1 00:00:00,901 --> 00:00:03,137 (cinematic music) 2 00:00:02,000 --> 00:00:07,000 Downloaded from YTS.MX 3 00:00:08,000 --> 00:00:13,000 Official YIFY movies site: YTS.MX 4 00:00:09,510 --> 00:00:11,979 (soft music) 5 00:00:15,516 --> 00:00:17,351 - It's a free market economy 6 00:00:17,351 --> 00:00:19,853 but it's also a national security issue. 7 00:00:19,853 --> 00:00:21,955 - Okay well I tend to think-- - You're going to be an independant 8 00:00:21,955 --> 00:00:23,691 country, you need to be independant of food. 9 00:00:23,691 --> 00:00:25,093 - I tend to think of climate change 10 00:00:25,093 --> 00:00:26,427 as a national security issue. 11 00:00:26,427 --> 00:00:27,661 - I do too. 12 00:00:27,661 --> 00:00:29,097 - They're not gonna be able to do it 13 00:00:29,097 --> 00:00:30,364 in time the way they're doing it. 14 00:00:30,364 --> 00:00:32,600 And every time, well. - Recognize and adapt 15 00:00:32,600 --> 00:00:34,202 and change policies-- - Okay, let's... 16 00:00:34,202 --> 00:00:37,037 Let's look at ourselves right now, okay? 17 00:00:37,271 --> 00:00:39,773 Let's say this road we're on 18 00:00:39,773 --> 00:00:42,543 is the American political system. 19 00:00:42,543 --> 00:00:45,679 And you see past that bridge up there, 20 00:00:45,679 --> 00:00:48,282 we have to get past that bridge in the next minute, 21 00:00:49,049 --> 00:00:52,120 except this is what we're stuck on 22 00:00:52,120 --> 00:00:53,987 because we can't get there. 23 00:00:53,987 --> 00:00:55,889 And you know this as well as I do. 24 00:00:57,658 --> 00:01:00,461 (rain pouring) 25 00:01:00,461 --> 00:01:02,163 I know people in their 20s and 30s 26 00:01:02,163 --> 00:01:04,665 that will not have kids, 27 00:01:04,665 --> 00:01:06,066 because they're like, 28 00:01:06,066 --> 00:01:08,469 "I'm not gonna subject a human being to what's coming." 29 00:01:09,403 --> 00:01:11,839 Do you think my children who are 15 years younger 30 00:01:11,839 --> 00:01:13,507 than that are somehow gonna go, 31 00:01:13,507 --> 00:01:16,176 "God I always wanted my kids to grow up 32 00:01:16,176 --> 00:01:18,979 in Mad Max eating lizards off the road 33 00:01:18,979 --> 00:01:22,049 and murdering their neighbors to get a glass of water." 34 00:01:22,049 --> 00:01:25,353 I mean, things are gonna break down. 35 00:01:27,588 --> 00:01:29,089 - [Wesley] Wesley the passion that you 36 00:01:29,089 --> 00:01:30,758 and so many others have on us this 37 00:01:30,858 --> 00:01:32,993 is what gives me hope in democracy 38 00:01:32,993 --> 00:01:34,762 and hope in the future of the country. 39 00:01:34,762 --> 00:01:37,531 That's what it's gonna take to make change happen. 40 00:01:37,531 --> 00:01:39,933 (soft music) 41 00:01:41,269 --> 00:01:44,172 - [Wesley Jr.] I think we're living in a rigged system. 42 00:01:45,673 --> 00:01:47,241 And I think it's very hard 43 00:01:47,241 --> 00:01:50,878 to break out of that rigged system because money talks. 44 00:01:50,878 --> 00:01:53,281 (soft music) 45 00:02:00,053 --> 00:02:02,690 - I drove down from San Francisco yesterday on Highway Five 46 00:02:02,690 --> 00:02:04,258 and it's bumper to bumper 47 00:02:04,258 --> 00:02:07,060 for 300 miles on (laughs) Highway Five. 48 00:02:07,060 --> 00:02:10,231 And you can think, God, that's just a small part of it. 49 00:02:10,431 --> 00:02:13,601 So we know in these big urban areas 50 00:02:13,601 --> 00:02:17,971 like the Los Angeles Basin, metropolitan New York, 51 00:02:17,971 --> 00:02:20,808 we know that, we live here for convenience. 52 00:02:20,808 --> 00:02:22,476 We live here because civilization works, 53 00:02:22,476 --> 00:02:25,546 but we also know it is relatively fragile. 54 00:02:25,546 --> 00:02:27,781 It depends on power, it depends on water. 55 00:02:27,781 --> 00:02:30,818 It depends on food, it depends on warehousing. 56 00:02:30,818 --> 00:02:34,422 It depends on security and people following the rules 57 00:02:34,422 --> 00:02:35,923 and obeying the laws. 58 00:02:35,923 --> 00:02:38,959 And it only takes small disruptions to that. 59 00:02:38,959 --> 00:02:42,129 Whether through natural disaster, through climate change 60 00:02:42,129 --> 00:02:45,433 through organized crime or through war, 61 00:02:45,999 --> 00:02:48,336 through exogenous forces. 62 00:02:51,171 --> 00:02:53,906 And you'd see catastrophe. 63 00:02:55,743 --> 00:02:58,746 - [Narrator] It's easy to see how things can fall apart, 64 00:02:58,746 --> 00:03:00,948 Long tunnels are now pitch dark. 65 00:03:00,948 --> 00:03:02,983 (cars passing) 66 00:03:03,183 --> 00:03:06,454 Communications and telephone systems have collapsed. 67 00:03:06,454 --> 00:03:08,188 On motorways cars simply pull over, 68 00:03:08,188 --> 00:03:09,957 if they find a place with a signal. 69 00:03:09,957 --> 00:03:12,360 (man speaking foreign language) 70 00:03:12,360 --> 00:03:13,827 People now stand in line 71 00:03:13,827 --> 00:03:16,464 outside supermarkets, not to go in, 72 00:03:16,464 --> 00:03:18,699 they're just hoping that it will eventually open. 73 00:03:18,699 --> 00:03:20,801 (people chattering) 74 00:03:20,801 --> 00:03:22,703 (wind blows vehemently) 75 00:03:22,703 --> 00:03:26,774 (speaking in a foreign language) 76 00:03:36,517 --> 00:03:39,387 - Combination of the weight of scientific evidence. 77 00:03:39,387 --> 00:03:42,723 And the dynamics of the financial system suggest 78 00:03:42,723 --> 00:03:44,658 that in the fullness of time, 79 00:03:44,658 --> 00:03:48,396 climate change will threaten financial resilience 80 00:03:48,396 --> 00:03:51,031 and longer term prosperity. 81 00:03:51,031 --> 00:03:54,402 - All the money in the world will not save us 82 00:03:54,402 --> 00:03:56,370 once it starts to fail. 83 00:03:56,370 --> 00:03:57,638 And then people will discover 84 00:03:57,638 --> 00:04:00,240 that you can't eat a flat screen TV 85 00:04:00,240 --> 00:04:02,410 and you can't eat a German luxury car. 86 00:04:02,410 --> 00:04:04,412 (pressing salt shaker) 87 00:04:04,412 --> 00:04:05,746 (tries to open door) 88 00:04:05,746 --> 00:04:07,381 - What are we gonna do? 89 00:04:07,381 --> 00:04:11,385 (engine revving silently) 90 00:04:11,385 --> 00:04:13,086 - It's war. 91 00:04:13,086 --> 00:04:16,356 And it's a much more serious war than World War II 92 00:04:16,356 --> 00:04:19,560 because if we lose, we're all dead. 93 00:04:19,560 --> 00:04:20,827 I mean, you'll already be dead. 94 00:04:20,827 --> 00:04:22,762 So maybe it doesn't concern you as much 95 00:04:22,762 --> 00:04:25,499 but I don't want my children to starve to death 96 00:04:25,499 --> 00:04:28,201 - You're writing me off really early. 97 00:04:28,201 --> 00:04:29,603 Please don't write me off so early. 98 00:04:29,603 --> 00:04:31,539 - All right, 20 more years 99 00:04:31,739 --> 00:04:34,375 (children screaming) 100 00:04:34,375 --> 00:04:35,543 - Looks good doesn't it? 101 00:04:35,543 --> 00:04:36,544 - It does. 102 00:04:37,378 --> 00:04:39,212 - It's a great part of America. 103 00:04:39,212 --> 00:04:40,681 It's like an American icon. 104 00:04:43,517 --> 00:04:45,686 My generation was the Beach Boys. 105 00:04:45,686 --> 00:04:47,020 - Yeah. 106 00:04:47,020 --> 00:04:48,622 - Surfing USA. 107 00:04:48,622 --> 00:04:50,290 - Yeah. (water splashes) 108 00:04:53,060 --> 00:04:56,296 - So, you know, tourist heaven. 109 00:04:56,296 --> 00:04:57,230 - Yeah. 110 00:04:57,331 --> 00:04:59,032 - But if I were a tourist from another planet 111 00:04:59,032 --> 00:05:01,935 and I was like, "Hey, let's go visit earth." 112 00:05:01,935 --> 00:05:03,604 And then my travel guy was like, 113 00:05:03,604 --> 00:05:06,874 "well it's populated 114 00:05:06,874 --> 00:05:11,879 by about 10 billion carnivorous apes and they're armed." 