getting polio near eradication. that's why kids can develop physically and mentally and have countries that go on to look

like we want. like these middle income countries. so attacking foreign aid in the past when it was cold war payments, where people aren't good at measuring these things, yes. i won't stick up for all the aid dollars that have been spent. but melinda and i had total freedom of how we'd spend our money. so the idea with our analytic ability, we happen to be suckered into some indebted program, i'm saying i don't think so. and here's why. >> rose: you also point out that the budget for foreign aid is remarkably a small percentage of the budget in most countries. norway having the largest aid budget is only 3%. >> that's right. they're exemplary. they as a percentage of the economy are budget they do the most. we're a little bit less than 1%. amazingly when you get pushed back on foreign aid it's because people think amazingly it's 10 or 20%. if we were sending that much

overseas even i would say wow yes it's more effective but then again we've got a lot of problems. the balance that, i wish it was 2%, i have to say. >> rose: you think a good number would be 2% for america. >> 2% for america would be fantastic. >> rose: 41% is health related. >> yes. the u.s. has a very high percentage. it's increased a lot, just over a third. >> rose: to talk to you over the experience you've had and the places you've been from india to africa to a lot of places in which you've seen things first hand, it becomes more than numbers. it becomes more than 5%. it becomes a dollar makes a difference in a life. all lives have equal value which has been the mantra of the foundation. >> yes. if you go and actually meet a mother whose child is dying and you realize, you know, a vaccine that could have been given to

that child would have saved their life or some malaria drugs or a bed net. you can't have that experience and not really get dedicated to this cause. melinda's in tanzania with our oldest daughter right now seeing what it's like working on a farm. and it's that being there that helps you understand okay it's going to be hard, you know. how do you get, keep back venes cold, how do you get the farmer education right. if the roads aren't there, it's hard to get the farm out and sell it at a right price. it's not yeefs -- easy but you can come back to the wonderful country we live in and not feel like geez, why are they for lack of a little bit of money, why are they having such difficulty. where even with all their efforts, if that kid doesn't get the nutrition i don't care how hard they try at school, they're

not going to learn. >> rose: three is that development does not mean overpopulation. she wrote this but make her point. >> well this is a myth that i believe so much. both she and i that the early days of the foundation we weren't sure whether to get involved in health. we got involved to fund contraceptive tools. the foundation was quite small compared to how we grew it later. and partly we were hesitating. and it was wonderful. we met the people involved in this contraception availability work. and they educated us about how as you improve health, women voluntarily choose to have less children. and that's why the only places in the world are either bad health and high population growth or good health and low population growth. >> rose: the point is made that in fact there are many women in certain areas who because there's so much childhood debt, they have a lot

more children than they might otherwise have if they knew about either contraception or good health practices. >> right. so if your parents want to have at least two children survive and they want to have 90% chance, then they're going to have to have quite a few kids to get that very high probability. and so only if they see the kids are being healthy, there's a bit of a leg to get a bulge in their population where you cut the death rate down and before the birth rate drops, that budge as it moved up into your working age is call the demographic dividend because of the percentage or population earning income is very high. and that's often the time when a country is lifted up into this middle income status. it's quite beneficial. but now we know that the world is going to peak in population. we've had the most number. we're past what is called peak

baby. we've had the most under five year olds that the world will ever have and it's taking that age pyramid and filling out the higher age groups that will take us from the 7 billion to a little up from 10 billion. >> rose: tell me about james burke and his book about the renaissance and how it influenced you. >> well, it was kind of a mind blowing thing to learn that the mind set in ancient days was about decay. that the garden of eden, everything was perfect and pristine and they saw that things were falling apart. and the idea of new knowledge, new invention just was born. the medical knowledge came from a tusand years before. but then when they started in painting and logic and medicine to find out that those old things they haven't come up with these techniques. and they were wrong about anatomy and they, you know, hadn't seen, they hadn't mapped

things out. there was this sense of we can discover new things. that mankind's curiosity, that we can build a better world. and that mind set, that forward looking the world will be better in the future than it is now. that helped fuel this sense of okay, let's do science. >> rose: is that the reason you signal out these benchmark that you talk about in terms of 2035 we can do this and that and in 18 years we can eradicate polio. >> yes. i think this negative mind set where people don't see the wonderful progress. actually it's almost like olden days where in fact the american public when asked about their kids' futures or poor countries or a variety of topics show that they are more aware of the problems than the good things that are happening. and i have a concern about that. certainly in terms of their generosity but in terms of long

