welcome to our program, tonight dr. jim yong kim,president of dartmouth college. >> we have kind of lived in a world in which we thought that we do great sciencend put great science and great technology in the hands of trustworthy individuals you are done, the rest of the system will take care of itself, when, in fact, taking great technology and making sure that you deliver it to the people and you do things like prevention you help people be healthierverall, that is one of the most complicated tasks that we can imagine, and we haven't taken it seriously. not a single medical school i know of teaches about that delivery piece, everything from how you organize a hospital to how you enre that prention and public health is part of what you do fro the hospital

setting, these things are not studied and taught. >> rose: and question friday stacks of columbia university, the author of the price of civilization, reia wake thing american virtue and prosperity. >> my favorite examples are in scandinavia, sweden, denmark, norway, they are all high tech economies and all have much lower unemployment rates and balanced budgets or surpluses. >> essentially welfare states and a kind of social democracy as we tend to know it? >> yes, they are. >> the kind of democracy, social democracy that conservatives will look at and say that is europe and we don't want to be europe. >> except that they work much better than the u.s. >> tell me why. >> they work better because they invested in skills and science technology infrastructure, energy systems, they did all their homework, they said we are not going to take a pass on all those investments for the future, that make us competitive, we are going to get in there and compete, we are ing to stay high tech, we are going to stay in the manufacturing sector, we are going to have champions like ericks and other companies

that are cutting edge technologies, able to compete internationally, ty did their homework and didn't go with budget deficits and didn't go with keysian stimus and pay our way and tax ourself because that is the price of civilization. dr. kim and dr. sachs when we continue. >> funng for charlie rose was provided by the following. >> every story needs a hero we can all root for. who beats the odds, who comes

out on top but this isn't just a hollywood storyline, it i happing every day al across america. every time a storefront opens, or the midnight oil is burned. or when someone chase as dream, not just a dollar. they are small business owners, so if you want to root for a al ho, support small business, shop small. >> ros addional funding provided bthese nders. captioning sponsored by rose communition from our studios in new york city, this is charlie rose. >> rose: dr. jim wrong kim is here, 2009 he took office as 17th president of dartmouth college, he is a cofounder of

partners and in health in the department o hiv aids in the world health organization trained as both a physician and anthropologist he spent much of his career providin medical treatment to underserved populations worldwide. next tuesday i will be visiting dartmouth college to moderate the washington post, bloomberg debate among the republican presidential candidates, i am pleased to have ji jim yong kimt this table. force fort. >> thank you verymuch. >> wlook forward to being at dartmouth, your campus. >> we are thrilled, very exciting event, and a very important time in the campaign. >> re: every four years we all go to new hampshire. >> yes, sir, and dartmouth played a role in this as well. >> right we have the democratic debate. >> rose: and did a thing before. and tell me how you ended up there. >> well, you know, i had no plans of right to be a president of a place like dartmouth coege. i was, along th paul and my

other colleagu working on trying to solve problems like tuberculosisnd they said look at this job and a great mentor of mine -- >> who is they. >> the search committee, and i thout, well, you know, why would they ever want me? but then the mentor of mine said when an important person comes along and an important job comes along you should go just to help them think what they really want, they wouldn't want me but help them think about what they really want. but i read something about dartmouth college that really caught my eye. therwas a famous president of dartmouth college that started in 1945 who had been working in fdr's cabinet an he was the head of public relations for the state department, in august of mean 45, when they dpped nuclear weapons on nagasaki and hiroshima i want you to know two hinges, the world's troubles are your troubles an second there is nothing wrong with the world that a human being can't fix. >> so he is in a sense a role model for you.

>> he is. when internationalism was not very popular, but, you know, people like thurgood marshall wento dartmouth 15 times to talk to the student, martin luther king was there and really tried to bring this outward looking perspective, and so i didn't know this,but this has been a part of the dna of dartmouth college for a long time. >> you were the first asian american to be the head of an ivy league college. >> yes, sir, and, you know, i didn't think much of it when the news came out, but boy in korea and even in japan and chinahey kind of went crazy, it was a source of gat pride, escially for korea, and, you know, there haven't been very many people of color, as we say, in these private jobs, you know, ruth simmons was at brown. >> rose: i saw her last night, in fact, she just retired as you well kw but staying at brown to teach, because, you know, she believes in having been there she believes in the university although she had been at princeton and other places. >> he is a great mentor to me and has been a wonderful guide, in fact, taking on this job.