115 00:05:12,312 --> 00:05:14,815 - My goal is to see... - Let's give you 20 more year 116 00:05:14,815 --> 00:05:17,718 Is to see your children 117 00:05:17,718 --> 00:05:20,320 grown, educated, married 118 00:05:20,320 --> 00:05:23,624 and I wanna have great-grandchildren, that's my goal. 119 00:05:23,624 --> 00:05:26,059 - Okay, if you wanna have great grandchildren, 120 00:05:26,059 --> 00:05:28,662 what you have to do is you have to help build 121 00:05:28,662 --> 00:05:32,299 that environment that they're gonna survive in. 122 00:05:32,299 --> 00:05:36,604 - I want you to see the facts as they appear to me. 123 00:05:36,604 --> 00:05:38,506 I'm a national security guy. 124 00:05:38,506 --> 00:05:40,641 That's what I've spent my life working on 125 00:05:40,641 --> 00:05:43,811 trying to protect America, the constitution, 126 00:05:43,811 --> 00:05:46,980 the way we live and our futures 127 00:05:46,980 --> 00:05:49,282 for our children and grandchildren. 128 00:05:49,282 --> 00:05:52,420 - I love my dad we're both concerned about security. 129 00:05:52,420 --> 00:05:54,522 We're both concerned about the future 130 00:05:54,522 --> 00:05:56,256 but there's definitely a difference 131 00:05:56,256 --> 00:05:58,358 in the generational perspective of this. 132 00:05:59,693 --> 00:06:02,863 Now I understand his generation because they grew up, 133 00:06:02,863 --> 00:06:05,198 right after World War II, the baby boomers. 134 00:06:08,135 --> 00:06:10,804 They grew up in a world that was constantly improving. 135 00:06:10,804 --> 00:06:12,506 (car hooting) 136 00:06:12,506 --> 00:06:14,875 More rights, more money. 137 00:06:14,875 --> 00:06:17,210 The economy constantly expanded. 138 00:06:20,648 --> 00:06:25,519 They saw us go from fairly primitive industrial society 139 00:06:27,154 --> 00:06:28,656 to what we have today. 140 00:06:29,890 --> 00:06:32,726 - There've been empires that formed and collapsed. 141 00:06:33,894 --> 00:06:39,500 And about 200 years ago, mankind suddenly discovered 142 00:06:39,900 --> 00:06:43,170 how to take energy more effectively from the earth. 143 00:06:43,971 --> 00:06:46,740 In the start of the industrial age. 144 00:06:46,740 --> 00:06:51,645 And it was coal and it was England. 145 00:06:51,645 --> 00:06:55,315 And it was a steam engine that could use that coal 146 00:06:55,315 --> 00:06:58,085 and it spread throughout the whole world. 147 00:06:58,085 --> 00:06:59,987 We have taken that energy 148 00:06:59,987 --> 00:07:02,055 and built this civilization from it 149 00:07:03,323 --> 00:07:06,093 and the price that's being paid 150 00:07:06,093 --> 00:07:08,996 is the carbonization of the atmosphere 151 00:07:08,996 --> 00:07:10,397 and climate change. 152 00:07:15,202 --> 00:07:18,271 (car engine roaring) 153 00:07:22,776 --> 00:07:24,578 - Yeah, that's the finale. 154 00:07:26,446 --> 00:07:29,049 (upbeat music) 155 00:07:32,553 --> 00:07:34,622 - You know, when you say in World War II, 156 00:07:34,622 --> 00:07:36,524 everybody chipped in and did their part. 157 00:07:36,524 --> 00:07:38,626 And that was seventy-five years ago. 158 00:07:38,626 --> 00:07:44,297 Now we've been involved in so far, a 19 year war. 159 00:07:45,533 --> 00:07:47,134 And in that 19 year war, 160 00:07:47,134 --> 00:07:49,469 we were told to go shopping 161 00:07:49,469 --> 00:07:51,238 and to buy more stuff. 162 00:07:51,238 --> 00:07:53,040 We were never told to save anything. 163 00:07:53,040 --> 00:07:55,408 We were never told to contribute to a war effort. 164 00:07:55,408 --> 00:07:57,244 They even cut taxes 165 00:07:57,244 --> 00:07:59,312 when we went to war - That's right, twice. 166 00:07:59,312 --> 00:08:00,814 - Twice. 167 00:08:02,783 --> 00:08:05,318 (upbeat music) 168 00:08:07,154 --> 00:08:10,824 With gambling, the house always wins and it's a rigged game. 169 00:08:10,824 --> 00:08:12,325 It just is. 170 00:08:12,325 --> 00:08:13,994 Not unlike the banking system 171 00:08:13,994 --> 00:08:16,263 in our political system nowadays. 172 00:08:16,263 --> 00:08:17,565 It's all rigged. People don't 173 00:08:17,565 --> 00:08:19,499 have an actual choice in a lot of stuff. 174 00:08:19,499 --> 00:08:21,635 Yeah, people have a choice to go to Vegas. 175 00:08:23,270 --> 00:08:25,005 - When you ran for president, 176 00:08:25,005 --> 00:08:28,508 I drove all over New Mexico and other places. 177 00:08:28,508 --> 00:08:31,078 All I could think in 2003 was that, 178 00:08:31,078 --> 00:08:34,815 we can't actually build an economy 179 00:08:34,815 --> 00:08:38,150 off stripping, gambling and crystal meth. 180 00:08:38,150 --> 00:08:40,520 And we've made a concerted effort to do that 181 00:08:40,520 --> 00:08:43,123 in this country for the last 20 years. 182 00:08:43,123 --> 00:08:45,859 - You know, our business caters to what people want. 183 00:08:48,596 --> 00:08:52,633 American societies produced enormous amounts of leisure. 184 00:08:55,703 --> 00:08:59,039 - They've tried to recreate the feel of the Roman Empire 185 00:08:59,039 --> 00:09:00,708 in the heart of Vegas. 186 00:09:01,474 --> 00:09:04,878 And interestingly it's like late Roman Empire. 187 00:09:04,878 --> 00:09:07,280 So it's right, as everything collapsed. 188 00:09:12,452 --> 00:09:14,855 - We have the smarts and the know-how 189 00:09:14,855 --> 00:09:16,624 and the conscience to know 190 00:09:16,624 --> 00:09:19,392 we have to sustain and protect this earth 191 00:09:19,392 --> 00:09:21,561 because this is where we live. 192 00:09:21,561 --> 00:09:23,731 So we love civilization, 193 00:09:23,731 --> 00:09:26,033 but we've got to change 194 00:09:26,033 --> 00:09:29,703 the way we're approaching our economic endeavors. 195 00:09:30,403 --> 00:09:32,005 - The world is suffering 196 00:09:32,005 --> 00:09:34,241 through the worst financial crisis since 1930s. 197 00:09:34,241 --> 00:09:36,309 - There's been a lot of damage done. 198 00:09:36,309 --> 00:09:39,479 - They hear $700 billion package, 199 00:09:39,479 --> 00:09:41,248 and they immediately think the next day 200 00:09:41,248 --> 00:09:42,650 everything is gonna be better. 201 00:09:42,650 --> 00:09:46,086 - You're witnessing so much wealth loss. 202 00:09:46,086 --> 00:09:47,855 - If you connect the financial system 203 00:09:47,855 --> 00:09:50,758 to the other possible shocks that are out there, 204 00:09:50,758 --> 00:09:55,763 you realize it's, we're walking on ice. 205 00:09:55,996 --> 00:09:57,698 - Panic coming through the phones, 206 00:09:57,698 --> 00:10:00,000 on the floor, traders just trying to rush 207 00:10:00,000 --> 00:10:01,935 to get to the point of sale, 208 00:10:01,935 --> 00:10:03,270 to get rid of their stock. 209 00:10:04,104 --> 00:10:05,706 - [Man] You know, what people built up 210 00:10:05,706 --> 00:10:08,742 over years and years and years, has been erased. 211 00:10:09,943 --> 00:10:11,378 (bell ringing) (people applauding) 212 00:10:11,378 --> 00:10:16,516 - At some point, you run a risk that something goes afoul. 213 00:10:17,217 --> 00:10:18,786 We're worried about Greek debt. 214 00:10:18,786 --> 00:10:20,420 We're worried about Italian debt. 215 00:10:20,420 --> 00:10:21,922 - Spanish debt. 216 00:10:21,922 --> 00:10:24,925 - I mean and so far, you know, it's been finessed, 217 00:10:24,925 --> 00:10:27,761 but, and you know, 218 00:10:27,761 --> 00:10:30,230 you can't see what the U.S Treasury is doing behind. 219 00:10:30,230 --> 00:10:32,465 We're doing a lot with the U.S Government 220 00:10:32,465 --> 00:10:34,634 to keep the system working. 221 00:10:34,634 --> 00:10:38,471 And you just don't know what the limits are. 222 00:10:38,471 --> 00:10:39,973 - So if you think, 223 00:10:39,973 --> 00:10:43,276 how can we lead the world in fixing the economy 224 00:10:43,276 --> 00:10:44,644 and fixing the climate? 225 00:10:44,644 --> 00:10:47,280 You have to make the investments now. 226 00:10:47,280 --> 00:10:49,883 Because you can't wait till you're like Somalia. 