term investments as well. >> rose: what about public understanding of these kinds of issues. you're doing what you're doing by writing a letter and capturing my attention and other people. >> yeah. i don't know. i hope that we can correct some of this. and i hope people like good news. good news maybe it's not as easy to spread as bad news but it gives you the basis on which you should make new decisions. >> rose: talk about also choices that you make. for example i think was it peter singer who makes the point maybe we should spend less money in building a new wing of a museum and spend more money in terms of global health and blindness. a philosophy i suspect you ... >> i think all philanthropy is

great. blindness. culture things, it is hard to compare. he creates a construct where he talks about how people want to avoid blindness and how strong that instinct is and is therefore able to create a framework that he tries to have a value system about these things and it comes out the way that i happen to be spending my money. but i wouldn't want to abridge in any way philanthropist's ability to spend. i think if they had the confidence that the money against blindness was well spebilityd and -- spent and wen show them that, a little bit that holes back even personal philanthropy as well as these government aid amounts. >> rose: i want to talk about infectious disease in a moment. when you look at these goals that you have and beyond having a broad sense that it's possible, what is it necessary

to make it possible other than a mind set. clearly metrics, accountability, a sense of what works and fueling that rather than what doesn't work. tell me how you get there. >> well you have to fund new science. you have to fund the malaria vaccine which wasn't being done. the center in mexico that improves wheat and corn almost shut down because it didn't have enough funding and yet those better feeds that come out of there has an incredible effect. who is supposed to fund those crops for people to grow more. it's not clear. the poor countries can't and the rich countries could end a up missing that as an opportunity. so science, innovation is a starting point and systems where you're building up a local capacity. that's always very difficult. >> rose: what's the balance between the two, in terms of developing new vaccines or

developing cooling systems so you can get vaccines already around to those people who need them. >> the biggest part ends up being the delivery. the science piece was so under funded that actually we spent about 40% of our money on that new tool discovery piece. and about 60% undelivered. >> rose: delivery is to get the cooling system. >> it's to buy the vaccines themselves and then to pay the primary healthcare worker who actually goes out and do does that delivery. or in the case of aids, you'd have invent a new vaccine and getting it out there to people as life saving medicine. so the biggest numbers are in delivery but if you don't fund the up stream invention, then you're missing, you'll never get

rid of malaria. >> rose: does that have to be a constant ongoing effort to go up stream. there's never a point in which you stop going up stream and say we found what we need or is there. so now we can simply focus on down stream. >> well, we decided our foundation will end 20 years after neither of us is around. because when you think hopefully that's like 30, 40, 50 years from now. i think the problems of global health certainly infectious disease can largely be solved during that time frame. >> rose: let's go to pole oh. where are we on polio because that's been a particular, and what's interesting about polio is you're getting money from other people now who come on board with gifts of $100 million to say i support this go make it happen. >> yes. mayor bloomberg, carlos slim. so a lot of people have joined. they not only give money, they talked to other people. 2013 was a good year in some

ways. and you went now it's now the third year. they've had no cases. that was very impressive. we had two new outbreaks, one in syria, one in somalia. so we've generally expect about one a year. and so that was a bit disappointing. the ongoing challenge, the big challenge is nigeria and pakistan. nigeria has about half as many cases. so we're rushing to get things really right in nigeria to try and get it done before the unrest around the 2015 election causes a destruction away from all the health activities. so we're close on that one. in pakistan, even in the last few days there have been some tragic killings. >> rose: what are they about? >> well, the polio program has been demonized as a plot of westerners to do something bad. sterilize women, know.

