>> rose: welcome to the program. tonight, lloyd blankfein the ceo of goldman sachs on energy, the shell revolution, wall street and income inequality. >> in a way, gdp and growth is like, the increments of gdp is like increments to oil. if they found oil anywhere in the world, of course it's wonderful for the country that discovered it. but that oil that then gets added to the world supply, it reduces the price of oil anywhere because all things being equal, you add supply and demand stays the same the price goes down to everyone. it's a win fall to the country that sources it but it benefits everyone. same thing with gdp. if china grows its gdp and chinese gets richer of course it's a wonderful thing for china

but what do they do with their riches. they'll buy goods and services, ice homes, goods and services that the united states produces. that would be good for us too. whenever you add a resource into the world, a commodity whether it's energy or wealth, it's good for the person who really acquires it, but ultimately it trickles across the world and is good for everybody. >> rose: blankfein for the hour next. >> there's a saying around here: you stand behind what you say. around here, we don't make excuses, we make commitments. and when you can't live up to them, you own up and make it right. some people think the kind of accountability that thrives on so many streets in this country has gone missing in the places where it's needed most.

but i know you'll still find it, when you know where to look. captioning sponsored by rose communications from our studios in new york city, this is charlie rose. >> rose: lloyd blankfein is here he's the ceo of goldman sachs since 2006. he steered it from difficult times notably the global financial crises in 2008. goldman sachs is holding the new york american energy summit in new york city and takes a look at how the country can be environmentally responsible and also profit from the north american shell revolution. i am pleased to have lloyd

blankfein back at this table. >> thank you charlie, good to be here. >> rose: now you work without a jacket, correct. >> i am right now. >> rose: tell me about this summit. because everybody's excited about the shell revolution, you know. so what does it mean, how fast is it coming and what will it change. >> well a lot is going to change when you think of the u.s. being as close it is to energy sufficiency and not having to be a net importer of energy. you think of the history over the last 40 years, since the arab oil embargo when it was driven home how dependent we are on foreign oil and the history over the last 40 years. can you imagine how different things would have been over the last 40 years and project forward and imagine how different it will be over the next generations if we can get this right and make north america more efficient both in terms of the economy and in terms of the geo politics and america's position in the world. it's quite a blessing but the benefits of that blessing don't

just come automatically, you actually have to do things so we can take advantage of it. >> rose: what do we have to do. >> we have to reconcile the schism between the people who are only thinking in terms of the environment, people who are only thinking in terms of supporting the economy. and get some sort of accommodation between the two. both of whom are right. it's not a question of one wrong one right. both are right but accommodation has to be reached so we can go forward and have rules that are durable and reliable so people can make the kind of long term investments that allows us to receive the benefits of the energy situation. those benefits are growth and jobs. >> rose: we'll talk about that but in terms of rules, congress makes the rule you're talking about. >> congresses has a lot of competing jurisdictions. are we going to be exporters of l ng driving the price down in this country and using the long term bills of dollars in

investments that only receive terms after ten years or more or are we going to distribute it overseas in which case it will go and lower the price of energy around the world in which case there's noto move your businesso the united states. licensing, getting these things going. pipelines which are not an unbridled good because they raise certain environmental concerns which are legitimate. but if done well, properly regulated and when if it doesn't take a lifetime to get those things off the ground we'll get the benefits in our lifetime. >> rose: you're in favor of the keystone project. >> no, i'm in favor, which brings us to the point of this conference which is to bring a lot of interests together who have strong opinions ask get them to engage in a constructive dialogue so we can reach an accommodation. >> rose: you don't want to be against and for but you want to be how do we find common standing. >> exactly. we would like to be an honest

broker, a catalyst, if you will. personally i think we can have pipelines and do them in the right environmentally sensitive way, get the benefits of the boon to the economy and at the same time take advantage, make sure it's done in a way that doesn't, in an environmentally safe way. in fact you have to do both of those things. it's not a winning game it's a get along game. either side if people are only interested in economic growth argument got their way on everything who would make a long term investment without thinking in the back of his or her mind that gee, will this regulatory regime be stable into the next administration or will this be reversed. similarly, if you were making a bet that you'll never be able to develop these energy resources or transport these energy resources, who would make a bet on the basis of that. i think you have to have a compromise between the two.