227 00:10:49,883 --> 00:10:51,451 I mean, you may notice 228 00:10:51,451 --> 00:10:53,821 Somalia doesn't have a lot of infrastructure programs 229 00:10:53,821 --> 00:10:55,388 that they fund. 230 00:10:55,388 --> 00:10:58,325 They're not pushing the boundaries in technology, 231 00:10:58,325 --> 00:11:00,794 and that's not because people in Somalia are stupid, 232 00:11:00,794 --> 00:11:03,430 it's not just because they've lived under civil war, 233 00:11:03,430 --> 00:11:06,466 it's because they don't have capital. 234 00:11:06,466 --> 00:11:08,501 They don't have resources. 235 00:11:12,773 --> 00:11:16,509 - Capitalism is an economic organization. 236 00:11:16,509 --> 00:11:18,979 It's a way of organizing the economy 237 00:11:18,979 --> 00:11:23,984 that is focused on trying to create future returns 238 00:11:23,984 --> 00:11:26,586 over and above of the investments I make today. 239 00:11:27,020 --> 00:11:29,189 So it's all about expansion. 240 00:11:29,189 --> 00:11:30,690 It's all about making more in the future 241 00:11:30,690 --> 00:11:32,159 than we currently have. 242 00:11:34,027 --> 00:11:35,695 - When you borrow money, 243 00:11:35,695 --> 00:11:37,364 well, what happens is, 244 00:11:37,364 --> 00:11:39,699 the banks would like to charge you interest 245 00:11:39,699 --> 00:11:41,368 not only for the risk, 246 00:11:41,368 --> 00:11:44,938 but because they want the capital to come back with babies, 247 00:11:44,938 --> 00:11:47,975 not just to go and that's it. 248 00:11:47,975 --> 00:11:51,278 Because they want to make sure that capital is increasing 249 00:11:51,278 --> 00:11:53,380 and that's how you build wealth 250 00:11:53,380 --> 00:11:55,615 and that's how you increase your assets. 251 00:11:56,549 --> 00:12:00,788 - And it's that debt that has enabled 252 00:12:00,788 --> 00:12:03,190 all of this to be here. 253 00:12:03,190 --> 00:12:05,859 It's the accelerant to economic growth. 254 00:12:11,064 --> 00:12:12,332 - Now, as long as the company 255 00:12:12,332 --> 00:12:14,301 can service that debt, it's okay. 256 00:12:14,301 --> 00:12:15,402 But consumer debt, 257 00:12:15,402 --> 00:12:16,636 if it can't be serviced, is a problem. 258 00:12:16,636 --> 00:12:17,871 Mortgage debt if it can't be serviced, 259 00:12:17,871 --> 00:12:19,372 as we've seen is a problem, 260 00:12:19,372 --> 00:12:20,707 and national debt, if it can't be serviced, 261 00:12:20,707 --> 00:12:22,542 can be a national security threat. 262 00:12:22,542 --> 00:12:26,313 - Alexa, how do we avert a financial crisis? 263 00:12:27,915 --> 00:12:30,750 - [Alexa] Here's something I found on Wikipedia. 264 00:12:30,750 --> 00:12:34,054 A financial crisis is any of a broad variety of situations 265 00:12:34,054 --> 00:12:35,555 in which some financial assets 266 00:12:35,555 --> 00:12:37,991 suddenly lose a large part of their nominal value. 267 00:12:40,193 --> 00:12:45,098 - Preparing for the future, when the future is unknown, 268 00:12:45,098 --> 00:12:47,868 is obviously difficult, 269 00:12:48,701 --> 00:12:53,006 but we are today taking steps 270 00:12:53,006 --> 00:12:56,944 that are clearly going to make things worse. 271 00:12:56,944 --> 00:12:58,778 - Finance is really making big bets 272 00:12:58,778 --> 00:13:00,780 on an uncertain future. 273 00:13:00,780 --> 00:13:04,051 And you wanna be careful about making too many bets, 274 00:13:04,051 --> 00:13:05,886 especially when there is some indication 275 00:13:05,886 --> 00:13:08,421 that the future might be very different from the present. 276 00:13:10,123 --> 00:13:12,893 (insects flying) 277 00:13:14,727 --> 00:13:17,297 (upbeat music) 278 00:13:18,365 --> 00:13:20,733 - [Wesley Jr.] So much of our energy's caught up 279 00:13:20,733 --> 00:13:22,235 in the financial system 280 00:13:22,235 --> 00:13:26,039 that we've neglected the investment in real things 281 00:13:26,039 --> 00:13:28,408 that are required to take the country forward. 282 00:13:28,408 --> 00:13:32,112 - We do, we haven't really come to grip with this yet, 283 00:13:32,112 --> 00:13:33,580 because the economic system, 284 00:13:33,580 --> 00:13:35,782 the political system just doesn't wanna face it. 285 00:13:39,552 --> 00:13:42,155 (upbeat music) 286 00:13:50,931 --> 00:13:52,432 - The economy has grown, 287 00:13:52,432 --> 00:13:54,667 but debts, indebtedness of households, 288 00:13:54,667 --> 00:13:56,336 firms, banks, governments, 289 00:13:56,336 --> 00:13:59,006 the debts of all these actors in economic system 290 00:13:59,006 --> 00:14:01,608 have increased much more than GDP. 291 00:14:01,608 --> 00:14:02,442 - Really? 292 00:14:02,442 --> 00:14:05,078 - Yeah. So let's say, 293 00:14:05,078 --> 00:14:07,680 I think maybe in the 1970s or so the, 294 00:14:08,515 --> 00:14:12,419 total debt of all these actors, households, firms, banks, 295 00:14:12,419 --> 00:14:17,257 government, the total debt to GDP ratio was maybe of, 296 00:14:17,257 --> 00:14:19,859 of the order 120%. 297 00:14:19,859 --> 00:14:22,095 And now that has increased very steadily 298 00:14:22,095 --> 00:14:25,498 over time to about 290%. So-- 299 00:14:25,498 --> 00:14:29,369 - So if no one got paid for three years 300 00:14:29,369 --> 00:14:30,337 and continued working the whole time. 301 00:14:30,337 --> 00:14:31,771 - Exactly. Yup, yup. 302 00:14:31,771 --> 00:14:34,040 - And didn't eat or drive cars or anything, 303 00:14:34,040 --> 00:14:35,175 we could pay that debt? 304 00:14:35,175 --> 00:14:36,176 - Yeah. Yeah. 305 00:14:36,176 --> 00:14:37,544 - But does the debt matter? 306 00:14:38,278 --> 00:14:40,380 - Well, I mean, the debt matters to some, 307 00:14:40,380 --> 00:14:43,816 to the extent that we have a system, 308 00:14:43,816 --> 00:14:45,618 it is called capitalism. 309 00:14:45,618 --> 00:14:47,387 And in that system, 310 00:14:47,387 --> 00:14:49,722 laws are telling us that debts have to be repaid. 311 00:14:49,722 --> 00:14:52,192 (soft music) 312 00:14:52,892 --> 00:14:58,065 How much debt do we need to generate $1 of GDP? 313 00:14:58,131 --> 00:15:02,702 For the economy to create one extra dollar of income, 314 00:15:03,736 --> 00:15:09,176 we need, we are relying on $3.30 of extra debt. 315 00:15:10,577 --> 00:15:12,545 (soft music) 316 00:15:12,545 --> 00:15:14,747 An income is basically wages plus profits. 317 00:15:14,747 --> 00:15:18,085 That is what GDP is, you can also call it differently. 318 00:15:18,085 --> 00:15:23,090 You can say it is value added, created by producing stuff. 319 00:15:23,323 --> 00:15:27,194 - And as a result of emphasizing on the GDP, 320 00:15:27,194 --> 00:15:31,598 we've ended up in a situation where the market is going on. 321 00:15:31,598 --> 00:15:34,367 There is some selling, there is some buying, 322 00:15:34,367 --> 00:15:38,038 but we really don't know how well people are doing. 323 00:15:38,038 --> 00:15:40,773 (soft music) 324 00:15:40,773 --> 00:15:44,077 - [Wesley Jr.] You know, when we were kids, $1 of debt, 325 00:15:44,077 --> 00:15:46,846 pretty much created $1 of GDP. 326 00:15:46,846 --> 00:15:48,281 - Oh wow. 327 00:15:48,281 --> 00:15:49,616 - So, you know, it's like Keynesian economics, 328 00:15:49,616 --> 00:15:51,618 you put the money into social projects 329 00:15:51,618 --> 00:15:53,853 and it recycles back into the economy. 330 00:15:54,887 --> 00:15:58,458 But today it takes more than $3 of debt 331 00:15:58,458 --> 00:16:00,227 to produce $1 of GDP. 332 00:16:01,561 --> 00:16:03,863 And that's all occurred in the last like 30 years. 333 00:16:03,863 --> 00:16:05,065 - Wow. 334 00:16:05,065 --> 00:16:07,934 So in order to create more money, 335 00:16:07,934 --> 00:16:11,138 you've gotta create more debt. 336 00:16:11,138 --> 00:16:12,639 - Three times as much debt. 337 00:16:12,639 --> 00:16:13,640 - That's insane. 338 00:16:13,640 --> 00:16:15,042 - More than three times as much debt. 339 00:16:15,042 --> 00:16:17,144 - It's that access to credit and the kind of ability 340 00:16:17,144 --> 00:16:20,547 to take on lots and lots of debt that hasn't been able 341 00:16:20,547 --> 00:16:25,485 to sustain this kind of trend in consumption. 