but i still don't think much of it. i think the dartmouth alums were really sizing me up, not on the basis of me being asian american but whether i understood the character, the depth and the traditions of dartmouth s i took that on right away, i thought wow this is really extraordinary. >> rose: is there a difference in the culture at dartmouth than there is at take your pick. >> well i went to brown, and i was at harvard for a long time and those are great institutions, but the dep of feeling for the place, and maybe it is the studying the beautiful north woods, the setting, but i think there is just something very special that dartmouth alums feel for their alma mater. >> rose: you received a macarthur genius award. for what? >> it was for the work that we did in drug resistant tuberculosis of all things, we tackled a problem that was said on the intractable you can't

possibly treat that in developing countries and we did and we were success, and we lowered drug prices, we got the policy change at the world health organization, and so all of those things together led them to give me the prize, very unexpected. >> you are great friends of paul farmer. >> we worked together a an still worked together for 30 years now. >> what is the great challenge today of global health. >> you know, it is the challenge that everyone faces right now, in the -- with the great economic problems, we are seeing a lack of interest in a waning of interest and a waning of investment, but i think -- >> investment by -- >> by the donor countries. >> rose: foundations or nations? >> it is mostly -- it is both, but, you know, the one foundation tha has not backed off and continues to do just extraordinary work is the bill and melinda gates foundation. >> rose: they make global health one of their missions. >> definitely mo of the money comes from donor countries. and the donor countries all are feelinthe pinch, of course, and so we are seeing, you know,

we just heard about a dramatic cut in funding for the u.s. agency for international development but it is not just -- >> and some have argued that will, in fact, have a negative impact on america's influence in the world. >> that'right. and that's what we ar hearing, you know, the current director of the administrator, a friend of mine, robert saw he is brilliant and if anyone can make things happen it is raj but it is a tough job, especially if you are cutting back, let me say the challenge in noble health is the same challenge in some ways, i think in profound ways, that we have in the american healthcare system, right now, in many parts of the world, there is much more money than there used to be before, but the problem is, that our ability to actually organize ourselves and deliver those things that we already have, vaccines, basic drugs, it is just not where it should be. and so one of the things that we are working on at dartmouth college is to bring together the field of global health, with our

intense concern right now for healthcare delivery, so we started something called -- >> rose: but do you take the existing tools you have and make sure they are there and used or do you take the same amount of money and try to find a better, more miraculous drug? >> right. well, they have certainly chose ten latter. >> rose: exactly. >> and we are so grateful for them for having done that but the issue now is, if you have a lot of new products, a lot of new vaccines, an you put them on top of the old vaccines that aren't being delivered anyway those new vaccines are not goi to miraculously -- >> rose: you have to have a delivery stem. >> you have to do both because the gates foundation has taken on so much of this the rest of us have to take seriously the messy, complicated but critically important task of figuring out how to organize ourselves so we can actually deliver those things. because it is exactly the problem we are pacing in the american healthcare system, we feel that the intensity of interest in lowering costs and rofg quality of the american

healthcare system can help us take those 11 and apply them all over the world. we also think that there are examples in developing countries the art and die hospital is one of the best hospital ms. the world, and they do very high quality cataract surgery for about 1,000th of the cost that we spend in the united states, there are 11 there and we think that we in the universitiesing in the great institutions of higher education have to tack this will problem. >> rose: can you enlist the private sector? which has certain kinds of resources to be involved in the delivery of med nine. >> sure. you know, if you. >> rose: i am thinking of africa a coca-cola, without knowing the extent they do but they have delivery trucks that go everywhere. >> so when we talk about the science of healthcare delivery, we are really trying to push ourselves to move beyond simple

ideological statements like governments have to do it, no the press has to do it, in every country of the world there is gog to be some mix of government and the private sector, when you look at china, as a world health organization official i went there a few years after the sars crisis and asked what wasoing on there and what they said was, well the market was working so well in so many other areas that we completely market tied our healthcare system, every hospital had to generate its own fees and almost took apart a really well developed public health system they developed over many years, so what they learn was, the right mix is government intervention, good policy, some attention involvement of the market and the private sector but then we argoing to have to get that rating with each problem and with each province, that is really the answer. is that in each setting they are going to be places where the market, market forces and private sector can play a large role but in haiti rightnow, for example,

not really much of a private sector so it is really going to be governments and other institutions coming in to try to solve that problem. the most importa thing is we have to be rigorous and scientific about the right mix as opposed to being ideological which you hear too much right now, it is all about aid or all about the private sector, it some combination. rose: balance. >>s it is some combination and it is a very complicated and important topic to take on scientifically. >> so if you look at global health today, the five biggest ise are, i would assume hiv aids remains one. >> sure. >> i assume malaria is probably still one. >> sure. >> rose: what else? >> well, the infectious diseases, hiv, tb, malaria, but the myth is if you tackle the infectious disease use are done, what we are realizing is that chronic conditions like heart disease, diabetes are also major problems,. >> rose: it has to do with nutrition and everything else. >> oh, sure and smock smoking there is a lot of cigarette smoking. >> rose:s that.