not so much because getting the baby is a wonderful thing but because it's the only thing that will ultimately be stable in the long run. the point to make here is that the benefits of these investments can only be realized after a long period of time. but once you make the investment, you can't withdraw from the investment. >> rose: to make human capital vent businesses have to have certain rules they can exist and stability so they can invest it -- >> once you make an investment like this you may be locked into that investment for decades. but every day you could decide to defer that investment day by day. the path of least investment is to defer it. you want to know the rules set under which you're laboring an investment will pertain for a long time. >> rose: should one role of governments around the world try to create an environment in which you have rules and

regulations and economic opportunities so bad it's an incentive for business to invest. >> i think an incentive but again you have to take account of the fact that we not only want to invest but we want to leave the right kind of world to our children also. be able to breathe and have clean water and good life-style. you want to have, you want to incentivize people to invest in sensible projects that are done in the most environmentally safe way. >> rose: has that happened over the last 25 years. >> i think we're stepping in the right direction. for one thing there's another element. people have to agree on the faxes or agree on a band of facts. so for example there's arguments back and forth of how much more environmentally friendly natural gas is. well if you burn natural gas of course it's more friendly than burning oil. but if you don't transport it properly and you don't take it out of the ground properly then it will leak methane which is a lot worse than oil. so the answer would obviously be

let's gauge natural gas with a set of rules regarding its development and its transportation that's done in a way that doesn't allow methane to escape. and those rules have to be put in place. >> rose: they can do that if in fact everybody focuses and does what's necessary and has the right rules it can be done. >> i think that's right. and if one side manages to get permitted without those requirements, that's a very hollow victory because in the long run, you know you're going to have to do it in the right way so you might as well have the rules set so that you and your competitors have to do it in the right way now so that again you can make that investment into durable investments. >> rose: how much power does goldman sachs have in terms of washington and in being able to see the kind of rule making it wants. advantageous to whatever mode. >> all our power, we have influence but in a kind of geo

political term it's the softest of the soft power. softest of the soft power. we have people on the macro side. we put out ideas and defend our ideas, we're provocative and show initiative but at the end of the day we don't have the power to execute. >> rose: it's mostly because the research and analysis, mostly because you want to see it work and the way the world's going so that you can make reasonably, reasonable decisions with a fair understanding of the risk. >> sure. at the end of the day, all of our activities, the success of all of our activities correlate with growth and gdp. we're in favor of growth and gdp. sustainable growth and gdp. it does us no good to have a spike in growth and have everything everything be discombobulated. if you want to have the best

projection of goldman sachs going forward i ask you where is gdp growth going to be. is it going to shrink, it will shrink at a multiple of that. if it grows it will grow in a mother of that. we're interested in growth and interested in the benefits that flow from growth like jobs creation. we are finance sears of activity. if you want to know, we have good relationships with the people who need capital and we have good relationships with pools of capital. we analyze the needs and we put our, we validate it by culling out and doing, raising money for them either by lending them money or financing sometimes using our own capital, sometimes an ipo and that validation will draw in investors who think they are good at identifying those opportunities. >> rose: has anything changed about the businesses you were in, just the description you just engaged in as a consequence of the recession that we went through in 2008. >> well i think there's a lot more focus on us, a lot more

regulation and oversight. a lot more process internal to goldman sachs and exturn to goldman sachs making sure that things are well complied. for example, when we go out and validate an investment that we're very transparent about what we do, rules that govern what we can say about certain things and certain times. making sure that both sides of an issue are explored. so in other words, yes there's more process and there's more scrutiny oversight. but basically, the substance of what i said, what our role is in the world is an intermediary between people who need capital and the big pools of capital, that's been pretty, that role has been a necessary role for thousands of years of financial history. >> rose: talk about this conference that you're having and what might come out of it. how fast will the shell revolution come on stream.

when we will see the consequences. >> there's a number of consequences we will see. one consequence already with the ambiguities that exist, you can see part of the revolution has alreadycthere's a lot more enery becoming available. oil and natural gas. and we're well on our way again not being independent because we don't necessarily have the right kind of fuel a don't necessarily have it in the right places. but towards energy sufficiency. and generally we talk about, we don't just talk about u.s., we talk about north america. and the continent which brings up the question of whether you ship it down from canada into the united states which is currently most of the export's from canada. on the production side, we're seeing that already. what we need, right now it's projection over consumption. what's lagging now is not the ability to get it up out of the ground. what's laggingand so, and it's g

thing. it's not necessarily intuitive but when you go out and you frack and do activities you can turn around and sell it quickly. your return on investment returns quickly if you're the developer or the producer. if you're the consumer and you have to go out and plan and build a factory, a chemical plant for a couple of billion dollars or more you may not get that return on investment for ten years or more. so there you have to have a wide wide runway of seeing ahead and seeing the price can be low it's going to be stable. you know what the rule set is going to be. so really it's much easier to develop and to produce it and that's why those statistics rise. what we're not really seeing is the plants and the manufacturing jobs come from it. and i think that's where the rules and regulations set come