342 00:16:25,485 --> 00:16:28,955 - So there is a very, very strong relationship 343 00:16:28,955 --> 00:16:31,891 between increases in income 344 00:16:31,891 --> 00:16:34,327 and increases in carbon emissions. 345 00:16:34,327 --> 00:16:36,963 (soft music) 346 00:16:36,963 --> 00:16:39,766 - In the U.S, which is already kind of the most 347 00:16:39,766 --> 00:16:42,435 disproportionately high energy producing, 348 00:16:42,435 --> 00:16:46,939 high consuming country per capita spending grew 42% 349 00:16:46,939 --> 00:16:50,077 overall from 1990 to 2008. 350 00:16:50,077 --> 00:16:53,080 With a 300% increase in spending on furniture, 351 00:16:53,080 --> 00:16:56,683 an 80% increase on clothing and a 15 to 20% increase 352 00:16:56,683 --> 00:16:58,185 on vehicles, housing and food. 353 00:16:58,185 --> 00:17:00,120 Despite the fact that wages were pretty stagnant 354 00:17:00,120 --> 00:17:01,354 over that time period. 355 00:17:01,354 --> 00:17:03,756 (soft music) 356 00:17:08,828 --> 00:17:10,963 - So this is the Wall Street Bull, 357 00:17:10,963 --> 00:17:13,333 which is a symbol of a positive market, 358 00:17:13,333 --> 00:17:16,136 which means more people are spending money, 359 00:17:16,136 --> 00:17:17,936 than spent it the day before. 360 00:17:17,936 --> 00:17:20,373 - Our democracies basically have become dependent 361 00:17:20,373 --> 00:17:24,277 on the idea that there will always be more to go around 362 00:17:24,277 --> 00:17:26,146 that we can expand, expand, expand. 363 00:17:27,780 --> 00:17:29,715 We know that there's fundamental uncertainty. 364 00:17:29,715 --> 00:17:32,118 We just don't know what the future will hold. 365 00:17:32,118 --> 00:17:34,554 (soft music) 366 00:17:41,394 --> 00:17:43,061 - Over the course of my career, 367 00:17:43,061 --> 00:17:45,198 I've worked in mathematical modeling. 368 00:17:45,198 --> 00:17:48,067 I was a space physicist for NASA 369 00:17:48,067 --> 00:17:50,670 and I was on pretty big projects. 370 00:17:50,670 --> 00:17:54,507 I was on the Hubble Space Telescope team as a scientist. 371 00:17:54,507 --> 00:17:57,377 (soft music) 372 00:17:57,377 --> 00:18:01,414 I was on mission to Mars as a space physicist. 373 00:18:01,414 --> 00:18:04,217 And so I'd worked on in some pretty big areas. 374 00:18:05,752 --> 00:18:07,554 When people say, well, 375 00:18:07,554 --> 00:18:09,922 how do you know that the climate models that we have now 376 00:18:09,922 --> 00:18:12,725 will be accurate in 30 years time? 377 00:18:12,725 --> 00:18:15,562 What I can tell you is that the models that we were working 378 00:18:15,562 --> 00:18:19,666 on 30 years ago are actually unbelievably accurate. 379 00:18:19,666 --> 00:18:22,101 (soft music) 380 00:18:23,102 --> 00:18:24,737 What's happened with the atmosphere, 381 00:18:24,737 --> 00:18:28,375 is we're seeing this type of instability, kind of like, 382 00:18:28,375 --> 00:18:33,246 you know, if you had a top just standing there, 383 00:18:33,246 --> 00:18:34,747 it'll just fall over. 384 00:18:34,747 --> 00:18:36,449 And so you're seeing that type of, 385 00:18:36,449 --> 00:18:39,219 that type of wobbling and instability. 386 00:18:39,219 --> 00:18:43,456 I don't exactly know how unstable things are going to be, 387 00:18:43,456 --> 00:18:46,226 but to me, it's the volatility and the instability 388 00:18:46,226 --> 00:18:48,295 that's even more concerning than just 389 00:18:48,295 --> 00:18:52,632 the pure temperature rise over time. 390 00:18:52,965 --> 00:18:56,869 Let's say that inflation were to go over the top, 391 00:18:56,869 --> 00:18:58,638 stock market crashes. 392 00:18:58,638 --> 00:19:01,107 Let's say there are all kinds of sanctions on exports. 393 00:19:01,107 --> 00:19:02,809 You can't even export your tech. 394 00:19:02,809 --> 00:19:04,143 You know, all you're left with, 395 00:19:04,143 --> 00:19:07,314 to survive is you and your environment. 396 00:19:07,314 --> 00:19:10,417 (grasshopper buzzing) 397 00:19:10,417 --> 00:19:12,151 - You know, one of my goals this year was actually 398 00:19:12,151 --> 00:19:15,154 to get more educated on climate change. 399 00:19:16,155 --> 00:19:19,426 And I took the path 400 00:19:19,426 --> 00:19:22,829 that I was gonna see both sides of the argument. 401 00:19:22,829 --> 00:19:25,164 And what was interesting to me was I could find 402 00:19:25,164 --> 00:19:29,436 very little in the climate denial space. 403 00:19:29,436 --> 00:19:32,772 The more I read, the more I see around me, 404 00:19:32,772 --> 00:19:34,674 the more I get concerned. 405 00:19:36,509 --> 00:19:38,945 - [Katie] The officials came out and said, 406 00:19:38,945 --> 00:19:41,180 we're gonna have to release the dams. 407 00:19:41,180 --> 00:19:43,283 And I remember looking at my husband 408 00:19:43,283 --> 00:19:48,187 and looking at my daughter and the dog and the house 409 00:19:48,187 --> 00:19:52,359 and thinking, am I in the middle of some movie? 410 00:19:54,160 --> 00:19:55,762 - So I'm 5.8. 411 00:19:55,762 --> 00:19:58,998 And the water reached to about right there. 412 00:20:00,533 --> 00:20:03,035 Until it happens to you, you don't, 413 00:20:03,035 --> 00:20:04,871 you don't believe that this can happen 414 00:20:04,871 --> 00:20:06,706 in the United States of America. 415 00:20:07,774 --> 00:20:10,777 And all of your financial stability is gone. 416 00:20:10,777 --> 00:20:13,045 So if we have, God forbid, 417 00:20:13,045 --> 00:20:15,047 any other emergency that comes up and believe me, 418 00:20:15,047 --> 00:20:18,551 that is a source of a traumatic kind of panic 419 00:20:18,551 --> 00:20:20,520 that sets in when we go, Oh, 420 00:20:20,520 --> 00:20:21,654 you know, what if something happens, 421 00:20:21,654 --> 00:20:22,889 what if there's another emergency that, 422 00:20:22,889 --> 00:20:25,224 that arises, then we have no funds. 423 00:20:28,561 --> 00:20:31,331 - Never did I ever imagine that everything 424 00:20:31,331 --> 00:20:35,868 that I would work so hard for would be taken 425 00:20:35,868 --> 00:20:38,705 from me in a matter of hours. 426 00:20:39,672 --> 00:20:42,509 And so I do believe that climate change 427 00:20:42,509 --> 00:20:45,011 is going to have a huge economic impact. 428 00:20:47,347 --> 00:20:51,518 And what wealth you have can be eradicated 429 00:20:51,518 --> 00:20:53,986 in a matter of hours. 430 00:20:53,986 --> 00:20:56,356 (soft music) 431 00:20:58,925 --> 00:21:02,595 (helicopter blades slapping) 432 00:21:02,595 --> 00:21:03,830 (helicopter engine revving) 433 00:21:03,830 --> 00:21:06,065 - We had a house up here on the hill 434 00:21:06,065 --> 00:21:07,534 that my wife wanted to get out of 435 00:21:07,534 --> 00:21:10,102 because it was dangerous for the fires, you know. 436 00:21:10,102 --> 00:21:11,604 - Yeah. 437 00:21:11,604 --> 00:21:12,772 And the climate change, everything's getting crispy, 438 00:21:12,772 --> 00:21:14,073 so we'd better get, 439 00:21:14,073 --> 00:21:16,676 to somewhere where we're not gonna get burned up. 440 00:21:16,676 --> 00:21:17,877 - Yeah. 441 00:21:17,877 --> 00:21:20,212 - So we moved to this beautiful place 442 00:21:20,212 --> 00:21:22,682 and the fire didn't get us. 443 00:21:22,682 --> 00:21:24,183 (laughs) 444 00:21:24,183 --> 00:21:26,686 But the debris flow after the fire wiped us out, man. 445 00:21:26,686 --> 00:21:31,123 We had like mud four feet here, huge rocks. 446 00:21:31,123 --> 00:21:32,258 - You were here, right? 447 00:21:32,258 --> 00:21:33,693 - Oh we were. - How did you get out? 448 00:21:33,693 --> 00:21:35,395 - Rescued by helicopter man. 449 00:21:35,395 --> 00:21:36,896 - Jesus. 450 00:21:36,896 --> 00:21:39,732 - I said, you know, I said, my wife, we, you got a sheet? 451 00:21:39,732 --> 00:21:41,200 And she said, yeah. 452 00:21:41,200 --> 00:21:43,302 I said, what are you gonna do with the sheets? 