what was it like when you came here? did people make crocodile dundee jokes? people would say to me, "is it true all australians wrestle crocodiles?" i said, "well, not all of them." wall street ceos are thought to be people that throw things at the walls and scream and yell. i think if you're the seventh of 12 children, you don't wanna be the thrower. are you in favor of repealing dodd-frank? that's a terrifying thought actually to start again. what's gonna replace it? the world doesn't want the large banks to be unregulated. you've been the ceo for seven years or so. that's pretty long. what are you telling me, david? [audience laughing] woman: would you fix your tie, please? well, people wouldn't recognize me if my tie was fixed, but okay. [woman chuckles] just leave it this way. woman: and they-- all right. [♪] [rubenstein reading on-screen text]

rubenstein: i began to take on the life of being an interviewer, even though i have a day job running a private equity firm. [rubenstein continues reading on-screen text] james, thank you very much for doing this. honored to be here, david. now, you have an accent compared to me. maybe in australia, you don't have an accent. but you have an australian accent. i assume that's because you grew up in australia. it is. and it's also a measure of me being tone-deaf that after 30 years, i haven't been able to get rid of it. so i am an only child, so i don't know what it's like to be in a big family. but you were in a family of 11 children? we were 12, originally. twelve children. yeah. so, what was that like? two passed away, so we have 10. it was-- it was actually very noisy. um... you, i think, learnt a great deal of empathy for others because you're in an environment where

something was going bad every day in our household, and something was going good. what part of australia were you growing up in? melbourne. melbourne. so when your parents are producing new children regularly, did you ever ask them what was going on or...? i hadn't quite thought about it in that language. we didn't think of it as a production line. we more thought of, "here-- here's nicholas. wow. okay. isn't that great?" you know-- your father had a job where he could afford all those kids easily? no, he-- he was actually-- he was an engineer working for a large corporation, and ironically, he counseled me my whole life, "never work for big business. okay. you need to be independent, control your own firm," as he called it. and he set off-- he was an engineer. and he set up his own practice when he had seven children at the age of 37, with no income. and obviously was successful. he was not particularly financially motivated. he was very intellectually curious. and to him, education, reading, ideas, debate were the essence of what our family function around.

so you live here now, but do you go back and see your siblings? what do they think now that you're a famous person in the united states? do they look in awe of you? or they don't treat you any differently then when you were growing up? you mustn't know my siblings very well. heh. or australians for that matter. no. there is actually a cultural phenomenon in australia, which i think is a truism. it's called the tall poppy syndrome. in any field of poppies, there's always one or two flowers that grow above the-- and they sort of dis-- they disrupt the beauty of the field. and you chop them off to keep that-- and in australia, they equate the tall poppy syndrome as that if you're extremely successful, you have a higher burden to be more modest and to give back more. it's sort of a reverse psychology. my family is great. i am very close to my siblings. we always get together for dinner when i'm down there, and i have a terrific time. they've all been, i guess, successful in lots of different ways. one was a stand-up comic for a while.

one has been one of the top judges down there. they've all done different things and have fulfilling lives. and no, there's no awe, i can assure you that. so you went to-- it's like, "james, your turn to get the barbecue going," you know. so you were educated as a lawyer in australia, so you could've practiced law, i assume, there, but you chose to come to business school in the united states. why did you choose to not practice law, and come all the way to the states, and did you intend to stay here or did you think you were gonna go back? well, i practiced law for four years, actually, and i was not very good at it. i had two-- my two elder sisters were both lawyers and were both terrific. and-- i just-- i was more interested in being where the decisions are being made. and lawyers are-- you know, their job is to create the structure in which decisions can operate and can be processed well, to clean up after there've been problems, to document and help the negotiation of things, but they're not at the decision point. and for my career, i've always tried to get closer and closer to being the person

or part of a team that's making decisions. it's just a different-- everybody has different things which excite them. you're practicing law, presumably making some money. you gave that up to come to business school in new york at columbia? at columbia, yeah. columbia. and so, what was it like when you came here? did people make crocodile dundee jokes or about australia, or they didn't do that? [chuckles] they did, actually. they-- really? okay. and i was very lucky because i have a very ugly scar on my arm from when i played football, which i wasn't very good at, but i got a major scar from it, so i can pretend to be good. and people would say to me, "is it true all australians wrestle crocodiles? i said, "well, not all of them." and they'd-- of course, leads to the question about: "did you ever wrestle a--?" of course." all right. okay. "that's what we do," and i show them my scars. it was... okay. all right, you-- no, but, you know, i came to the states because, you know, seriously, it was... there was an advertisement at the time which i think i saw growing up in australia, but maybe i saw it in the u.s., which essentially said, "if you can make it here,