almost as though it's got a bad intent. and so the truth is on our side, we're just trying to help those kids not get paralyzed. but we have to have voices that are trusted, muslim leaders. other countries that they look to. and so we have the vaccine from last may. we've got islamic development. a lot of middle east leaders came in to give to the campaign so it's not just a campaign from the west. but that lack of trust in the north of packstein, that's a real obstacle. we need a break through there. the president of pakistan committed to help on that, red cross, a lot of people. but we've not made that break through. this week's news just shows we're not there. i hope for it because you know all we have to do is have them

know what's true. >> rose: are you spending more time lobbying foreign leaders and going to washington as you have in the past. >> the recent budget agreement in d.c., we suggested that the u.s. go up from 150 million a year to 200 million a year on polio. we spend over 300 million. and amazingly, in a bipartisan way in a very tough budget agreement, that extra 50 million was included. so it looks like the financial piece will not limit us from having a success. >> rose: how does the foundation work with the government in terms of pilot programs, in terms of being able to prove that somebody is worth doing and worth moving up to scale. >> well, the u.s. government is the biggest foreign aid donors, about 30 billion a year. a bit over 10 billion in areas

that we also work in. aids, malaria. and in the aids treatment area, the program that was created under bush, very bipartisan. it's continued to be funded even in tough budget times. the u.s. has taken a lead on implementation. we tend to go do measurement, gives them a little bit of advice. we had to work on circumcision to show that actually teenage boys in these affected countries were willing if presented the right way to get circumcision which turns out to cut disease transmission by over half. and so that's been a very good partnership. the u.s. has been amazing on aids and malaria. >> rose: chees the change on hiv/aids? africa. >> it's come down not as much as we'd like to see. it's about 20% off the peak infection rate. it's about 25% off the peak death rate.

we still need to get the drugs out and get the adherence up a bit. we still need some more tools. the science is really showing us a lot of pathway to get those better tools. the next decade will be exciting but we have to stay the course and keep funding that treatment for a long time. >> rose: in terms of africa to look at the last five years that seven out of ten the fastest growing economies are in africa. what does that portend. >> the african economy didn't grow for a long time. even the longevity went up, literacy went up. charles kinney wrote a whole book getting better that talked about that gdp wasn't moving, yet their lives were improving. now, that's changing. even countries like ethiopia that were very poor, have increased their gdp a lot.

the agricultural policies have helped there quite a bit. infrastructure helped quite a bit. you have central african republic, mali, democratic republic. when you have conflict in those land laund nations in africa drg drc is the one with the largest population, about 60 million, that's going to take time. those are very tough places. the coastal countries is where we're seeing the growth. kenya, tanls -- tanzania. >> rose: botswana. >> they are the wealthest.

>> rose: are you for the change negligent indication. >> the asian countries and the u.s. continues to grow. the way that they evaluate their teachers, train their teachers. and some cultural intensity around education means that when it comes to being good at math or signs the reading or writing the distance has really opened up. the administration has pushed to have programs, arne duncan with the support of the president has pushed for helping teachers get feedback. and having observation, student surveys, learning measurements, things that can help us say okay the teachers that are doing well, let's really look at best practice and spread those around.

but it's slow. state by state, you get reversals. here in new york city, the charter movement may continue to get strong support, may not. some concerning things have been set along those lines. >> rose: talk about technology for me too because many people think that technology's kind of seen for everything and you have been out front in saying it's not. especially in those areas where you're concerned with in terms of global health. explain that to me. >> i would say that is equally to education. just because we have amazing websites like conacademy and good things to motivate the kid, to make it fun, the teacher is still at the center. we're going to count the teacher with which personalized learning technology and they have the kid go off and relearn various things. but the personnel system that improves that teacher and helps

them be good is as important as in african health care that primary healthcare worker whose got to show up and be trained and make sure their supplies are in stock. and so amazingly we keep coming back to yes, magic tools are part of the arsenal. but the basic design of the personnel system, the measurement, if you don't get that right, which in places like northern nigeria, it's not working today. then anything else you do including new vascular -- vaccines is not going to have as much impact. it's lessons in our key domain. >> rose: when you call on a government do they say my god thank you mr. gates, please come today. are they anxious to hear from you because you're talking about programs that will affect their own citizens in terms of health and programs that are opportunities to lift them into

the middle class. >> i've been very impressed with the government leaders willingness to sit down and hear about other countries in similar situations that are doing better than they're doing. they're getting vaccines out or running the primary healthcare system or farm sector's far more productive. and being able to get their ear and give health and agriculture a little more priority than they receive otherwise, that's beneficial. ethiopia is a case where mellis, the previous larytd he sort of didn't trust don'ters for some reason. in a meeting with melinda he said come in and help us redesign how agriculture gets done. he hired the top people from the foundation and created what he called the agricultural transformation agency. we gave him the resources to go do that. that started five years ago and now the pay offs incredible. the new prime ministers carried that on in a great way.