453 00:21:43,302 --> 00:21:45,271 I said, I'm gonna write, help out there, you know. 454 00:21:45,304 --> 00:21:47,807 She said maybe make it SOS, I say that's a good idea. 455 00:21:47,807 --> 00:21:49,075 (laughs) 456 00:21:49,075 --> 00:21:52,144 Went out there and drew SOS, in the mud. 457 00:21:52,144 --> 00:21:53,913 And pretty soon, (smacks) 458 00:21:53,913 --> 00:21:56,483 they come, they let a guy down, and they said, 459 00:21:56,483 --> 00:22:00,086 we weren't sure if it was a SOS or an area code, 460 00:22:00,086 --> 00:22:01,654 it looked like it could have been 805. 461 00:22:01,654 --> 00:22:03,556 And I said, well I gotta work on my esses man. 462 00:22:03,556 --> 00:22:04,991 (laughs) 463 00:22:04,991 --> 00:22:07,760 But we were lucky, you know, we could afford to... 464 00:22:07,760 --> 00:22:09,996 - Well people died, people died in this, right? 465 00:22:09,996 --> 00:22:14,501 - Oh! Terrible, people were washed right through our place. 466 00:22:14,501 --> 00:22:18,170 And we were the lucky ones. You know, we had the money, 467 00:22:18,170 --> 00:22:19,439 to refurbish this place. 468 00:22:19,439 --> 00:22:20,272 - I know, yeah. 469 00:22:20,272 --> 00:22:21,808 - But you know, imagine, 470 00:22:21,808 --> 00:22:23,843 people, you know, struggling all over the world 471 00:22:23,843 --> 00:22:25,144 with this climate change. 472 00:22:25,144 --> 00:22:27,980 - That's the way It starts it's, you read about it 473 00:22:27,980 --> 00:22:29,916 and It seems far away. 474 00:22:29,916 --> 00:22:32,919 But then something happens and bang it's right on you 475 00:22:32,919 --> 00:22:34,286 and it gets very personal. - That's right. 476 00:22:41,994 --> 00:22:45,865 - Hey, I hope you went quick, that's all I can say. 477 00:22:46,633 --> 00:22:48,200 I hope you went quick. 478 00:22:49,536 --> 00:22:50,970 Oh my gosh. 479 00:22:57,376 --> 00:22:58,878 Words can't describe it. 480 00:23:02,048 --> 00:23:03,550 Words can't describe it. 481 00:23:05,718 --> 00:23:08,788 - Global systems of finance are deeply connected 482 00:23:08,788 --> 00:23:10,723 and based on housing finance 483 00:23:10,723 --> 00:23:12,559 in places like the United States. 484 00:23:12,559 --> 00:23:16,162 So if you get in a situation where a homeowner, 485 00:23:16,162 --> 00:23:18,731 can't, can't pay an insurance premium, 486 00:23:18,731 --> 00:23:21,968 can't hold on to their mortgage, for that reason. 487 00:23:21,968 --> 00:23:23,903 Defaults on a mortgage, goes into foreclosure. 488 00:23:23,903 --> 00:23:26,072 You have kind of, your setting in motion, 489 00:23:26,072 --> 00:23:27,507 the sort of early parts of the story 490 00:23:27,507 --> 00:23:30,910 that we know is a very familiar one from 2007 and 2008. 491 00:23:30,910 --> 00:23:33,245 - And we're not particularly good, 492 00:23:33,245 --> 00:23:37,316 at preparing for difficult times way in the future, 493 00:23:37,316 --> 00:23:40,086 when in fact we've got difficult choices right now. 494 00:23:40,086 --> 00:23:42,254 - When you survey people in the U.S 495 00:23:42,254 --> 00:23:46,258 and in the UK about sources of stress, it's work and money. 496 00:23:46,258 --> 00:23:49,095 (slow jazz music) 497 00:23:50,262 --> 00:23:54,266 - Alexa, how do I solve our economic problems? 498 00:23:56,435 --> 00:23:58,404 - [Alexa] Sorry, I don't know that. 499 00:23:59,606 --> 00:24:03,743 - We're heading off the cliff, in terms of climate change. 500 00:24:03,743 --> 00:24:07,614 There's a real urgency on this now that cannot be denied. 501 00:24:07,614 --> 00:24:11,350 - I grew up in the heart of the military industrial complex. 502 00:24:11,350 --> 00:24:14,954 My father became a general, after I went off to college. 503 00:24:14,954 --> 00:24:16,923 I went to the foreign service school at Georgetown. 504 00:24:16,923 --> 00:24:20,860 Madeleine Albright was one of my advisors in college 505 00:24:20,860 --> 00:24:22,762 and I thought, I know how the world works. 506 00:24:22,762 --> 00:24:24,864 There are people in charge. There's some with a plan. 507 00:24:24,864 --> 00:24:26,365 There's someone running stuff. 508 00:24:26,365 --> 00:24:28,968 When my father was head of NATO and I got to go over there 509 00:24:28,968 --> 00:24:31,203 and visit and hear the kind of questions that senators 510 00:24:31,203 --> 00:24:33,439 and congressmen were coming up with. 511 00:24:33,439 --> 00:24:36,876 I realized, whoa, no one's running anything. 512 00:24:37,877 --> 00:24:41,914 And the mistake that the great majority of us make, 513 00:24:41,914 --> 00:24:46,152 is that, there are groups of people running things. 514 00:24:46,152 --> 00:24:49,121 Someone has a master plan, there's a cabal 515 00:24:49,121 --> 00:24:53,459 or a conspiracy behind it all that's running it. 516 00:24:53,459 --> 00:24:54,627 And it's just not the case. 517 00:24:54,627 --> 00:24:57,163 (fire roaring) 518 00:25:04,336 --> 00:25:07,006 (water burbles) 519 00:25:09,341 --> 00:25:10,610 - Hey Wes. 520 00:25:10,610 --> 00:25:11,844 - How was the conference? 521 00:25:11,844 --> 00:25:12,679 - Good. 522 00:25:12,679 --> 00:25:13,846 - Good. 523 00:25:13,846 --> 00:25:16,182 - No, I think, well I think they, 524 00:25:16,182 --> 00:25:18,618 I think they really wanted to hear what's going on 525 00:25:18,618 --> 00:25:20,486 and what the challenges are. 526 00:25:20,486 --> 00:25:21,420 - Yeah. 527 00:25:21,420 --> 00:25:23,355 - And that's what I gave them. 528 00:25:23,355 --> 00:25:25,658 - Kind of reading this thing about Venezuela you see. 529 00:25:25,658 --> 00:25:28,260 What happens when an economy collapses. 530 00:25:28,260 --> 00:25:29,762 - Total collapse. 531 00:25:29,762 --> 00:25:33,265 - I mean, is it, was it just initially the oil prices or... 532 00:25:33,265 --> 00:25:36,603 - They've tried to make it a populist democracy. 533 00:25:36,603 --> 00:25:39,505 You know, where now Maduro is, is a dictator, 534 00:25:39,505 --> 00:25:41,373 but you know, supposedly people like him, 535 00:25:41,373 --> 00:25:44,376 but in an actual fact Cuba's in there. 536 00:25:44,376 --> 00:25:49,381 And I was down about six months ago in Colombia. 537 00:25:50,650 --> 00:25:53,352 And they were telling me that actually, 538 00:25:53,352 --> 00:25:56,723 the Cubans are going up to the Venezuelan army 539 00:25:56,723 --> 00:25:58,725 and they're disarming them, 540 00:25:58,725 --> 00:25:59,992 because they don't trust the Venezuelan. 541 00:25:59,992 --> 00:26:01,728 This is the way you take over a country. 542 00:26:01,728 --> 00:26:02,995 You're getting rid of, 543 00:26:02,995 --> 00:26:04,697 you know, you put your security forces in, 544 00:26:04,697 --> 00:26:08,134 and then you build up your extra military force. 545 00:26:08,134 --> 00:26:09,301 And then you go to the military 546 00:26:09,301 --> 00:26:11,337 that might be loyal to the country 547 00:26:11,337 --> 00:26:13,973 and say, give us your weapons. 548 00:26:13,973 --> 00:26:17,376 So a lot of Venezuelan militaries become refugees. 549 00:26:17,376 --> 00:26:18,310 - Oh wow. 550 00:26:18,577 --> 00:26:20,412 - They were disarmed and sent out of the country, yeah. 551 00:26:20,412 --> 00:26:23,082 And there's millions of people that are just there. 552 00:26:23,082 --> 00:26:24,416 They lived there, they were born there 553 00:26:24,416 --> 00:26:26,218 and they're struggling to survive. 554 00:26:27,419 --> 00:26:30,522 - It's a, I mean, we're heading in that direction already, 555 00:26:30,522 --> 00:26:33,092 before we've even had the economic breakdown. 556 00:26:33,826 --> 00:26:35,762 With armed groups in the streets. 557 00:26:35,762 --> 00:26:38,931 You had 20,000 armed people in the streets yesterday. 558 00:26:38,931 --> 00:26:40,900 - Well that was just a demonstration. 