>> public knowledge, information, the sugary foods have penrated everywhere. so i would say. >> rose: sadly. >> you can list sort of the top, you know, five things that kill people, but the real issue is developing functioning healthcare systems everywhere. what we know from places like rwanda for little money you can build pretty darn good healthcare systems so we just need to find out how that can be done and then scale that in other countries. but scaling it to other countries is the whole ball game, if we learn how to do that, we wl learn how to do a lot of things. >> rose: so what is the magic of what they did in rwanda? >> well, you know, in the work that i know it is that they started with a focus on building a functioning primary healthcare system that would then allow it to tackle problems like hiv, tb, malariand even chronic diseases as opposed to coming in and focusing on an individual disease program they are trying to built a whole system. we focused on hiv and very

involved in that andhe reason we focused on hiv is because this is going to be what we called our trojan horse, you know, president bush did something really extraordinary in giving us this opportunity to fight hiv but it is a chronic disease and wenew if we could get the world interested in hiv they would commit to treating people for the rest of their lives, that was the opening for us, to then begin talking about building the systems we need. >> rose:. >> ros so what was your mission? what did you say, i spent part of my life doing this, it has given me all kinds of core competencies? .. >> sure. >> what is it i have to do here, what is it i have to learn and what do i have to accomplish? you know, the jobs like mine, all of the presence of the so-called ivy league institutions, we are running major enterprises, and ours is close to a billion dlars, you know, harvard, yale, princeton are even larger so you have to really learn how to get a complex organization to

accomplish things it wouldn't otherwise do. >> how do you do that? and, you ow, for me, it was two things, for one, i went back to something i know, with i have anthropology, i did aable, i continuedto do -what are people's concerns? what is the culture like here? how does it work in and also you have to bring in expertise from the outside, so we had people, for example, from deloitte and touch who helped us understand how we were doing. >> the accounting firm. >> it is actually -- >> a consulting firm. >> it is a consulting firm and helped us understand the business a lot better .. but it is great to be committed to a social goal, i have always been committed to healthcare and now the bulk of my work is a commitment to education as a social goal. what i learned, though, is if you are really committed to the social goal of educating these bright young people, creating an enviroent, where our brliant professors can do the research they really need to do, if you are really committed to that social goal you are going to get really serious about how a place

actually runs, things like procurement and supply. i mean, things that seem communicatndaneand immerial to , it is actually critical, and we learned that from haiti, we knew we had to manage our enter rise very carefully, because every pen my that we didn't waste on our enterprise we got to put into patient care, and if i try to bring that with me to dartmouth, it is a, but it is a much bigger operation so i had to learn to scale mylf. >> how worried are you about the idea that where the kind of nancial problems weave, with the deficit and dt that looks huge -- >> yes. >> -- and is huge, somehow our focus on science and research and investment will be shortchanged? >> i am very concerned about it. i am really, really, concern about it. i think we spend more on research than any other country in the world, of course. but frankly, the rest of the world depends on us to do that. i think that it would be

extremely shortsighted to start pulling back on things like the national institute of health and the national endowment for the humanities, those organizations that provide the fuel for our great institutions of higher education to make those new discoveries, this is really shortsighted. we must, even in the minimums mist of terrible economic times i think every single one of us in higher education say that it would be crazy for us to stop investing in these institutions which are jewels, i mean, with so many of the top institutions in the world are american institutions, and it is not -- >> rose: their work is our future. >> absolutely, absolutely. and we he are the ones who are working on the discoveries that will really shape the future. >> rose: the future is being pushed forward in places like silicon valley. >> yes. >> in places like the military. >> sure. >> rose: and in our great universities. all of those places who make it their business, in a sense, to understand and know the future, d contribute to the

transformation t to the future. >> right. and the expected and they are trying to learn from it, so i am on a committee that is trying remake -- university and they send a group of people to dartmoh college because they want to learn how to do liberal arts education, because they are very straightforward about it, they say, you know, the people that we train through our very narrow focus tech local cal, technological programs are pretty food and the physicians is just a six-year program where all they learn is science and they said we find that our people just aren't as creative as they need to be .. if we are going to compete in the world economy, so they are taking the greatest institution in korea and going to build a big chunk to focus on liberal arts education. >> rose: liberal arts education creates creativity? >> absolutely, you have to -- the opportunity of sitting in a class and learning philosoy or literature or topics that previously in korea had been thought of not part of the path

we need to go through to be good at making products, they now clearly ha gotten religion on this and so the people who are coming first to dartmouth aren't the engineering school and the medical schoolthe people who are cong first to dartmouth to look at what we do are the people who are if the humanities and the social sciences. >> rose: t united states is in terms of e amount of money it spends on healthcare, numb one, spends more than anybody else. >> right. >> rose: in terms of the measurement of the quality of that care, it is 40 or 41st. >> not quite that low but first. >> rose: where? >> in the 20s and you will hear different things from different people. >> rose: the so why is that? what is the difference for us? >> so just to put a fine point on it, we probably spend about half of what the entire world spends on h healthcare in the united states. we spend more on healthcare than all of the other ocd companies combined. >> rose: about 810 percent of