in. >> rose: the shell revolution will affect us, it will affect china. they will have their own shell capacity. >> sure. by the way our shell capacity to the extent that we're taking more natural gas and oil out of the ground, it means we're importing less from the middle east. china imports more oil from the middle east than we do. there's a million reasons why we have a lot at stake in the stability of the middle east. but one of them had to have been the fact it was a major source of our energy supplies to the extent that we're not the major importer of that oil but oil from the region going to china. you're going to see other powers in the world have a stake in the. >> rose: will it diminish the influence in qatar and other countries that are either oil or gas rich and russia. >> well don't forget there's race. there's more supply but more

demand coming. the thing that's more stark not demand that will meet the new supply but different customers. that will have geo political consequence. >> rose: who are the new customers. >> the new customers will be china. >> rose: they just signed a big deal with russia. >> absolutely. the russians and chinese were rivals in a lot of ways and they have to transact and it's in both their interests to do so. russians are looking for new markets and chinese are looking for sources of supply and we're not competing for sources of supply in the same way because we have our own supply. those are some of the geo political consequences that will develop over time. >> rose: how out into the future do you think you can see? >> i'm in the risk management business so i don't think i can see four inches into the future. >> rose: your firm has a reputation of being pretty good understanding the future and being able to make some analysis

about what risks to saying. >> i'll confess to you what i think what we aspire to is less foresee the future and more be a great contingency planner. because, and sometimes the contingency plan is really well and you can respond very fast to what's happening because you thought through all the possibilities. you can get off the mark so quickly it looks like you false started. it looks like you anticipated the start when all you've really done is listen so closely that you got off the mark quickly. i think it's hard enough to predict the present. think about it, perspective. it's very hard to step out of your context and see what is happening. i have views about the future but i'll tell you it wouldn't be a very good risk manager if you let what you think was going to happen, have too great an influence on what you planned for and protected against. what we really do is we really contingency plan. what might happen, what could

happen. >> rose: what is your core competence. >> personally? >> yes. >> i think i'm, i think i have, i am highly functional paranoid. and if i overstated the highly functional part i'm sure i'm paranoid. >> rose: paranoid about what. >> i have to worry about stuff. if the phone rings too late at night or too early in the morning i think oh my god what happened. i have to answer. in fact if it stopped ringing i call everybody i knew at work to find out what i missed. you know i spend about, i have to spend about 98% of my time worrying about-/a the 2% worst contingencies. >> rose: when you look at the world today, how has it changed most dramatically in the last ten years for you. >> well for me -- >> rose: the role that you have. >> i can't think.

i've been a ceo of goldman sachs for ten years and president for three years before that so my last ten years isn't much of a conversation talking about my role with goldman. >> rose: goldman existence has changed so what goldman does today is dramatically different from what it did in any way because of change in global circumstances. >> sure. the firm evolves so i would say if you go back a dozen years and not much more than that. we were a small firm, a much smaller firm, much more domestic firm. we were 15 years ago we were a private partnership which was, you know, a small firm without a lot of access to the capital markets. since that time we became a public company with a lot of access to public markets and therefore a large balance sheet. one of the biggest differences is we were always in the business of giving advice as a result of having our balance sheet and being able to raise capital ourselves and having a much bigger balance sheet. we cannot only advise people what to do, we can help them

execute more. in other words you can provide the financing. that's a very big difference. as the world has developed and grown into the growth markets we've grown with it. 15 years ago, goldman sachs didn't have to go to china two or three times a year or india every year or brazil or some of these countries and as these countries have grown around the world what we do i start the conversation by saying a lot of what we do, the success that we would have correlates with growth so naturally we chase growth around the world. we not only chase growth that exists but we try to drive growth wherever we go. >> rose: i asked you this morning if you look at the global economy there's a kind of recovery going on around the world. at the same time everybody talks about we need more growth and the question is why have we not had more growth and what do we need to do to incentivize growth. >> well, we're having growth. look we had a very big shock. we had a financial shock which has other consequences associated with it because we

have shock to the financial system. there's an aversion. there's an aversion, there's more conservatism people accumulate cash and financial. we've seen, look, we're in a situation now where interest rates around the world are hovering around zero, in some cases 15 below zero. and people somehow can't find enough opportunity to take cash that's offered to them at no cost and deploy it. >> rose: why is that? >> because -- >> rose: why is that? >> well, i think sentiment is, you know, people make mistake. they are given nobel prize in economics but it's still not a hard science and you're dealing with sentiment and people. and when sentiment -- >> rose: people want to know about prizes for measuring. >> they measure it and do statistical analysis. but the fact of the matter is, you can have a change in sentiment and from one minute to the next, it not only changes your world view, it erases your