559 00:26:41,868 --> 00:26:45,437 - Brought guns, you don't bring guns to a demonstration, 560 00:26:46,706 --> 00:26:48,607 unless you're demonstrating you'd like to kill people 561 00:26:48,607 --> 00:26:50,209 that don't agree with you. 562 00:26:50,209 --> 00:26:52,745 - Venezuela can be an example of what happens 563 00:26:52,745 --> 00:26:54,080 when civil society breaks down 564 00:26:54,080 --> 00:26:55,782 because you don't have stable, 565 00:26:55,782 --> 00:26:57,616 transparent rule of law government, 566 00:26:57,616 --> 00:27:00,019 and you don't invest in your infrastructure the right way. 567 00:27:00,019 --> 00:27:01,754 In many ways, Venezuela is a leading indicator 568 00:27:01,754 --> 00:27:04,223 of the challenges that will face the whole world. 569 00:27:04,223 --> 00:27:08,227 - [Narrator] Many like Erin Burgos feel they have no choice. 570 00:27:08,227 --> 00:27:12,431 (speaks in foreign language) 571 00:27:12,431 --> 00:27:15,968 What was once one of Latin America's wealthiest countries, 572 00:27:15,968 --> 00:27:19,271 is now its most chaotic and dangerous. 573 00:27:20,206 --> 00:27:20,973 (car honking) 574 00:27:21,240 --> 00:27:22,875 - But that's what happens in these countries. 575 00:27:22,875 --> 00:27:25,211 - But by these countries, you mean countries 576 00:27:25,211 --> 00:27:27,313 that have incompetent leadership. 577 00:27:28,580 --> 00:27:32,785 - Countries that are failing 578 00:27:32,785 --> 00:27:34,386 to take care of their people. 579 00:27:34,386 --> 00:27:37,824 But they compensate for that by, 580 00:27:37,824 --> 00:27:40,159 setting up repressive mechanisms, 581 00:27:40,159 --> 00:27:42,261 to ensure that they stay in power. (laughs) 582 00:27:42,261 --> 00:27:45,064 - I just worry about it happening in the United States. 583 00:27:45,064 --> 00:27:47,333 We have a country like Venezuela where the first thing 584 00:27:47,333 --> 00:27:50,102 that collapsed is their energy infrastructure. 585 00:27:50,102 --> 00:27:52,071 - Yeah. - And then now we're finding out 586 00:27:52,071 --> 00:27:54,440 that it's not just electrical 587 00:27:54,440 --> 00:27:58,010 and oil pumping now their water infrastructure is collapsing 588 00:27:58,010 --> 00:27:59,779 and this is a country that's tropical, 589 00:27:59,779 --> 00:28:01,447 that's filled with water. 590 00:28:01,447 --> 00:28:03,515 - The energy sector has not received the training 591 00:28:03,515 --> 00:28:05,251 or investment it needs, and the experts were kicked out. 592 00:28:05,251 --> 00:28:06,753 They said the energy sector 593 00:28:06,753 --> 00:28:08,587 in particular the oil sector is collapsing. 594 00:28:08,587 --> 00:28:11,523 And that was a major source of revenue for the country. 595 00:28:11,523 --> 00:28:14,360 At the same time, you have significant drought in a country 596 00:28:14,360 --> 00:28:15,527 that has a lot of water, 597 00:28:15,527 --> 00:28:16,763 which means the dams cannot produce 598 00:28:16,763 --> 00:28:17,997 the same electricity as they used to. 599 00:28:17,997 --> 00:28:19,698 So you have collapse of the electrical sector, 600 00:28:19,698 --> 00:28:21,968 along with the oil sector, along with civil society. 601 00:28:21,968 --> 00:28:23,202 And this means you also have 602 00:28:23,202 --> 00:28:24,370 collapsing water infrastructure, 603 00:28:24,370 --> 00:28:26,005 because even if you have the pipes, 604 00:28:26,005 --> 00:28:28,540 if you don't have electricity, you can't operate everything. 605 00:28:28,540 --> 00:28:30,943 So severe strain, which means food shortages, 606 00:28:30,943 --> 00:28:34,146 riots, lack of money, this is a major problem. 607 00:28:35,214 --> 00:28:37,049 United States and Europe is rich, 608 00:28:37,049 --> 00:28:39,852 but if we choose to under invest in our infrastructure 609 00:28:39,852 --> 00:28:42,688 and if we choose to not prepare for the future, 610 00:28:42,688 --> 00:28:44,957 we could suffer these kinda consequences as well. 611 00:28:44,957 --> 00:28:47,493 - The impact of climate change 612 00:28:47,493 --> 00:28:49,896 is not a straight line function. 613 00:28:49,896 --> 00:28:51,730 It's clearly 614 00:28:52,064 --> 00:28:56,235 a progression that is accelerating 615 00:28:56,235 --> 00:28:59,405 in magnitude very dramatically. 616 00:28:59,405 --> 00:29:04,043 And so any lapse at this point in responding 617 00:29:04,043 --> 00:29:08,214 is going to have, I think, a critical impact 618 00:29:08,214 --> 00:29:10,917 down the road, much sooner than we would anticipate. 619 00:29:10,917 --> 00:29:12,418 - This is a crisis waiting to happen. 620 00:29:12,418 --> 00:29:14,753 It's a slow moving crisis in front of our eyes. 621 00:29:16,555 --> 00:29:18,324 - So when you see in a movie, 622 00:29:18,324 --> 00:29:20,259 an asteroid's gonna hit us in six months, 623 00:29:20,259 --> 00:29:22,594 but Mr. President we've been working 624 00:29:22,594 --> 00:29:25,031 on this potential problem for six years. 625 00:29:26,765 --> 00:29:30,169 In real life the asteroid takes everybody out. 626 00:29:30,169 --> 00:29:31,904 The same goes for climate change. 627 00:29:31,904 --> 00:29:34,540 The same goes for a whole host of issues we have 628 00:29:34,540 --> 00:29:37,844 because when people see something on TV 629 00:29:37,844 --> 00:29:41,547 and look, politics is a confidence game. 630 00:29:41,547 --> 00:29:42,949 When people look at the politician and they go, 631 00:29:42,949 --> 00:29:44,583 he must know what he's talking about 632 00:29:44,583 --> 00:29:46,452 or she must know what she's talking about. 633 00:29:46,452 --> 00:29:49,688 That doesn't mean there's an actual plan with any kind 634 00:29:49,688 --> 00:29:54,026 of systemic machinery behind it to produce results. 635 00:29:54,026 --> 00:29:55,727 (upbeat music) 636 00:29:55,727 --> 00:29:57,463 - As the water start to recede 637 00:29:57,463 --> 00:30:00,099 the financial costs will add up. 638 00:30:00,099 --> 00:30:02,401 - Are you tired of living in a home like this 639 00:30:02,401 --> 00:30:05,071 when you really wanna be living in a home like this? 640 00:30:06,305 --> 00:30:07,473 Let's check it out. 641 00:30:09,575 --> 00:30:12,278 We've got tons of waterfront property, 642 00:30:12,278 --> 00:30:14,313 and more coming every day. 643 00:30:14,313 --> 00:30:17,249 Century 22 now serving parts of California. 644 00:30:18,317 --> 00:30:21,320 * Best sparkling drinks are just dandy * 645 00:30:21,320 --> 00:30:22,922 * The cho-- 646 00:30:23,555 --> 00:30:25,324 - For those of you that went to the mountain 647 00:30:25,324 --> 00:30:29,095 and enjoyed that 16 feet of brand new, fresh powder, 648 00:30:29,095 --> 00:30:30,396 nice job. 649 00:30:30,396 --> 00:30:32,999 But as you can see, we've got a hot front coming in, 650 00:30:32,999 --> 00:30:37,003 so tomorrow there's gonna be 155 degrees Fahrenheit. 651 00:30:37,003 --> 00:30:39,906 So you might wanna break out those Speedos. 652 00:30:39,906 --> 00:30:43,075 - You read the big article about Peter Teal, 653 00:30:43,075 --> 00:30:46,345 who's the guy who's made the big fortune off tech, 654 00:30:46,345 --> 00:30:49,848 has bought and built bunkers in New Zealand, right? 655 00:30:50,749 --> 00:30:53,685 Because their plan is we're all gonna die, 656 00:30:53,685 --> 00:30:56,355 and then they're gonna ride it out somehow 657 00:30:56,355 --> 00:30:57,924 even though they won't. 658 00:30:57,924 --> 00:31:00,759 But there's the belief that their money will insulate 659 00:31:00,759 --> 00:31:02,361 and shelter them from what's coming 660 00:31:02,361 --> 00:31:03,996 and for all these people-- - For climate change 661 00:31:03,996 --> 00:31:07,533 - Who predicted doomsday. 662 00:31:08,600 --> 00:31:10,536 - Yeah I mean, I've heard, you know, 663 00:31:10,536 --> 00:31:13,472 I've heard climate change likened to a world war. 664 00:31:15,474 --> 00:31:19,378 You know, the difference is that we know a lot more 665 00:31:19,378 --> 00:31:20,779 about what's coming. 