you can make it anywhere." and the concept that this was the land that if you came to-- you worked really hard-- i borrowed 24 percent interest to come here. paid for all my student loans. you worked really hard, and you could be successful here. there was a path forward. and i was fortunate to get the student visas and then a green card, and ultimately citizenship, which i took 12 years ago, and i felt this-- you know, the welcoming nature of the u.s. economy and the people, and willingness to accept people who are prepared to have a go here, i thought was just wonderful. you graduated from business school and then went to work for mckinsey, is that right? that's right. yeah. so you wanted to be a consultant? yeah. or at least you joined a consulting firm. and what was that like? it was great. it was sort of one step closer to where business decisions get done. you're working with management teams. you're helping companies, you know, figure out their strategy, you're helping improve their operations. it was like going to business school for real every day.

it was fant-- and you get paid to do it. i couldn't believe my good luck. so you then went-- after a few years, you were recruited by one of your clients. sounds like i couldn't keep a job here. well... this is not going so well. well, they recruited you. merrill lynch recruited you. yeah. dave komansky all right. so dave komansky said: "you were so good as a consultant, come in and actually do the job here." and what was your job at merrill lynch? first job was to run marketing, and then it was to run the sales organization for the brokerage business. you were doing that, and then somebody calls you from morgan stanley and says: "you're doing great at merrill lynch, why don't you do an even better job and come over here?" is that how it happened? well, they had a business that they needed fixing, and i had some expertise in that business. actually it was a very struggling business at the time. it was the old wealth management business. and john mack called me when he got recruited back to morgan stanley in 2005, i think, and asked me to be part of the team, which i thought was a very exciting challenge. so i did that. so when you came over to run the wealth management business, did you ever think you'd be the ceo

of something like morgan stanley? i did not. i told john actually when he was interviewing me for the job, i said, you know, "we can fix this business. i'm pretty confident about that." i knew a lot of people in the market. i felt-- and modestly, i understood what the issues were and i felt we could fix it. but i said, "we'll only fix it to a certain level and then you'll have a very important decision to make, and that's probably two years from now. that decision is do you double the business, because this is a business that has scale economics and you need to double it, or sell it to somebody else who's gonna double theirs? there was an inevitability about this outcome. and i said, "at that point, i'll leave." i didn't have any anticipation of being there longer than two years. rubenstein: you didn't think you would go back to australia? no. but i also didn't think we'd have a financial crisis. right. australians seem like they're relatively even-keeled, and consultants are relatively even-keeled, so you seem to be-- from my knowledge of you, a relatively even-keeled guy, but wall street ceos are thought to be people that throw things at the walls, and scream, and yell, and slam phones down.

so is that image wrong? [chuckles] or you just sort of succeeded though you're relatively low-key or do you throw things as well? [audience laughs] [chuckles] i mean, you seem really modest and controlled in your personality. aren't you used to ceos that are throwing things? well, i think if you're the seventh of 12 children, you don't wanna be the thrower. okay. you know. that's not gonna end so well. no, i think part of it is, honestly, just personality, and that probably helps shape you. your personal-- family obviously does. but i think these businesses have been on a 30-year transition from very tightly-held private partnerships, where frankly, you know, more extreme personal behavior, taking more risk because it's your own money, et cetera, et cetera, was par for the course. versus now, these are big global corporations. you know, we're relatively small among the big banks here. and we're-- we've got a $2 trillion of clients' assets,

we have $1 trillion balance sheet, we have 55,000 employees all over the world. these are major global corporations. they've gotta behave and act like major global corporations. i don't see jeff m. welch-- okay. --or ginni rometty or any of those executives behaving the way, you know, maybe the historical caricature of a wall street would have. the world for people who are running wall street firms seems to be pretty good in the sense that wall street profits are high, therefore, our expectation is so high, things are inevitably gonna go down. if you believe that the u.s. economy has turned, which i do, and the federal reserve apparently concurs, and if you believe that we are destined for economic growth, more like 3 percent than 1.5 percent, particularly with unemployment where it is, and if you believe that some of the policies the new administration is talking about on the economic front come through, with little trade disruption, then it's not a total surprise that markets reflect that. and financial service firms typically...