gdp. >> about 2.3, 2.4 trillion right about now but the estimation it is going to go 4.4 trillion by 2018 this so this is the spending cur that everyone says is unsustainablbut here is the beauty in the fact that there is that pressure, what i said before is, you know, we have kind of lived in a world in which we thought that if we do great science and put great science and great technology in the hands of trustworthy individuals you are done, the rest of the system will take care of itself. when, in fact, taking great technology and making sure that you deliver it to the people and also you do things like prevention, you help people be healthier overall, that is one of the most complicated tasks that we can imagine, and we haven't taken it seriously. not a single medical schoothat i know of teaches about that delivery pce, everything from how you organize a hospital to how you ensure that prevention and public health is part of what you do from the hospital

setting, these things are not studied and taught. we need to do that, and i think that the pressure of this increasing cost is going to help us to launch this field., you know,, one thing band difficult who has been on the show says it is crazy that we have a national institute of health but that we have never had a natial institute for healthcare delivery. that is what we need to do right now, to bring down costs, increase quality, but also to keep our people healthier, we know we can do that. >> rose: didn't you get like a $35 million grant to create a kind of healthcare delivery initiative? >> weid, we created the first ever center for healthcare delivery science and it is a combination of a business school, the engineerg school, the faculty of arts and sciences and the medical school, and what is interesting is all of these people who have tremendous amounts to contribute, to the healthcare debate have never been speaking to each other. so it is one of the things you can do i president is create a center and actually make people come together to talk to each other, and the conversations

have been just pass make to watch. >> rose: i am going to be at your campus and i am going to be asking questions of people who want tbe president of the united states. what questions wld you like to see em address? >> well, you know, of course this is going to be about the economy. >> rose: right. >> and we certainly would like to hear any bright ideas about how to talk about the ideas of job creation and deficit reduction, but, you know,. >> rose: investment. >> i would love you to as them about how they think about healthcare and here is what i mean by it. i would love to see a presidential candidate or a president who really understands how critical healthcare is, and how the current approach is not going to solve the problem, unfortunately, i think what is needed is an effort equivalent to what president mixon did in starting the war on cancer, what president bush did in his emergency plan for aids relief. there has to be presidential

leadership in really tackling the problem of cost and quality in healthcare we haven't had it yet, we had it for access. >> rose: access with healthcare reform. >> healthcare reform gave us access, it is so complicate and so big it is goingto require presidential leadership and i would love to see how they are going to provide that. >> rose: thank you for coming. >> thank you very much. >> rose: pleasure having y here. jeffrey sachs is here, he ia professor at columbia university and direor of the earth stiefns ought and special advisor to the u.n. advisor on. >> wrote on topicsof climate change to world economy the latest boo focuses on the economy, reia wang thing american virtue and prosperity. herote it dedicated to his parents and he says in the first pagraph, at e root of america's economic crisis lies a moral crisis the decline of civic virtue among america's political and economic elite, a

society, a market, laws and elections is not must havive rich and powerful fail to behave with respect, honesty and compassion towards the rest of society and towards the world. america has developed the world's most competitive marke society but squandered its civic virtue along the way without restoring and ethos of social responsibility there can be no meaningful and sustained economic recovery. and then he says, i find myself deeply surprised and unnerved to have to write this book. i am pleased to have jeffrey sachs back at this table. >> thank you, charlie. >> i love where the title comes from, from oliver wendell holmes who said. >> he says paying taxes is the price of civilization. and he was pleased to pay his xes, and what a different attitude we have today, especially among aot of the most powerful. >> and how did we come to that? >> i think that began in the political system to see the demonizaon of taxation in the

1980s, i think ronald reagan naturally started this, the campaign, he can campaigned that cutting the top tax rate was the solution to the economy, what was once called supply-side economics and it was called by george bush senior voodoo economics, took over the republican party and i would say about half of the democratic party, in fact. >> rose: is there an argument to be made that cutting, reducing taxes will stimulate economic growth, because people will take that money and invest it in things and create bs and make products and create demand for more product? >> i think at this point a basic truth in american society is we do not collect enough tax revenues as a share of our national mcto have a civilized nation, we can't achieve the objectives as a country that we want with the tax system that we have. >> rose: and those people who say jeffrey, you are wrong, if you just turn the free enterprise systemloose, it will do all of that that you want it

do. will create the kind of civilized society you want. >> it will not haveublic schools thatteach our children, it wil t bui the roads and the infrastructure that our economy depends on, it will not develop the science and technology that has led the u.s. to be the rl leader -- >> rose: mning it is too g for the private sector to take on. >> some things the private sector won't take on because, inherently, the private sector can't be a competitive enge in those sectors when we need to build a highway system between two points, we don't want ten highways competing with eac other tween city a and city b we have a highway to build that's why a over the world, including in the united states, government has built to the highway system. >> rose: is government -- >> when we have basic science to research whether it is to keep us alive or help grow more food or take on environmental challenges we don't patent basic