memory of what you used to think. people entered into 07 very very enthusiastic. they left 07. it's not just the economic system look at the sentiment in washington the poison politics that exist now. we got there and we can get out of that situation.( that's -- >> rose: the core question for me, and i asked you this earlier, as i said, what is necessary to give the confidence for those people who can get money at zero interest rate and have already a lot of money in the bank and they're not spending it. is it because they're unsure about the future. >> yes. >> rose: what is the threat to the future that they worry interest. >> look, we just started to have recently after low level of activity for a long time we just had a wave. >> rose: a lot of indemnity my business. >> i'll describe a scenario with you. people are watching and waiting and not wanting to take a risk and every time something goes

wrong you want to kill the pecial that made the mismakes. people are sitting in record levels of cash. somebody does a deal. oh my god i wish i had done that. and now i'm thinking yesterday i was thinking boy it's really risky if i do something. now somebody else did something, got applauded. i'm a ceo, i better do something too. if i don't do something. i'm just ascribing to how sentiment can suddenly change and people look for that. so record levels of cash wan and you can say on the one hand why aren't people use it. at some point people will come along and say and people are doing this, activists are saying listen you have soqif you don'tn it to your shareholders and let them use it and all of a sudden people say i better do something. >> rose: just what happened at apple. >> that's something that you could see going on in a lot of places. and so sentiment can shift and because it hasn't shifted, and by the way when it does shift,

no one will remember that it was different a week earlier. just people's mind set shifts. >> rose: why does it shift? >> again, we're talking about, we're talking about the human condition. by the way, these are topics that people have ruminated about. why is there a business cycle. trees don't grow to the sky. why should you be surprised when they don't. interest rates are hovering at very low levels now. doesn't everybody know they will revert to a higher level above zero councilmember)the economy . why will they be shocked. >> rose: but does that mean you remain notwithstanding how much you are a paranoid eternal optimist. because you know that interest rates are going to go up. >> well, i would say a separate

thing. i have been doing this long enough and in general, and look you know, i don't know just the things in front of me i know about world war ii before i was born. i know about history and people think one thing and they revert back again. thingsdsthings are really realld for a long time. by the way, it's not unrelated. there's a reason there's a cycle too. whe things are going really well, despite their best efforts, people get complacent and complacency sews the seeds of the next crises. how many people have people said and no matter what you say to yourself when the next crises strikes how many people are saying boy i missed the opportunity to buy the water front property when we had the last turn down. >> rose: how many people went out and bought a lot of water front property in 2008. >> by the way, but the very next time it happens, i'm going to do it because i will remember. well the next time that crises

happens your knees are going to be knocking together louder than anything else's. >> rose: see this is fascinating. what is it that makes us not willing to when we know things are going to get better from 2008. it is not going to go down forever. we know it's going to come back and let's say, why don't we do more. or is it only the smart ones who do more at that time. >> that's what warren buffett does so well. >> rose: so you took all of his money didn't you. >> i borrowed. i wish i had taken it but unfortunately i had to give it back. >> rose: why did you make the deal. because you needed the money or idea of his confidence. >> i needed both. fact of the matter is a number of people came to us afterwards. this is a week after lehman brothers when everybody was

fretting about whether the capital markets were open and this is before talk and we did a transaction with warren buffett which we preferred and got $5 billion. and the very next day did a common equity deal in the market so the markets were open to us. and with warren's money we got more than just money we got validation of somebody that's regarded as a terrific investor and somebody who knew our firm and this was important. people called us up afterwards and said gee i would have done that and that would have been great but with you i would have just gotten the money. with warren it was something more important. >> rose: a lot of people said to me at the time when you made that deal, i would have made that deal, you know. anybody would have made that deal which means that he is a savvy negotiator as well. >> let me tell you. negotiation took about 35 seconds. >> rose: is that right. >> yes. >> rose: you asked and he said yes. >> there were reasonable terms

to the risks he was taking at the time. >> rose: how frightened were you in 2008 because tim geithner writes about you and your voice he says. >> we were very nervous and i tell you, we were either, if you were alive you were nervous. he also wrote that and that's absolutely true. people say oh gosh, look obviously we were able to borrow money and do transactions on our own so it wasn't that the capital markets were closed and you never know. but what i forgot to tell you, we insure against risks in my business. you insure risks in your personal life that are 2% risks, 1% risks. was the risk of a cataclysm, risk of a failure that would have affected us and caused our own facial was that only 2% or 4%. people are going back and forth, people are saying oh i'm sure the systemic risk wouldn't have gotten to a level there wouldn't have been a series of dominos and failures. what do you mean was it less