as global economies recover the financial services firms or in the industry that recovers first, and within that sector, securities and brokers tend to be the fastest recoverers within that sector. so where we are is not a surprise. what will be interesting is now what happens sort of after this flash of exuberance, if you will. it was-- the conventional wisdom, which is often wrong, but the conventional wisdom was that before the last election, probably u.s. was gonna slow down in 2017 and maybe head into a-- not a recession, something, very low growth. now that seems to be pushed down the road a bit. so you agree that it's unlikely we'll have a recession in this year? yeah, i was-- definitely. i was not part of that co-- if that was the conventional wisdom, i was unconventional. i thought-- if you've got the largest economy in the world, it's nearly an $18 trillion economy, growing more like 3 percent than 2 percent, which, again, is the direction we're heading. you have the second-largest economy of-- well, china, which is still growing at around 6 percent.

and economically in europe, with growth around 1.5 percent. the world is in a period of recovery. and i just think that the... those who thought we were facing an imminent recession were not taking into account the fundamentals. just the-- the economic driver in the world is the u.s. economy. you're the ceo of one of the best-known wall street firms in the country, in the world, so why do you think the image of wall street firms is not so great in the country? well, first, i have to say coming into this room, i got a round of applause, which i appreciate. okay. [audience laughs] because i will go anywhere for a round of applause these days. you know, it's-- it-- the facts are that, um... absent the great depression, the great recession that we all went through, wall street had a large part to do with it, if not the major part to do with it. and a lot of the synthetic-type products that were created that gave rise to putting a level of risk

in the financial system that turned out to be systemic risk, that led to massive failures of institutions, which led to the taxpayers having to bail out the remaining institutions, it's not surprising that the public and the taxpayer would have such a negative reaction to those who caused this to happen. now, it's, you know, seven, eight years later, why is the image not better? it's hard to love money unless you have it, you know. it's kind of-- all right. being attracted to wall street as a concept is not something most people just naturally gravitate to. folks gravitate to new technologies. they gravitate to consumer services that obviously palpably make their lives better. they gravitate towards entertainment. you gravitate towards the things that you can viscerally feel and touch. the flow of capital is not one of those things. so in many folks' minds, it gets back to, "where does it causes problems?" and what we haven't done as a good job of, as i said, is really articulating why capital is what takes these incredibly innovative little companies

that once were-- as they once were, like a facebook, like an apple, like a google, and creates capital to let them grow and become these incredible success stories. are you in favor, as some people in the wall street community seem to be of repealing dodd-frank, or are you actually tolerating it and you can live with it? i-- i would not repeal it. i think-- i think that would be a mistake. you know, there's been... we-- we have redesigned the way in which large financial institutions in this country function. how they are capitalized, the liquidity they hold, the leverage they operate under, the way that they're managed, the way that they're overseen by the federal reserve and other agencies, and what happens to them if they get into trouble. that has been a multi-year process. certain elements have definitely gone too far, but the essence of that structure, i think has been absolutely critical,

and that is the reason the u.s. financial system is so much better shape than almost anywhere in the world. now, are there pieces of dodd-frank that i clearly feel went too far, have unintended consequences, are disruptive to market liquidity? there's no question about that. but i would not start again. that's a terrifying thought, actually, to start again. what's gonna replace it? the world doesn't want the large banks to be unregulated. did you know donald trump before he was president of the united states? i had-- i think i'd met him once, and i spoke to him about a transaction one time. so very little contact. you never turned him down for a deal, i assume? i-- i did not, personally, no. okay. and have you seen him since he's been president? no, i have not. and do you have any advice you would like to give him about what he should do, or you would say he's doing enough right now? doesn't need advice from you. he's got a pretty large team of advisers and a lot more people who wanna be advisers. so i don't think the shortage of advisers is the problem.