so if they feel like they're going to be with them for the long run, that you're not trying to get a photo op and you have experts who has seen these kinds of problems, then you can get them to may attention. so i'm very happy with the reception we get. and even on polio where i'm calling up always saying hey you got to do more you got to call this guy, you got to make sure this happens. they take the call. >> rose: any push back saying why polio because yes i understand mr. gates that you want to show that we can do things about polio. and it's very important to have the frame of mind that these infectious diseases can be conquered but we need dollars for a whole range of diseases having terrible effect on so many lives like cancer. >> well, infectious disease dominates in these countries in

their health picture. now if they get richer, if they get obesity. >> rose: but not here as much. >> in the rich countries, it's heart disease, cancer, neurological. you have a few countries that like india where they have both at the same time, that they have middle class people where diabetes is going up. at rates higher than you would expect but they still have huge infectious diseases. they're the runs -- >> rose: go ahead. >> mexico has moved out, infectious disease is very low there. but now they have a obesity level that rivals our own. >> rose: it's very interesting when you thank you about the necessity of bringing out of poverty into the middle class, it brings with it a set of problems. health issues are one, also climate change which affects health too. >> right.

so i wouldn't say that the development agenda's the only big problem, i would put it at the top of the list, the equity of everybody being in middle income countries. but boy we better take on these, the health problems of affluence and the environmental problems of affluence but there's enough resources you can put a carbon tax and fund the rnd. they don't have to be competitions where you pick no of those three things we can only do one or two. >> rose: speaking of that we watched this weekend more extreme examples of pollution in china. what's your take on china, its ability to deal with those kinds of issues that have to do with its own industrialization. >> well i think you can saying the u.s. at the level of wealth that china's at today and say what a horrible polluted place it was. i mean, it was terrible. and we didn't even know the

mistakes we were making. china has the benefit of seeing certain chemicals we put out there were a real problem. now they've got a lot of work to do. >> rose: the first to say look you took longer time don't expect us to move as fast as you expect us to. >> they'll move faster than we did. this pollution issue really has bothhe government, which in terms of executing on activities is very capable. and the people quite focused on them. so cleaning up the coal emissions, cleaning up the car emissions. they're on track now, and i think it will be quite impressive how quickly they can move because they've seen solutions in other rich countries. >> rose: with the new leadership of china. >> in fact he was vice president before and both he and his wife, we had interacted with quite a bit.

>> rose: she's a singer and a general isn't she. >> she's very impressive. i got to know her because she works on the three diseases we work on in china, she works on hiv, she does a little bit on tuberculosis and she does a lot on anti-tobacco, smoking levels in china are very high. those are the three diseases that they're not given their wealth. they're not doing as well as you'd expect and again they got it in their sight. >> rose: how do they turn around the economy from an exporting economy to a domestic demand economy. >> i have quite a positive view of that. you have a range -- >> rose: ability to turn that ship around. >> well they're doing it, they're doing a very good job of it. now growth will drop from the 10% level to as low as maybe five, six percent as you're making that change. you have a credit situation where credit's been kind of in the wrong place you control

interest rates. but if you got a technocratic issue about how you manage an economy and the structure of the economy. talking to their government leaders, they looked at countries in the past. it's so well informed and looking at the numbers that they'll do the best. now every country that's gone from these high growth periods into these areas they've had blips and growth. i'm not sure china has to have that. we certainly had many ourselves that we went through. and if their demand comes down, for china six percent growth is not a disaster. >> rose: what do you think of the president's speech on the balance between security and privacy? >> well, i think you can strike a balance between those things. >> rose: did he find the right balance in your judgment or not? >> well, i do wish people would

say that, remind us that when it comes to stopping terrorists from having access to nuclear materials to biological weapons of terrorism, we're all, we all have an interest in some cases in the government catching those activities before they go too far. and so privacy is absolutely important, but you know, who is the, do we have a balance, do we have an advocate in there who says reducing the chance of severe terrorism is also a very appropriate role and that doesn't fit nicely in the u.s. versus non-u.s. type framework. >> rose: have you changed your opinion of edward snowden at all? >> no. >> rose: there's been a kind of shift in terms of snowden. >> i've always had a negative view of what he did.