likely than not, 50% probability, 30%, 20% probability. when you think about what was at stake. how much of a risk as a probability would it had to have been for you to big price for that risk. i think that the regulators and the officials did a very good job and of course they'll get excoriated for it. why because the world didn't blow up. it didn't blow up because they took the measures they took. if they hadn't, and you have to get into this debate about whether the world would have come to an end or not. how about there was some more than insignificant possibility. wasn't that enough when you're responsible for the safety and soundness for the financial condition of the country and the planet. that to me is enough of a threshold for you to take the steps that they took. >> rose: you think bernanke made the right decision later. >> i think they made great decisions in the fog of what they know.

there's no doubt in my pliepped writing a dissertation in some university library somewhere saying they should have gone three degrees more left or four degrees more right or i should have waited another week. given the moving parts and time and by the way given the courageous decisions knowing they were going to get criticized it's petty for them -- >> rose: is it unlikely it could happen again or will it always happen again because people grow from crises to confidence and overconfidence. >> look. i think both are right. i think we can improve the system a lot to make it less likely and make it less costly to people who are involved in the crises. but at the end of the day, the definition of enough time, the definition of infinity is that not, it's not that everything can happen, it's that everything will happen. and so given enough time everything will happen. and look, some of the things

that we implemented that makes the world safer makes the world safer from let's say the 20 year storm, the 20 year event. and actually make it more dangerous for the 50 year storm. look if you make everybody go to a clearing house, it will make it less likely that you know that a moderate problem will cause a financial because everybody will have the safety and protection of a guaranteed clearing house. if you have an event that's so big that it puts the clearing house in jeopardy. the once every 50. and so i think you have to do everything. you have more vigilance more rules more oversight, more consequence if that fails to achieve the right result. and a way of giving yourself out of a situation if all else fails in a way that protects the public the best. but if you're asking me could i imagine scenarios in which we get into difficulty again, the world unfortunately, this is not

a new phenomenon. when you're dealing with credit, don't forget, currency in the financial market's, things that are of value because i assert it and you believe it. when people stop believing things. at the end of the day if a company has a crises, if an oil tanker gets grounded or leaks happen and you question whether the company's run well or not and you pull up to a service station and the gas is $.02 cheaper there do you buy the gas, of course. the plant, material, and equipment are they still there and still valuable. sure. but in a financial institution because i'm getting a payment from somebody else and if someone doubts your solvency and the payment i have to make doesn't come in from the other side, you get kind of a domino effect and a chain reaction because it's all confidence. and that's why financial institutions and financial markets are different than everything else. we have a federal reserve system some people call into question

whether we should. but we have, there are central banks in the world and federal reserve system in the united states because everybody thought there needed to be a lender of last resort. when confidence gets shaken to be an institution big enough and balance sheet big enough to say i'm going to put the question of confidence out of reach. >> rose: that's exactly what they did. >> that's exactly what they did. >> rose: that's what the central bank did in you're. >> that's what they did in europe and do you know something people will say my god should we have done it, it worked and now you have to quibble because it worked. if it didn't it will be a entirely different situation. we had a panic and problem like this for every few years in the 19th century. and i think gone are the days when the bank of j.p. morgan could stride on to the floor of the new york stock exchange and say i'll by 10,000 u.s. deal and everybody says we're saved. the world is too big. the balance sheet of world is too big and it fakes a big

balance sheet like the government to take care of it. nobody should rely on it and people should be punished in they ultimately do need to rely on it. but taking, you know, but anyway. >> rose: here's what's interesting when you talk about that. i'm also thinking about the if aing that china went from double-digit growth to expectations around 7%, correct. >> mm-mm. >> rose: but it now has the largest economy in the world. >> or close to it. >> rose: close to it. what's going to be the consequence of that? >> well, you know, you can look in the worst terms u.s. has a competitor. in the best terms there's no locus -- >> rose: there's a market. >> it has a market. and look, in a way gdp and growth is like increments of gdp is like increments to oil. if they found oil anywhere in the world, of course it's wonderful for the country that discovered it. but that oil that gets, then

gets added to the world's supply, it reduces the price of oil anywhere because all things being equal, you add supply and demand stays the same the price goes down to everyone. it's a win fall for the country that sources it but it benefits everyone. same thing with gdp. if china grows its gdp and the chinese get richer, of course it's a wonderful thing for china. but what will they do with their riches. for some percentage of their riches they'll buy goods and services. they'll buy ice homes, goods and service that the united states produces and that will be good for us too. so whenever you add a resource into the world, a commodity, whether it's energy or wealth, it's good for the person who really acquires it but ultimately it trickles across the world and is good for everybody. >> rose: so it's not a zero sum gain. >> no. when wealth gets created, the financial system in this country and globally does two things. it helps to generate the wealth and serves to distribute it.