science and don't patent the great discoveries of giant tests, they don't earn an income from that the way they get supported throughout history is by patronage of government, it used to be the kings, queens, sometimes the popes, now in modern times it is the national science foundation. it is the natnal institutes of health, and these are the ways that we make progress. these basic points, used to be understood over the broad consensus of our society but in reinyears government was demonized, the republican party put it blunt eli, had one message, one note only which is cut government so that we can also cut taxes. and we have lost sense of the most basic point th markets can do certain things, but markets can't do other things. >> rose: have we gotten ourselves in such a bad situation, though that we have a at the time and a deficit that

is so overwhelming that unless we make sacrifices now in terms of what government can do we will never get control of the economy again? >> no. where we have gotten ourself in a situation is where the revenues that our government collects are by far the smallest of any high income democracy in the world, we simply stopped collecting xes. this year, it is about 15 percent of gnp on the federal level, another ten percent on the state and local level, maybe 25 the, 27 percent of gmp in the, gmp in the highly successful countries of scandinaa for example it is 20 percentage points more than that, perhaps other countries five, ten, 15 percent higher, we peel this, there are no more government programs what do we do in this country? we have social security, we have medicare and medicaid, we have war, and have interest payments on the debt and

everything else that goes under a line called civilian discretionary spending that sounds like a mouthful. >> rose: which includ a percentagef the budget. >> right now it is about three percentage point of our national income, and we are on a trajectory for it to fl below two percentage points, that is educatn, that is environment, that is energy, that is infrastructure, that is science and technology, that is enter national diplomacy, we are gutting the core of government and from this point, that is what the president and the congress freed to in august, it is shocking if you actually look at what they agreed, the republicans want even more cuts right now, and we are on a trajectory of simply closing down a lot of the most basic functions of government in skills in education, our kids are dropping out of colleges because they can't afford the

tuition, and they can't get support from government for this anymore. we are falling further and further behind other economies, and our economies is completely divided between maybe the top 20 percent or 25 percent affluent, college ecated, strong labor markets, benefitting from globalization, and then the bottom two-thirds or even four-fifths of the which who does not have the skills, can't afford the college tuition, can't find jobs anymore because they are in china or in other emerging economies which out compete us because the people that i am talking about in that case don't have the skills to be able to compete effectively in this highl globalized economy. >> is there a future for american manufacturing? >> of course there is, if we invest in it once again, that is science, technology,

infrastructure, and skill labor force, but we have to decide we are going to invest in it again, germany has a strong manufacturing sector but they work hard to keep competitive, we, on the other hd, let all the jobsgo abroad, that has been a real phenomenon for manufacturing over the last 20 years, and unfortunately, when president obama talks about a job program, a jobs program, we hope it is more than one, we are not seeing anything beyond a short-term gimmick, even the latest program -- program -- >> rose: the president has not done enough? >>ell what is the latest jobs programs? we are going to cut taxes for one year and raise them afterwards when we have structural challenges in this country, skills, and infrastructure, the president talks about that but doesn't budget for that. republicans don't even talk about it they just want to sweep all of that away. at is our problem right now.

since 2008, when another gimmick went bad, and that was the gimmick of the housing bubble, which don't, we don't have any enne of growth and jobs our economy. president obama has gone for what i regard as gimmick after gimmick, so call keysian policy, try to raise demand but demand is not really the problem in our economy, the problem is w we cat compete in large swaths of our economy in this international environment. and we are not going to be -- and one way to see that charlie loo can't compete because of what reason? >> if you have a college degree, you can find a good job, and earn a good income, and people with a colle degree can compete. and that is why the unemployment rate of people with a college degree is about four percent and their average income is over $60,000 a year. if you don't have a college degree, then the unemployment rate for those without a high school diploma, that is 14,

15 percent, fothose with a high school diploma it may be 11, 12 percent plus plenty of dropouts from the labor for, and the income levels might be $30,000 or less. because if you have inadequate skills to be able to compete against chinese workers who work or learn a lotless than u.s. workers, then knows jobs naturally migrate abroad, that is why our companies are flush with cash rightnow. but they are not investing in the united states. >> rose: because there is no demand? >> because there is no great profitability. they are investing heavily in china, they are investing heavily in the rest of the world, that is why a lot of our ce. os don't really care about what is happening in the united states, their big money is being earned abroad. >> rose: yes. >> with an increasing number of kuntz 50 percent or more their revenue comes from outside of the united states. >> yes and the jobs are being created abroad and it is not demand in the simple sense that you could still late the puhases, it is rather that to

be profitable they would rather hire labor in china rather than in the u.s., given the mix of skills that they can find here and the wages that they would have to pay versus the mix of skills that they can find there. >> rose: let's hear what you exactly propose in here. so what would you do in terms of advising the president at this point and the goverent at this point? is it, in fact, to increase taxes? on -- you have lked about he, reia wake thing american virtue and prosperity, what is it -- who should be taxed .. how much revenue would you get from that and how would you spend that revenue? >> when things started to go sour 30 years ago for the u.s. it was globalization that gave a huge opportunity th the at the , provided a flow of cheap goods from china, led to the loss of jobs outside of construction sector, and the result was our society started to divide.