666 00:31:20,779 --> 00:31:23,649 - Come on down to our luxury survival condo 667 00:31:23,649 --> 00:31:26,018 and don't let the Armageddon get you down. 668 00:31:28,820 --> 00:31:31,457 - So unless you can produce thousands of years 669 00:31:31,457 --> 00:31:36,328 worth of water and air and food in your underground bunker, 670 00:31:36,328 --> 00:31:37,696 you're not gonna make it. 671 00:31:37,696 --> 00:31:39,665 And the most likely outcome will be that 672 00:31:39,665 --> 00:31:42,868 the construction workers probably non-union 673 00:31:42,868 --> 00:31:44,870 that you paid to build this bunker for you 674 00:31:44,870 --> 00:31:46,638 know exactly where it is. 675 00:31:46,638 --> 00:31:49,641 And they have access to all the tools to dig you out of it 676 00:31:49,641 --> 00:31:50,977 like a truffle. 677 00:31:52,144 --> 00:31:56,582 The sooner people start using their money as a tool, 678 00:31:56,582 --> 00:31:58,250 instead of a goal in life, 679 00:31:58,250 --> 00:32:00,352 the faster we're gonna be able to dig ourselves 680 00:32:00,352 --> 00:32:01,153 out of this hole. 681 00:32:01,153 --> 00:32:02,921 - Okay, so dad, we've, 682 00:32:02,921 --> 00:32:04,256 I know you don't wanna pay attention 683 00:32:04,256 --> 00:32:05,757 and you don't wanna be... - I do. 684 00:32:05,757 --> 00:32:10,362 - Filmed with miniatures, because it could, you know, 685 00:32:10,362 --> 00:32:12,531 you don't wanna look like the guy in Dr. Strange Love 686 00:32:12,531 --> 00:32:13,732 or any other-- - Exactly. 687 00:32:13,732 --> 00:32:14,933 - Retired General playing with things-- 688 00:32:14,933 --> 00:32:16,202 - That's exactly what it looks like. 689 00:32:16,202 --> 00:32:18,704 - But, look, we need to set up something 690 00:32:18,704 --> 00:32:20,672 that people can understand how it works. 691 00:32:20,672 --> 00:32:25,377 We have like a grocery farmer, another store here 692 00:32:25,377 --> 00:32:29,115 a bank, a homeowner, and then emergency services 693 00:32:29,115 --> 00:32:31,117 and over here's like nature, 694 00:32:31,117 --> 00:32:33,719 or we'll even say foreign country 695 00:32:33,719 --> 00:32:35,087 or Africa, or somewhere else. 696 00:32:35,087 --> 00:32:39,058 So, but the first thing I gotta do is change 697 00:32:39,058 --> 00:32:40,126 how everything's set up, 698 00:32:40,126 --> 00:32:42,894 because we need the bank 699 00:32:43,795 --> 00:32:45,131 in between 700 00:32:46,398 --> 00:32:49,635 the country club and everybody else. 701 00:32:49,635 --> 00:32:53,972 - We have a huge financial system compared to what the, 702 00:32:53,972 --> 00:32:55,474 what I can call the real economy 703 00:32:55,474 --> 00:32:59,445 that is where people work and produce, and live. 704 00:32:59,445 --> 00:33:04,316 (upbeat music) (people chattering) 705 00:33:23,335 --> 00:33:26,472 - What we were talking about was trying to explain 706 00:33:26,472 --> 00:33:29,308 capital, structures and insurance 707 00:33:29,308 --> 00:33:32,944 and financing and mortgages using children's toys. 708 00:33:32,944 --> 00:33:34,780 So we have money-- - Is it gonna work? 709 00:33:34,780 --> 00:33:37,183 - I don't know if it's gonna work. (laughs) 710 00:33:38,684 --> 00:33:43,255 - First thing is, the grocery store is a business 711 00:33:43,255 --> 00:33:44,690 and it makes money, 712 00:33:44,690 --> 00:33:47,693 and they deposit the money in the bank. 713 00:33:47,693 --> 00:33:49,095 - Okay. Boom. 714 00:33:49,095 --> 00:33:50,096 - Okay? 715 00:33:50,096 --> 00:33:52,331 John works at the grocery store 716 00:33:52,331 --> 00:33:56,468 and he gets paid by the grocery store 717 00:33:56,468 --> 00:33:59,838 and he decides he wants to buy a house. 718 00:33:59,838 --> 00:34:01,107 - Okay. 719 00:34:01,107 --> 00:34:03,275 - He doesn't have enough money from his earnings 720 00:34:03,275 --> 00:34:06,112 to buy a house, but he goes to the bank and the bank said, 721 00:34:06,112 --> 00:34:09,348 "Oh we'll give you the money, to buy the house, 722 00:34:10,382 --> 00:34:14,985 and in return, you'll give us an IOU." 723 00:34:14,985 --> 00:34:17,556 (upbeat music) 724 00:34:19,056 --> 00:34:20,458 - We have to look at the house 725 00:34:20,458 --> 00:34:22,860 is it, does it pass inspection? 726 00:34:22,860 --> 00:34:24,295 - Yeah, pass inspection. 727 00:34:24,295 --> 00:34:27,166 - And can you afford it based on your monthly income? 728 00:34:27,166 --> 00:34:27,998 - Well, 729 00:34:28,967 --> 00:34:30,402 - The answer, say yes. 730 00:34:30,402 --> 00:34:31,503 - Yes. - Okay, good. 731 00:34:31,503 --> 00:34:33,038 So here's a mortgage. 732 00:34:33,038 --> 00:34:35,907 Okay, so here's the money and-- - And by the way, this is just 733 00:34:35,907 --> 00:34:37,509 like a real bank, because in the real bank, 734 00:34:37,509 --> 00:34:39,145 they're not sure can this guy pay for it? 735 00:34:39,145 --> 00:34:40,911 Just tell him yes, tell him yes, come on, 736 00:34:40,911 --> 00:34:42,681 lets get the money. - So it depends on paying. 737 00:34:42,681 --> 00:34:45,417 - We typically think that bank takes deposits from us 738 00:34:45,417 --> 00:34:46,918 and then lends it out. 739 00:34:46,918 --> 00:34:49,755 The balance sheet equates one entry on this side, 740 00:34:49,755 --> 00:34:52,257 another entry on that side, has sort of claims to come back, 741 00:34:52,257 --> 00:34:55,060 and if it's really comes back as expected, 742 00:34:55,060 --> 00:34:56,527 they make a return on that. 743 00:34:56,527 --> 00:34:58,697 And it's basically making money out of thin air. 744 00:34:59,331 --> 00:35:00,931 - In the old days, 745 00:35:00,931 --> 00:35:02,833 I would put this mortgage, and I would say, 746 00:35:02,833 --> 00:35:04,034 "This is an asset for me, 747 00:35:04,034 --> 00:35:05,603 "because you're gonna pay me every month 748 00:35:05,603 --> 00:35:07,239 "to pay this mortgage off," right? 749 00:35:07,239 --> 00:35:08,873 - So you're telling all your buddies you had that. 750 00:35:08,873 --> 00:35:10,442 - Well, I found a better way to make money, okay? 751 00:35:10,442 --> 00:35:15,214 So the bank takes the IOU, and the bank sells the IOU 752 00:35:16,114 --> 00:35:18,884 into the what's called the secondary market. 753 00:35:19,185 --> 00:35:22,020 - Okay. And it gets a fee for that. 754 00:35:22,020 --> 00:35:24,290 - Then once I have this mortgage and maybe the mortgage 755 00:35:24,290 --> 00:35:26,292 for many other houses in the neighborhood, 756 00:35:26,292 --> 00:35:28,627 and ideally from other neighborhoods as well, 757 00:35:28,627 --> 00:35:31,697 I throw this into what we call a special purpose vehicle, 758 00:35:31,697 --> 00:35:34,132 which really, in legal terms, is typically a trust 759 00:35:34,132 --> 00:35:37,303 or a corporation, these assets-shielding devices, 760 00:35:37,303 --> 00:35:39,205 and then you issue claims 761 00:35:39,205 --> 00:35:42,474 against these new legal shells to investors. 762 00:35:42,474 --> 00:35:45,210 (retro jazz music) 763 00:35:45,210 --> 00:35:50,216 - They package these IOUs up so there's many of them, 764 00:35:50,816 --> 00:35:54,653 and they sell them to people like insurance companies 765 00:35:55,554 --> 00:36:00,592 or foreign banks, and they can be leveraged. 766 00:36:00,592 --> 00:36:03,629 - Which means I can make loans off these things, 767 00:36:03,629 --> 00:36:04,830 which are loans. 768 00:36:04,830 --> 00:36:06,898 - Yes, because you have leverage here. 769 00:36:06,898 --> 00:36:08,967 So you can make more loans. 770 00:36:08,967 --> 00:36:11,737 So the system always generates cash. 771 00:36:11,737 --> 00:36:14,573 (water splashing) 772 00:36:15,674 --> 00:36:17,276 They can reduce their risk 773 00:36:17,276 --> 00:36:19,611 because they're not just buying a mortgage, 774 00:36:19,611 --> 00:36:21,179 they're buying a package of mortgages. 775 00:36:21,179 --> 00:36:23,449 In some cases, they're just buying a slice 776 00:36:23,449 --> 00:36:27,152 of the interest rate off a package of mortgages. 777 00:36:27,152 --> 00:36:30,522 And so, all of these are called derivatives. 