and so wealth created anywhere in the world gets distributed because how do people manifest the benefits of wealth. they buy things. some of the things they'll buy from us. if they're not big enough from us, maybe it's because they have restricted policies and we have to fight that or maybe it's because we're not competitive and we don't make things that they wanted. we have to blame ourselves. >> rose: take me to emerging markets like brazil. what happened to them because your own guy, to coin the term brick, so therefore when emerging markets came along he said to me at this table, one characteristic of an emerging market is the developing middle class, yes. what happens so that their growth has stalled for brazil and some other emerging markets. >> well, it stalled but i wouldn't, it's not, i wouldn't bet against it. i mean when somebody is new and something is fresh and someone's growing at a fast rate you get low volatility. >> rose: you create a new big class. >> you create a new buying class

and gets overextend and it consolidates and goes back. the 20th century was a great century for america but every year wasn't a great year for mr. panic of 07, the great depression. ten years. it was an awfully good century but we had a lot of bad years in that. if you walk away from brazil now in 2014, you may have 86 years of their century. >> rose: when you look at china in terms of what they're doing, there are those that argue, back to your energy summit, that north america is in fact the shell revolution takes place as an open end and all the jobs will have an economic engine that will drive the global economy more than asia. >> no. again it's not a competition. we'll help drive the global economy and they'll drive the global economy. >> rose: there are metrics here aren't there. >> let's look at it this way. the united states people are debating how fast is the united states growing and some people

say gee it's growing at 2.5% or at three and a quarter. it's -- china's economy as you said is almost the size of the u.s. economy and they're debating whether it's growing at 5% or 8%. that's the bigger difference. in other words, and again when you look at growth, it gets added to the world. the consequences of china getting it right and by the way 5%, they could go south or they could go north of 8 too. the consequences of them getting right or wrong sooner rather than later is actually a lot more growth added to the world than what people are debating about is realistic for the united states and it's very very consequential and that's why people are keeping an eye on it. china is entering into another phase now. before they were going for growth at all costs. and so growth at all costs, you run those factories, you keep them going and you keep going

going. at some point you decide you're rich enough that you want to breathe. >> rose: there was input of new money and there was a corruption too. >> a lot of corruption. when things are growing quickly, they build a lot of airports all at once, they to the a few in the wrong place. >> rose: when they make a decision they carry the decision out. state capitals can work. >> it can but i think behind the scenes and we're not privy to it it's monolithic. i may be chief executive officer but i also have shove and beg. democracy is the wrong word but there's difference of opinion and input that goes in china that necessarily we don't see.

maybe it occurs in the party or maybe behind closerred doors. >> rose: they have arguments in the standing. >> they have arguments, sure. >> rose: coalitions like everybody else and every other place. >> like everybody else. >> rose: so we live in this global economy and you and i have talked about this before in which we see more wealth than we've ever seen before. lots of people are writing books and having conversations about income inequality. and they're concerned about the consequences of the top 1% perpetuating itself and getting richer and richer and there is a division so that all boats are not rising. >> sure. well i'd say that recently, you know, first of all this has been going on for 30 years that there's been, i mean by the way, that doesn't relieve us of the problem, it compounds the problems that's been going on for decades where richer is richer and the poor is catching

up. that's obviously a problem and a destabling thing. i'm not sure i understand all the reasons why. look anything that exists i can offer an explanation but give me the explanation i wouldn't have predicted where we'd be. but you know, i'd say at a point which is great technological change in addition when you have a flat world where whoever makes the best product, everybody buys it from him. when anybody offers cheap labor everybody goes there and manufactures. you get a kind of a more how far a winner take all kind of world and that's created that we're seeing but it's something that is bad for everyone because it's destabling. >> rose: i understand all that but i mean at the same time, take a look at this. i'll give you a couple clips from people on the show recently and you know both of them at least you know one of them. christine laguard talking about imf making income inequity an issue. >> we're looking at income inequity because we believe that

it is macro critical. in other words it's raising a point where it's really can have a destabilizing and detrimental impact on the growth of the economies and on economies in general. so we done two critical studies in my view because we're looking not from a political or ideological angle, we're just trying to understand the fact and thecorrelation. and one is inequity, excessive inequity hurting growth. and the answer seems unambiguously yes. it's hurting sustainable growth. and the second study we did which goes against conventional wisdom was, is redistribution policies if adequately