many places faced that challenge because it wasn't only the u.s. that was suddenly facing this challenge, started to invest in higher education, arted to invest in advanced skills, advanced technology. >> give us an example of that. >> my favorite examples are in scandinavia, sweden, den marks, norway, they are all high tech economies, they all have much lower unemployment rates, they have balanced budgets or surpluses. >> rose: are they simply social welfare tails in, welfare states. >> yes they are. >> a social democracy that conservatives will look at and say, you know, that is europe and we don't want to be europe. >> except that they work much better than the u.s. >> rose: tell me why. >> they work better because they invested in skills and science technology, infrastructure, energy systems, they did all their homework, they said we are not going to take a pass on all those investments for the future that make us competitive. we are going to get in there and compete, we are going to stay high tech, we are going to stay in the manufacturing sector, we are going to have champions like erickson and other companies

that are cutting edge technologies, le to compete internationally, they did their homework. th didn't go with budget deficits, they didn't go with keysian stimulus of short-term gimmickry but rather they said we will pay our way, we will tax ourselves because that is the price of civilization, and we will make sure that we are a modern, cutting edge, high tech, well educated inclusive society. >> rose: but you are anti-keysian because you don't believe governme has a role to stimulate the economy? >> short-term stimulus when you have a long-term structural problem, ends yo up building a bridge to nowhere. >> rose: that's the problem but the traditional argument made by many and certainly keysians and certainly cruising pan and perhaps larry summers and others wow really do at a time of economic crisis you need to create, you need to stimulate the economy at the most severe crisis you need to have some sense of temporary uplift for the economy, and the best waip to do that is, as cane says is put people to work. >> i told them if they did that

and i disagreed with larry and i disagreed with the advice from the start, i said if you do this, there isn't going anywhere. rather, take a perspective of a decade, for example, because we have to rebuild our society, of course i am for activist government but not the idea that you throw money at the problem for a year and somew expect that a year later you are going to have a rowing economy. but they have kept doing this, one year gimmick, one year gimmick and they don't understand the problem is structural it can't be solved a year at a time so when 2009, the issue of the stimulus was proposed i personally -- rather lay out a ten year scenario -- unless we were really going to rebuild but with proper cutting edge, 21st century projects. >> and how long would it take for those kind of things to kick in and change the economy? >> i think --

>> rose: probably, four, five years in terms of the real deep change, but if you just do gimmick, gimmick, gimmick, you end up three or four years -- >> rose: so $800 billion stimulus program was a gimmick? >> it was a gimmick. because it had no -- >> rose: the republicans are ing to lovzeroo hear you say that. >> i have been saying this for three ars, since it was basically 2009 -- >> and in 2011 -- and if you write about to to to the first two and a half years of obama's administration they were sorry they could not make the stimulus larger because that is what was necessary, not 800 billion but 1.3 trillion and the reason they didn't is because they could not get it through congress. if he could have, they would have done it. >> absolutely wrong, in my opinion. it wasn't that the stimulus wasn't big enough, it wasn't at -- it was that there was not a long-term perspective that started from the proposition, we don't just have a business cycle

with a temporary downturn and we will bounce bk, let's bridg that, that's the keysian views what we showbld have had is a stck agricultural view is say we have lost competent tips we are in a new world and competing against china and competing againstindia, we need to rebuild the foundations of our country and that is not throwing money at problems that is not temporary tax cuts, that is rebuilding over a decade. >> rose: a lot of people agree -- everybody would you agree essentially you need a long-term plan. >> but we have not had one. >> rose: you are absolutely right we have to have skilled labor, we have to invest in science and research and we have to build the infrastrucre back up, we have to create, build schools, build roads, create all kinds of fast speed trains all of that is necessary/mess to build for the future. if the scandinavian model is one you want to choose do that, if you want to look at germany, an export leading economy, before china replaced them that is another example. >> exactly. >> rose: problem is if you are

a politician you do not -- you have to look at set of circumstances between elections, because you do not want to go back to e electorate, of unemployment over nine percent and you don't want the economic grow rate of the gdp to be less than two percent but that is not going to get you re-elected. >> that's exactly whatbama is going to face because he went for gimmickry rather than for a deeper solution. rose: but it would nohave changed the facts on the ground about unemployment and economic rothe. you yourself have said it would take five to ten years. >> no, i said. >>rose: for those kind of things to make a difference. >> the problem is rightow, charlie, we are three years into the administration, and there is really almost nothing to show for it. in the sense of real structural change. >> rose: he will argue with you whether the stimulus created some jobs he will say well there was some benefit from the stimulus and it was not a dollar for dollar but -- >> and i would say that there is very little evidence for it, but more than that, we have lost the