um... [audience laughs] heh. i think, um... you know-- somebody once said to me, the office of the president of the united states is... you know, it consumes people. and they've got a very bold agenda, but at the same time, the world is not staying static. you know, we have enormous geopolitical uncertainty. you have issues around north korea right now, iran, the immigration crisis in syria. there are a lot of pockets of the world that could easily engulf and consume the time of the president. so i think it's critical that they be very focused on a small number of achievable goals, and that the team is very coordinated, deliberate, and cooperative in working to get those done. now, the strategy that you have employed as ceo, and since you've been ceo i think the market capitalization is up about 110 percent, so i hope you get a big bonus for that. thank you. rubenstein: but your strategy has been to kind of de-risk the firm a bit and to go into wealth management

a little bit more than was before. what was the reasoning behind that strategy? the analogy i used is an aircraft carrier. and the wealth management business is incredibly stable. in really bad markets, it might be down in revenues 10 percent. now, in really good markets, it might be up in revenues 15. it's not-- it's never going to-- the day the wealth management business blows through the roof is the day you should be scared. all right. you want it stable. so we got the ballast from that with the speed in the engine room from all the capital markets businesses. and i thought, and the board thought, that that mix, and john mack also was part of this, obviously, that mix was an incredibly powerful thing to present to investors and to clients. if i wanna have my money managed by, let's say, morgan stanley, what kind of rate of return should i get? let's say i give you x dollars, what should i tell your money management people that i want and be reasonably happy to get? well, it depends who you are. if you're david rubenstein,

and, you know, you've got a lot of your money tied up in carlyle and in all your funds, very illiquid, very long-term trapped that you don't wanna take out, then you're probably gonna be very conservative with that which you put into the markets. i would think prudently. you're not buying the hottest stocks. that's not what you do. you've got your risk already in your business. if you've got $35,000 to invest, i would say you should buy an s&p index fund and sit on it and never look at it again, and wait until you actually need it for your retirement. who manages your money? [audience laughs] i have a wonderful financial adviser. at morgan stanley? at morgan stanley. okay. and she does a terrific job. so does she call you up and she's worried that if she doesn't do a good job for you, she might lose her job? [audience laughing] worried about that? she is a professional. she treats me like all of her... she's not worried. hopefully like all of her clients. i probably get a little bit of extra care and attention, i suspect, but...

no. they're a professional team. they do what they should do. they do a quarterly report. we sit down with my wife every year, do an annual review of our total financial situation, and we adjust accordingly. what's the greatest pleasure of being the ceo of morgan stanley? do you--? when you go to a restaurant, do you get people to give you your seat right away? do you have, you know, people give you tickets to all the events you wanna go to? get tickets to hamilton easily? i saw hamilton recently for the first time, and... wow. that was just-- you have trouble getting tickets? i assume not. of course. of course. right. no. no, the greatest pleasure for me is... and this is gonna sound hokey, but it's true, we had-- our firm has been around for a little over 80 years. for about 65 to 70 years, we were pretty... we had very few issues. i mean, you had your normal sort of growth pains, if you will. and then we had a period of about a decade where we tried to become a firm we weren't. which was doing a lot of prop trading,

participating in markets just for our benefit. there was no obvious client on the other side of it. it was just-- a lot of firms do that. hedge funds do that, obviously. a lot of firms do that, but we-- that wasn't what was our core dna. and what we've done in the last few years is try and restore morgan stanley back to its core dna, which is all about serving our clients. so today, how do you spend your time? how--? what percentage of your time do you spend meeting clients or prospective clients? is that 10 percent, 15 percent? gorman: no, it's more-- and it changes. you know, i think each year-- i don't think. each year i sit down and write the 10 things that i wanna get done that year. and in the early years in the job, they were very much problem issues. we owned a half-built-- i don't know if you remember, but we owned a half-built casino in atlantic city. we-- we wrote that off. a lot of things that needed to get resolved. happily, as time has gone on, they're resolved, and i'm spending much, much more time on client activity. a much larger part of the job now

is trying to help our teams do what we're supposed to do, why we come to work every day, help our clients. what about employees? how much time do you spend rallying the troops? gorman: as much as-- in fact, tonight, we have our new managing director dinner, which we have all of our 142 new managing directors this year and their spouses and partners. and i will be speaking to them right after this. so i try every day to try and do something that connects to a group of employees. whether it's summer interns or senior managing directors. you travel roughly what percentage of your time? i don't know, probably a third. a third. now, you've been the ceo since 2010. so in the lifespan of wall street ceos, seven years or so, that's pretty long. what you telling me, david? well... but you're a young person. my number's up? so when you eventually decide that you might wanna do something else, have you ever thought about what you might wanna do? you know, i think we all have sort of fantasies of what we'd like to do, and then reality steps in and says: "actually, what are you any good at?"