i can't see that positively. >> rose: one of the thing the president's looking to is nobody wants to, he doesn't want for the government to house all the metadata and all of that. he's looking over the next 30 days to get some recommendations. where should it go? where should all that be held. >> i'm notn expert on this. i don't think there's any intrinsic reason why you couldn't cept up a government agency where you really did trust them to use it in the right way where the records were there, the safeguards were there. i think every solution has some challenges. and he ruled out the government holding it which might have been my choice. the idea that when you know somebody's a bad actor that you can see what they've done to the last 90 days, who they've called, various data activity

they've engaged in. i think that's just so valuable and you ought to be able to prevent abuses. >> rose: you don't seem to be worried about the privacy whether they might have been invading the privacy. or even, i mean the significant change the president did is you can't just go query to get this information. you got to get a court order. that's one of the changes the president's recommending. you don't seem to be as concerned about or am i misreading you. >> all of the metadata search as far as i understand always required the court order. the fact that the metadata search has a court order i'm fine with that. that's a nice threshold. and you know, at the end of the day, we should be able to have privacy, and still count on our government to be out there looking for bad actors. >> rose: you think we found the balance? >> i think technology will continue to challenge us. i mean, you see different policies take cameras and

cities. london has lots of cameras and somehow they've gotten to the point where they trust the police to use those in a way and crime has dropped because of that. it will be interesting to see if the u.s. adopts a policy where they feel the same way about that. when there was a terrorist attack in london, those film clips were invaluable in figuring out what happened and catching those people. but it's all about do you trust that if you're taking all these videos, do you trust they'll be used properly. and you know, can we set up government structures that we will basically trust. in the u.s., i think we ought to be able to do it. it's not my area of full time work. >> rose: i want to go to some other things but one more question about that. the healthcare debacle.

i mean, if the president called in people not necessarily you but people you know and respect and said help us design this system in a better way, would it have been a lot better off and people you know in the technology community have been able to do that or did he have that and screwed it up in another way. the government. >> the problems are very unfortunate and it's easy to second guess how that could have been done better. i don't think that's a fundamental issue. in fact, a person who is retiring from microsoft just a few weeks ago got called in to make sure they do get their act together. the key issue there is, is it attractive given the way that the prices are somewhat rigged against the young. that is, the price when you sell to the young you make a lot of money. when you sell to the healthy you make a lot of money. when you sell to the old or not healthy you lose a lot of money. the big bad and the scary thing

here is will that balance happen because that's the only way the pricing works. so people are sort of paying attention to was the website too slow or did the records make sense, fine. but that will be it. but there's a bad in this thing. >> rose: that the young will sign up and healthy will sign up. >> you have to price higr because of the mix and more people drop out because you have to price higher. it can fail to work. now if all the prices had been sort of market-driven, then you're not a subject to that. but then the prices for the 63 year old, 64 year old, they decided would be too high. i don't know if they did that right. certainly the healthy versus unhealthy, that is key to the design. there's no way to get rid of that. you got to get healthy people signing up. there's another measure which is how many people are signing up when they didn't have insurance is when will that happen. the cost and the benefit of the things is proportional to that.

people didn't like obamacare, the fact that not many people sign up, you know, i guess maybe they feel that's good. i do think one way or another getting coverage is a good thing. and i think there's going to be some fine tuning and why should the atmosphere of someone for recrimination, that may make the seeking out, the right trade offs. could you even amend the bill, it's clear you have to amend the bill. it's tricky for something to be so controversial it has so many experimental elements that the idea that you would get it right from the beginning is quite unlikely. >> rose: if you could define what the debate ought to be in this country, to advance our progress into the future for the country, tell me what that debate ought to be. >> we need to look at government expenditure. not if it's all bad or it's all

good. we need people with defects i'm immersed in that. i would tell you how i would tune various things but overall i like the u.s. global health spending and i can go to people involved and tell them what i know. but we need that for agricultural spending. the expertise. ideally not just outside experts but staff in congress and elected representatives in congress. we need foreign policy experts not just in their corners. and i worry a little bit that it should be about technical expertise. given a certain budget, if you want to help the poor, should you have an incomes policy or should we have what we have today where it's rent, medicine, fuel, food. all very special policies that you have to apply to a bureaucracy, the criteria might be right or wrong.