articulated, is redistribution policies a break on growth which is conventional wisdom. everybody assumes for a long time that if you do redistribution then people will not be attracted to producing more, earning more, doing more because the more is going to other people. >> rose: you admire her. >> i admire her. again she's defining the problem. i'm not hearing a solution in it. do you know what i think the best redistribution is. >> rose: exactly what i want. >> the best redistribution policy is, obvious for aggressive talk system, but the bells redistribution is to spend more money and have the best educational system. that would be great redis tribution. take tax revenue of which i pay a higher percentage and poor people pay zero and use it to educate everybody which i won't take advantage of because my kids go to private schools. that's a good redistribution system. >> rose: why don't we do that. >> i don't know. >> rose: a lot of other a people believe unless people like you and others come

together we will not get our hands around income inequity and we cannot. >> we're very, you know ... look, it's okay a cliche that you know gee people in business like myself, we're big smoking big cigars -- it has a little bit of it. the fact of the matter is -- >> rose: problem solving. >> no, again i feel this very strongly. i think it's a shame that our education system is in the shape that it is. we started the conversation talking about energy. there are things that we can do. the point in politics make it very hard to legislate. i would like to see legislation done the blessing we've been handed, lower our energy costs and revitalize manufacturing of the jobs that come with manufacturing in this country. i would like to see that happen. i think that would help, that

would help. >> rose: are you doing everything that you know how to do to push those ideas forward? are you? >> of course, i am. right now i'm talking to. of course exactly. >> rose: i do think these are important questions i really do. i don't think we're getting our hands around them enough and we have to ask ourselves is this between rich and poor growing, growing and are we doing enough and in a sense to find ways through education and lots of other means so that so many people are not falling below the line. >> charlie we publish on that topic. i have one vote. i've been shrill on these policy issues. >> rose: do you think i'm being naive. >> come on, no, you're not naive. but i think it is a bit of you know cliche we must think because we're that capital markets and bankers must think in a certain way. i know you know it, we've worked

together on certain of these projects and you know where we are on these issues. it's a, it's a little bit of problem with our political democracy right now that we can't get certain things done. >> rose: to perform the tax structure. >> we can't pass tax legislation. how about immigration. how about immigration reform where people may want to come to this country because it's a beacon, people want to start their businesses, most talented people in the world want to start their business and create jobs and we can't do that. there's a lot of problems. i'm not blaming a single person. >> rose: nor am i. i'm just saying, are we doing enough is my point. the issue of immigration clearly, we can't get immigration reform. republicans don't want to talk bit right now because they don't want it to be a midterm issue because they want to talk about other things as they've effectively said so it won't be an issue in the midterm elections. >> i'm going to try to in the

interest of neutrality, i would say that there are people who don't want to talk about, to some people immigration is policing the borders and reuniting families. >> rose: it all to be both. >> right, exactly. one side wants to talk about one side the other side want to talk about the other. i think immigration can be done because do you know what we can actually do both. that's a rare movement. >> rose: we can allow people to have all the benefits of entrepreneurship and at the same time make sure that too many people are not falling in the cracks. >> absolutely. >> rose: education is one way but there are other ways. >> right. and so if you, getting back to your question and i don't want to get too far away, are we all doing enough. we can all do more. listen personally and getting back to the thing i tell you what we've spent a lot of time doing. we spent a lot of time investing and financing industries that otherwise might not get financed in order to create jobs and

great that circle where people do that. that's in our business life and personal lives. i'll tell you in my political life, i vote in favor of all these things that would make, that would lift people out of poverty or i try to. but it's a, you know, it's a problem. and it's, you know, it's hard to point the finger at any one thing without pointing it at everything. >> rose: motion pea -- most of the people i know and you're rare and i really do believe you're rare. but most people really want to see a better country. they differ on terms on how they want to see the country. >> everybody is right. you put a lie detector and everybody and they would say i'm only interested in the united states and people will say the opposite thing and they would all be true. politics starts in this country not when everybody's wrong or right it's when everybody's right as they see it as the context allows them to see it. my dad was a mailman and i grew

up in the projects. >> rose: replaced by a machine. >> yes, he was. well i once told you the story. the only time i visited my father at work, he was a mail sorting in the post office, and when he left they were replacing him with an automated mail sorter. what i thought was poignant they had that machine for ten years but they had a policy of not replacing anybody but only do it by attrition. so they could have put that machine in and yet they kept him in that seat doing something a machine could have done faster and better for ten more years. when he left they put the machine in his place. >> rose: did he work overnight because they gave a small percentage of premium. >> when you sorted the mail in those days and done by hand, obviously they collected the mail by night and delivered it by day. >> rose: your mother was a secretary for a security firm or burglary.