opportunityable, exactly what rahm emanuel said at the beginning, don't waste a crisis, use it for the change,. >> rose:. >> that is exactly what ppened. and the point, charlie, is if our world really is organized for the convenience of the politicians,e won't get out of this. the united states has the shortest election cycle of any major country in the world we have a two-year national cycle, and indeed, for the first year you don't even have a team in place, so i think the kind of political thinking that you are describing is exactly what goes through thei meendz, it just doesn't workrom the point of view of the economy, it may seem right from the point of view of the politician. >> rose: so are you saying it is impossible to do both? it is impossible in the short-term to stimulate economic growth and at the same address the long-term demands to be an investment in the future of the country as well as dealing with the obvious

need of people who do not have a job? today? >> what i am sayg is that a lot of people that didn't have a job should have been back in school and in training with government support. what is the first thing. the idea that e only thing to do with unemployed youth is a shovelnd a shovel ready. >> and you spent as much money as necessary to put them back in school, whatever it took in investing government dollars to retrain them, whatever you had to do. >> well, what i said is make a roper budget plan and pay for it with higher taxation down the road, especially at the top, and the point is that i think one thing that is absolutely the key to understanding our situion is that the income at the very top has soared, so the share of national income taken in by the top one percent is well over 20 percent right now, close to 25 percent. this is astounding. and if we just tax properly at

the very top, we would have mcthat we could, in fact, devote to these purposes, that is why warren buffett is saying that it is incredible that the billionaires who have walked away with the whole prize from globalization have ao walked away with tax cuts. this is the real perversity of our political system. which is the globalaon pushed down the bottom, pushed up the top, and then theolitical system amplified that, it didn't counteract it, it amplified it. >> rose: because of influence -- >> because the people with money had power and money bought power in this country, and money does buy power. we are also in a way from a legal point of view, the most legally corrupted system i would say of mode democracy. >> rose: why would you put it that way? the public financing of campaign or something like that? >> of course, when i was recently speaking too a foreign minister in scandinavia, describing the fact that the president obama has one dinner

after another at 35,000, $35,800 a plate, well what kind of society is that where the president dines for months and months and months with the richest people, what kind of policies a we likelto get out of that? we get policies that favor the richest people, they are the ones that are ound the president day and night. d in fact congress is half millionaires to begin with, and then the president is reportedly trying he to raise $1 billion for his reelection campaign. so that is a lot of dining with rich people, it is a lot of meeting with rich people. we have made a political system right now. >> rose: let me give you access. >> that indicaters to the top, when the world economy is punishing the bottom. we have a business, political business cycle whi is the shortest so we can't even think straight, and i don't think there was an absolute gimmick or

easy remedy to solve the unemployment problem that had built up by a massive bubble in 2009, the amendment to find such a gimmick solved nothing, so i don't i don't think that what i am saying is somehow wrongheaded or naive. >> rose: let's go with the idea of solve nothing. with us there something that you could have done in the short-term to create demand that would enable corporations to want to spend money and therefore employ people? >> probably --. modestly on the margin, charlie, the tools are quite weak, they are unstable, they are unpredictable, this idea that you have a dial that you can turn with a multiplier of 1.2 or 1.4 doesn't really work that w in practice, but what you want to know is that after two years, you have a direction, after three years, you are really heading somewhere, after four years you see a recovery, after five years, you more or less recovered and after ten years, you are actually achieving sustaid and sustainable

economic groh, in otherords, w you want to know that the sum of the short terms is actually getting you somewhere. the kind of approach we have had now big stimulus at the beginning but without a perspective, then the iat the end of 2010, an agrment of the republicans an and in the white house, keep the tax rate cuts and a short-term payroll tax cut, didn't do anything. now in 2011, the president is proposing yet another one year gimmick. the problem is that these short-term measures don't add up to a long-term policy. we do not make plans in this country right now, we have no framework for the longer term, we have no energy policy, we have no infrastructure policy. we are in the third year of an adadministrationhat i voted for, that i suprt, and that i absolutely think has a better message than the republican -- >> rose: syou will support them again? >> i will support them again but i am so unhappy at the lack of direction, i wrote the book

because i am saying,. >> rose: because the president is getting bad advice? >> i think the president is getting bad advice and i think he is making bad decisions, both, i don't think it is just -- >> the bad decisions are, a, one, the stimulus was a bad idea? >> from the beginning, when he had a mandate, he should have laid out a long-term approach with a budget attached to it, not a sho-term stimulus. >> rose: and should he have included tax reform in that long-term approach? >> he should have raised taxes in that long-term approach. he should have raised corporate taxes we have an abusive corporate tax system wheree have, with the connivance of the irs and the politicians allowed the biggest companies in this country, which are now earning a julio huge pro portion of their profits abroad to keep and book their profits abroad in the cayman islands. >> and should he -- >> it is scandalous. >> rose: in terms of tax havens. >> it is scandalous. >> rose: should he also have in a sense said what we need is more regulation and more