i would love somebody who was neutral in the sense of not seeing that it should be ten times bigger for it to go away, take what we're spending on the poor and go look at it. it can't be right. it accumulated over many years. it's got so much complexity. so the kind of tuning programs and the real discussion of what if people want it to be smaller, what is it they really don't like. how do you get people to state a position really on the specific spending. i know there's rates out there but really get into a discussion. i worry because it's become so complex and because you're sort of fighting in your corner politically is what you get elected is this kind of intelligence of okay is it written well. that can go down at a time where complexity demands that we have more understanding. and we're kind of in the lead.

other rich countries aren't spending what we are in healthcare. they're all looking at us and say go figure that out so we can just follow your footsteps. >> rose: what is that about 18% of our budget. >> of our economy. it hasn't grown quite as much in the last two years. people are arguing about why that is. but it can be debilitating if we don't get that cost increase under control. >> rose: you go to seattle you have three offices as i remember. one is that micro soft, one is at the foundation and one is sort of in between, personal. >> right. >> rose: are you spending more time at microsoft now because of the change that has taken place. >> we're in a field search so the board is more active right now just making sure that goes well. once there's a new ceo, then it will be up to that ceo if they want to meet my time. >> rose: the ceo says i need you on campus you would be willing to be there and spend

more time. >> not full time. my biggest job is going to be the foundation work but i would make trade offs and spend more time. >> rose: is it productive for you to do that some way you don't want the guy to turn the firm around. others say yes you do because you want a ceo who is strong enough to be his own person to be able to have that. >> it's up to them. of course it's up to them. i'm not going to impose myself. >> rose: but you're the biggest talk obviously and you have a huge concern about microsoft's future. >> i log e-mails and it costs very little to send e-mails. but you know, the tech center is very dynamic and whoever the leader is going to shape the new direction. >> rose: give me a profile of a leader that you think would fit the deminds -- demands of microsoft today. >> that's not fruitful.

>> rose: why not. >> the board is working, it's a mysterious process. when the smoke comes out -- >> emily: yes. but i mean when will we see white spoke again. >> again a mysterious process. >> rose: you and i know often executives are admired if they plan well for succession. it doesn't seem like there's been smart planning for succession at microsoft. >> well i think tech companies are, they're very challenging to run. the rules of what works in one area that will change. i can't think of a tech company that had some textbook case of succession going on. so i apologize. >> rose: i was trying to think about hewlett-packard,

whether that would work. >> oh my god. >> rose: that's true. we've seen a lot of people come in at number to at all of these tech companies and then they seem to fall by the wayside. >> founders do well but only because of the phenomena that 999 out of a thousand finders you never hear their names so the darwinian selection that happens before somebody becomes known because their company fails or gets bought. and you know, so those people look like they know what they're doing but the failure rate of picking them is extreme. once when you pick a successor you'd like to have a higher success rate than picking founders. >> rose: but you had hathaway, you picked a successor at warren, have they not. >> warren consulted with the board about his thinking on that subject and that's very good. >> rose: all right. one more question. does microsoft need a young bill gates?

think about it. >> microsoft's success was always a team of people. and to sort of mythally say i alone did something that oversym -- simplifies the past. it has wonderful people there. the new leader's going to pick a new direction. and that can either be somebody who draws on the technical strength of the people or themselves. there are multiple models that you could go down. >> rose: but you believe in your heart he or she has to be grounded in technology. >> she has to or he has to love technology and either be good at orchestrating these or bring them out themselves. >> rose: finally the seattle seahawks are in the sure bowl. will you come to the game or watch at home. >> i'm very excited about it.

the whole town has gone crazy. it will be a special event. >> rose: paul alan is very proud. >> he should be. i was with him in detroit when pittsburgh beat us. he was excited to be there. this time he hopes for even more. >> rose: thank you for coming, great to see you. bill gates for the hour. thank you for joining us. see you next time. captioning sponsored by rose communications captioned by media access group at wgbh access.wgbh.org

and their buns are something i have yet to find anywhere else. >> 'cause i'm not inviting you to my house for dinner. >> breaded and fried and gooey and lovely. >> in the words of arnold schwarzenegger, i'll be back! >> you've heard of connoisseur. i'm a common-sewer. >> they knew i had to ward off some vampires or something. >> let's talk dess