>> that was the virgin industry in my part of brooklyn was the burglar alarm industry. >> rose: you made it to the top of goldman sachs because why? >> well, you know there's a lot of, look, this goes to the heart of the other question which is why everybody should be sympathetic to when people aren't performing. i would say you know, yadda yadda i worked hard, i applied myself i did errands, i got paid and worked hard. but i got lucky. i went to a good firm. my firm didn't go bankrupt, it did well. i climbed up the ladder and people took an interest in me and it all worked out. you could be super smart and somebody won't take an interest in you and you could be super smart and someone takes an interest in you but in the industry it doesn't pan out. that's good but you have to be lucky too. people have to be reminded of that too because it makes you

impathetic of others. >> rose: are you attracting -- >> lloyd blankfein wasn't attractive to goldman sachs. they didn't hire me. i tried to get hired by goldman thanks but they wouldn't have me. i joined the firm that was acquired and i came in sideways. >> rose: i'm interested because this conversation, i mean you got to have some sense. you are sort of a sense of what it is that lloyd has had that's enabled him to sit astride one of the smartest and most admired companies yet critics belittle it as well. what was it that enabled lloyd to do this? what did lloyd no that perhaps others didn't know. you can't simply be lloyd worked harder. it was? >> i worked, look, i'll tell you all the good, i could tell you a

lot of good things about myself because i think a lot of good things about everybody else. we're all narcissistic in some ways. i'll tell you the good things about me, 10% of the world's population also has. there's also a matter of luck and if i weren't the lucky guy and it was some other lucky guy that person would be sitting here and you would be asking that person what's so special. the answer is it's not special. someone's going to be sitting here and it's lucky that's it me. >> rose: you think that. >> yes, i don't think i'm lucky -- >> rose: what about somebody sitting over here saying lloyd, yes, i hear you. you make your own luck. >> fine, i'm terrific. i'm telling you, you have to get over a certain threshold. you have to be smart enough, you have to be personable enough, you have to work hard enough. you have to be the kind of person that people root for as opposed to root against. you have to be all those things and more enough. but a lot of people get over those thresholds.

what makes you, look i could think of some people in life that god i wish i would have gotten next to that person andñr the loyal meantee of that person and not that person. there's a lot of luck in the world. people win the lottery when they're born. people win the lottery because they were born in the united states. now listen, i don't have modesty faults or otherwise. i work hard, i'm very proud. i'm also rational and necessary and i have to remind people of that. if you think, you run the risk of thinking that you deserve every good thing that ever happened to you. and if you think that, you might think that other people don't deserve what happened to them or deserve the bad results they v and i think some people do and some people are lazy but some people worked hard and it didn't go their way. or when they came of age there

was a war or they got drafted and they spent five years in the army and never caught up to themselves. a lot of things happened to a lot of people. >> rose: how long do you want to do this? >> this interview? [laughter] i could go on forever. >> rose: we could go on. no no no. how long do you want to be ceo of goldman sachs. >> you know, i don't, like right now and things are going well. and even doing this interview no kidding aside it's a lot of fun. i think about the influence i have with the people i get to meet and i say gosh i want to do this for a long time. when things are really really bad and i'm getting you know pressured and i see characters of myself in the newspaper i think to myself god, i don't really want to do this but my sense of responsibility requires me to go on. so when things are going well you love it. when things are going poorly you can't leave anyway. and so it's a very hard thing to get away from. >> rose: and you're optimistic about the future. >> also it's hard to get these positions. once you stop doing it, you

don't don't come back. what else am i going to do. >> rose: would you work in government in the public sector. >> i don't think people are clamoring to have me do that. but by some freak of reason, if i thought there was adeh good opportunity and i can make a difference and do something good, of course i would. >> rose: thank you for coming. >> well thanks for having me, charlie. >> rose: pleasure having you. >> my pleasure. >> rose: lloyd blankfein, ceo of goldman sachs. thank you for joining us. captioning sponsored by rose communications captioned by media access group at wgbh access.wgbh.org

man: it's like holy mother of comfort food.ion. kastner: throw it down. it's noodle crack. patel: you have to be ready for the heart attack on a platter. crowell: okay, i'm the bacon guy. man: oh, i just did a jig every time i dipped into it. man #2: it just completely blew my mind. woman: it felt like i had a mouthful of raw vegetables and dry dough. sbrocco: oh, please. i want the dessert first! [ laughs ] i told him he had to wait.