and i think you've gotta be-- it's fun to dream, but you've gotta be true to what your real skills are. and, you know, i'd certainly like to teach, and i'd like to spend more time... i was more involved philanthropically than i've been the last several years. because i just haven't had the time. more time doing that. but probably teaching, investing. okay. you know, learn at the feet of the great, like david here. but, you know, it's a big world. lots to-- i wanna spend more time in australia. so you were very low-key as-- by wall street standards, i think, so you told me a story recently that you came back the other day, and you went out to pick up some pizza. now, when you're the ceo of morgan stanley, can't you get somebody to deliver the pizza to you, or...? how come you have to go pick it up yourself? no. you know, you-- i don't regard the ceo thing as defining you as a person. i think it's, you know... we-- everybody is different, but you have to be able to--

once you're not ceo, for that not to materially affect how you are as a person. and that-- and a lot of people it does. i've seen it over, you know, many years. not everybody. our life is very simple. we keep a very, you know, balanced, sort of down-home kind of life. i mean, we-- obviously, we live well, but you don't-- you can't define-- the job should not define you. your job is you're ceo for a point in time. you're-- you're helping drive the vessel and you'll get off it, and hopefully it does better after you're gone. the young people who come in today, are they really interested in careers in wall street. or do they just wanna make some good money for a few years? gorman: i think they're-- you know, a thousand people, you probably get a whole bunch of different groups. all of them are exploring. i think if you're 22 and you know what you're gonna do, you know, you're a way-- you're a different person from what i was at 22. so most are in some state of exploration. but i started something, i'll tell you, with our summer interns a couple of years ago. and i speak to this group

at some point during the summer, near-- when they start. and i said, "why don't you come up to my office?" and i get to ask them exactly these questions. "why are you here? and if you're telling me it's because you wanted money to help pay off student loans? i get that. but hopefully it's more than that." and they're very internally motivated about careers in finance. not everybody is. but these kids are, and it's very refreshing. looking at the world today, if you were starting your career all over again, would you go into finance knowing what you now know? yep. when i was in law school i had three jobs. this is a true story, and... one of them was... i worked in a sheet metal factory, melding sheet metal together, which is incredibly difficult. the second was i was the toilet cleaner at my college, which was an all-male college, which was an incredibly difficult job. [audience laughs] and the third was working on saturdays at the local brokerage firm called product partners,

which is now owned by a global firm, helping match trades that had not been matched during the week, so the loose-end trades. and i loved the business. and the first shares i bought were oil exploration options, which is about as far in the risk-- but i was, you know-- did you make money on it? yeah. but i was 19 years old. why not make some risks, right? there's-- you have no responsibility. i love the business, the markets. i love the business, and i love working with ceos and clients, and trying to get good financial transactions done. you have children. are they in the financial markets? no. no, they're not. one-- one is working in d.c., uh, in a consulting business, and one is... one is still in college, and she is an artist, a musician, very creative. so when you became the ceo of morgan stanley, did they treat you differently? they-- more respect than before, or no? not really, no. rubenstein: no. heh. you know. no. you know, we're very grounded. the kids-- the kids are great. and i spent a lot of time with them, going through the sat tests

and visiting colleges and all that sort of stuff, and... no, i think, you know, they're-- you know, first and foremost, you're dad, and you wanna be as normal a dad as you can, and hopefully some of the trappings of office and the stuff around it, you've gotta keep that away from your family. your family is your family. so they don't say, "my dad is the ceo of morgan stanley." they don't tell people that? i don't think so. no. they're-- you know, they're trying to build their own lives, and you know, like all of us, we want for our kids to have the right level of independence, but know you're there to support and love them, whatever happens. [♪] you're watching pbs

in the popular imagination, -tango is an exotic seduction,a. born on the sultry streets of buenos aires. in truth it's a complex improvised form, danced the world over. - the passionate elements are very easily read from the outside. i think that what's happening inside the dance can be much more than that. - [jim] jesse krimes describes his six years in federal prison as a kind of arts residency. not only did his work keep him sane while on the inside, it's become the foundation for a successful artistic career on the outside. - they can take your clothes, your car, they can remove you from your family, but they can't take away your ability to create. - [jim] and the celebrated opera tenor, stephen costello, has been both blessed and betrayed by his voice. - you don't realize that you hold your emotions here. when you're stressed you don't realize that you're singing through the stress, and you're trying to overcome it.