enforcement of regulation and that is a part, part of what i want to do? should he indeed have said also we need healthcare reform immediately and that is what i want to do immediately? >> well -- >> and when you start adding hodes things up, where are you? >> i think with each of these things. >> rose:. >> i think with each of these things, charlie, he went to the lobbies to say what will the traffic bear? and the problem is, that to the lobbyist. >> rose: to the lobbyist or congress? >> that the same thousand in america. >> rose: because congress only listen to the lobbyists. >> because the lobbiest dodge nate the congress. >> so measures like healthcare is it also, unfortunately, while it brought some people int health insurance, which i strongly support, it didn't solve any of the problems of the world's most overpriced healthcare system, because he let the lobbies essentially kick at a time that there would be no public option, noundamental reform of the system, that is another part -- >> rose: he also a maid the

decisionhat, he also made the decision it was not politically viable to have aublic option. >> absolutely. >> rose: he made that political decision. >> he apparently made that politician decision and i think when we have a president that loses his voice at the crucial moments as i believe -- well, i think that strategy, basically, in our constitutional system, only the president demands the bully pul pulpit and if he doest describe a longer term plan, a real strategy -- >> rose: you are indicting the guy you voted for for a failure to lead. >> well i thought he was going to lead in a different way. i thought he was going to bring real change, and instead the lobbyist continue to completely dominate. >> rose: so you are saying i am supporting somebody i am terribly supporting insimp because i see nothing bard better on the oorizon. >> i see a lot worse on the or on is i think is the problem, i think the republican party is mindless in its single-minded pursuit of tax cuts for the rich. that is all the party stands for

right now and to president obama's stands for decent things, but he is not doing proper long-term pnning he is not doing proper wrong term budgeting he is not taking on the lobbies and i hope he does, if he doesn't he can't have a success, if he doesn't have the success our country doesn't have the success. >> rose: i am trying to understand on healthce i don't you simply would have adved him to go ahead with healthcare reform, even though it turned out to be politically dicey, you would have advised him to go ahead and go for everything he believed in, certainly the public option, which may be some variation of a single fair system, payer system? >> right. >> yes. >> and you think the country, do you think it was -- this is the interesting interesting question. there are a lot of people at the time in debate, certainly on the left, argued that if, in fact, he articulated that point of view, well, he could have prevailed, others say, to, america wasn't ready for it. >> charlie, when i wrote this book, i read i innumerable opinn

surveys, many than i read before, and i was deeply impressed with the oddity that the core of american public opinion is actually moderate, centrist, humane, compassion natalee holloway and quite different from the policies -- >> rose: why are you surprised by that. >> i am surprised in the following way. let me describe -- >> rose: moderate, compassionate -- >> the surprise, let me explain it. the surprise is that with that strong majority that yo find in the center, we are producing policies wl to the rightof that, for example, the american people said over,onsistently for years and yearsnd years that they wanted the bush tax cuts on the high income to end, have they ended? no. was president obama pushed to the wall on that? no. 60 percent of the american people said, end the tax cuts

for the rich. but the democrats were divided internally, half the party wanted tkeep the tax cuts for the rich, and all the republicans wanted to keep the tax cuts for the ric >> rose: right. >> and president obama signed on to them. >> rose: he signed on to extending them. >> yes. >> rose: the tax cuts for the middle class, assuming he believed in it based on what he said at the time, and in extending temporarily for two years tax cuts for t rich. >> that's exactly right. and the american people have said, consistently, get out of these wars,ut military spending, that also hasn't happened. so on many issues. >> rose: you can't do that, i meanable would you have had the president just say, immediately over the next six months i am going to withdraw from afghanistan and withdraw from iraq? >> i would have, yes. >> rose: immediately? everybody that is there would come home in six months? and you could lose -- if you do that. >> we waste add fortunes, hundreds of billions of dollars and accomplished nothing, the surge in afghanistan. >> we have accomplish nothing so that is just a tragedy.

>> rose: so made the wro decision on afghanistan too for you? >> well, he did because that is continue hugh at this of our political system, a lot of what my book is really saying is, that we have a deeply entrned politics in this country, it is not reallyhe battles of the two parties, the lobbyist control things, the rich get their tax cuts, we don't do fundamental reform, we go for short-term gimmicks and we have a lot of consistency, just the wrong kind ofonsistency, president obama ran on a campaign of change in 2008, but in area after area he didn't bring any fundamental change. my view is h he didn't try in te way that he should have, because he bought into this lobby driven and campaign finance driven system. and he is one of the great campaign fund raisers, he is with wall street all the time he is with the rich all the time. he is, 35,80 35,800 plate dinner the other.

i support him in the sense that compared to the opposition, what are you going to do? and i hope he does better and at is th poinof this is to urge that we need a politics that rises beyond the gimmickry and we don't have it yet. >> rose: the book is called the price of civilization. reia wake thing aricane virtue and prosperity, jeffrey sachs previous books as you know the end of poverty and commonwealth. thank you. captioning sponsored by rose communications captioned by media access group at wgbh access.wgbh.org ir