778 00:36:30,522 --> 00:36:34,493 And everything works, as long as there's an expectation 779 00:36:34,493 --> 00:36:36,362 that the loan will be repaid, 780 00:36:36,362 --> 00:36:40,799 that John will, at the right time each month, 781 00:36:40,799 --> 00:36:45,371 give the bank money to pay down his share of the IOU. 782 00:36:45,371 --> 00:36:48,206 (old timey piano music) 783 00:36:48,206 --> 00:36:50,276 So the old way the banking system worked, 784 00:36:50,276 --> 00:36:53,044 it used to work that the banker would look you in the eye 785 00:36:53,044 --> 00:36:54,646 and say, "Are you credit worthy? 786 00:36:54,646 --> 00:36:55,881 "Can I trust you?" 787 00:36:59,217 --> 00:37:01,387 - The banks really aren't keeping 788 00:37:01,387 --> 00:37:03,054 the mortgages on their books anymore. 789 00:37:03,054 --> 00:37:05,123 They're selling those mortgages 790 00:37:05,123 --> 00:37:06,358 so that they can be repackaged 791 00:37:06,358 --> 00:37:08,827 as other kinds of financial instruments. 792 00:37:08,827 --> 00:37:11,530 So, they're able to sort of pass the buck, 793 00:37:11,530 --> 00:37:13,565 pass the risk off to the next person. 794 00:37:14,500 --> 00:37:18,036 - Depending on how they're rated by the rating agencies, 795 00:37:18,036 --> 00:37:21,407 these are reputable investment opportunities 796 00:37:21,407 --> 00:37:22,841 for retirement funds, sure. 797 00:37:22,841 --> 00:37:25,076 Yeah, pension funds, sure, put 'em in here. 798 00:37:25,076 --> 00:37:26,912 - So the investors are buying an interest 799 00:37:26,912 --> 00:37:29,247 in the cashflow that comes from the homeowners 800 00:37:29,247 --> 00:37:31,550 into the pool that we've created, 801 00:37:31,550 --> 00:37:33,652 but have sort of a claim against this house as well 802 00:37:33,652 --> 00:37:35,421 because this cashflow is backed 803 00:37:35,421 --> 00:37:37,356 by the mortgage against the home. 804 00:37:37,356 --> 00:37:40,191 So something as illiquid, as formidable 805 00:37:40,191 --> 00:37:41,760 as this building and the land it stands on 806 00:37:41,760 --> 00:37:44,930 can become a globally tradable financial asset 807 00:37:44,930 --> 00:37:46,598 through appropriate legal coding. 808 00:37:49,568 --> 00:37:50,869 - This is your loan. 809 00:37:50,869 --> 00:37:53,271 It travels through this system. 810 00:37:54,239 --> 00:37:55,173 The bank has the loan, 811 00:37:55,173 --> 00:37:56,107 (stamp smashing) 812 00:37:56,107 --> 00:37:58,176 sells it, it becomes a security. 813 00:37:58,176 --> 00:38:00,078 It becomes part of the balance sheet 814 00:38:00,078 --> 00:38:01,547 of money market mutual funds. 815 00:38:01,547 --> 00:38:05,083 These money market mutual funds then basically exchange 816 00:38:05,083 --> 00:38:07,786 your loan, your collateral, your house 817 00:38:07,786 --> 00:38:11,056 in a collateralized cash deal, and the whole purpose 818 00:38:11,056 --> 00:38:13,525 of both the cash and the collateralized cash deal 819 00:38:13,525 --> 00:38:16,462 is that it allows the various actors 820 00:38:16,462 --> 00:38:18,730 to operate in derivative markets 821 00:38:18,730 --> 00:38:21,567 and make very high rates of short-term return. 822 00:38:22,801 --> 00:38:26,271 (wheels creaking) (bell dining) 823 00:38:26,271 --> 00:38:28,139 - Today, debt is treated like an asset. 824 00:38:28,139 --> 00:38:30,442 It can be traded globally, right? 825 00:38:30,442 --> 00:38:34,045 So we made a huge jump from let's say the 12th century 826 00:38:34,045 --> 00:38:37,148 when the first assignable notes came about, 827 00:38:37,148 --> 00:38:39,585 to treating debt as an asset 828 00:38:39,585 --> 00:38:42,888 that we can just trade on a global market. 829 00:38:47,225 --> 00:38:48,159 (slurping beverage) 830 00:38:48,159 --> 00:38:50,095 (jazzy piano music) 831 00:38:50,095 --> 00:38:53,131 - At the bottom, there's tangible value. 832 00:38:53,131 --> 00:38:57,603 The same value is used, not just one time, but two or three 833 00:38:57,603 --> 00:39:01,507 or four times in the financial sector trading. 834 00:39:02,674 --> 00:39:06,478 It is not going for productive investment in firms. 835 00:39:06,478 --> 00:39:09,615 It is also not going to finance and fund 836 00:39:09,615 --> 00:39:12,684 climate change mitigation and de-carbonization. 837 00:39:12,684 --> 00:39:15,020 Money creates more money. 838 00:39:15,020 --> 00:39:16,788 Wealth creates more wealth. 839 00:39:16,788 --> 00:39:18,990 And this is a circle, and it just rolls on. 840 00:39:19,758 --> 00:39:22,127 At the end of the day, it's our houses, 841 00:39:22,127 --> 00:39:25,330 the value of our houses, which are backing this up. 842 00:39:25,330 --> 00:39:27,866 The IMF has called it "the shadow banking system." 843 00:39:29,034 --> 00:39:31,369 "Shadow" here doesn't mean that it is illegal. 844 00:39:31,369 --> 00:39:34,506 It also doesn't mean that it is necessarily shady and so on. 845 00:39:34,506 --> 00:39:38,677 It is just that it is shadow because there are no rules. 846 00:39:38,677 --> 00:39:40,479 It's hardly any rules. 847 00:39:40,479 --> 00:39:44,716 It's sort of almost the Wild West of the financial sector 848 00:39:44,716 --> 00:39:48,186 (dramatic Western music) 849 00:39:49,721 --> 00:39:51,723 - And a problem with the derivative market 850 00:39:51,723 --> 00:39:52,991 is there is no market. 851 00:39:52,991 --> 00:39:55,326 So it's like one-on-one swaps between bankers. 852 00:39:55,326 --> 00:39:56,728 It's like you and I say, 853 00:39:56,728 --> 00:39:58,163 "Hey, I know what bank you're working for, 854 00:39:58,163 --> 00:40:00,398 "and so I've got some bonds, 855 00:40:00,398 --> 00:40:02,834 "and I want you to insure 'em for me 856 00:40:02,834 --> 00:40:04,503 "in case the interest rate changes. 857 00:40:04,503 --> 00:40:06,572 "Would you insure these bonds for me? 858 00:40:06,572 --> 00:40:07,673 "How much would you charge?" 859 00:40:07,673 --> 00:40:08,574 You tell me a price. 860 00:40:08,574 --> 00:40:10,676 I say, "That's a good deal. 861 00:40:10,676 --> 00:40:14,412 "I'll get a bonus for setting up the insurance. 862 00:40:14,412 --> 00:40:15,814 "You'll get a bonus 863 00:40:15,814 --> 00:40:18,149 "for taking in the money to do the insurance." 864 00:40:18,149 --> 00:40:19,685 - But I work at a different bank. 865 00:40:19,685 --> 00:40:20,919 - It's a good deal. 866 00:40:20,919 --> 00:40:22,153 - And I heard you just bought those. 867 00:40:22,153 --> 00:40:23,989 And I figure I could also get those, 868 00:40:23,989 --> 00:40:25,924 'cause I know a guy in Saudi Arabia or China 869 00:40:25,924 --> 00:40:28,259 that would pay two cents more, 870 00:40:28,259 --> 00:40:29,761 and I could make 50 grand off it. 871 00:40:29,761 --> 00:40:32,230 - You wind up so far from the underlying. 872 00:40:32,230 --> 00:40:34,600 - The thing is, it's like the old insurance principle, it's 873 00:40:34,600 --> 00:40:37,569 "How many people can insure one person's house"? 874 00:40:37,569 --> 00:40:41,507 Can each person in the neighborhood put a $100,000 policy 875 00:40:41,507 --> 00:40:43,709 on that house and each person collect $100,000 876 00:40:43,709 --> 00:40:46,277 when the $100,000 house burns down? 877 00:40:46,277 --> 00:40:47,879 (explosion roars) 878 00:40:47,879 --> 00:40:49,681 (fire crackling) 879 00:40:49,681 --> 00:40:52,283 (explosion booming) 880 00:40:52,283 --> 00:40:53,785 - As Americans, we're shortsighted, 881 00:40:53,785 --> 00:40:55,386 and we don't think long-term 882 00:40:55,386 --> 00:40:57,388 and financial literacy was not this complicated 883 00:40:57,388 --> 00:40:59,357 100 years ago. You had a little bit of money, 884 00:40:59,357 --> 00:41:00,792 and probably didn't even have a bank account. 885 00:41:00,792 --> 00:41:02,393 You paid your bills, and you passed bills around. 886 00:41:02,393 --> 00:41:03,729 - And you kept it under the mattress. 887 00:41:03,729 --> 00:41:05,030 - Right, or you kept it under the mattress. 888 00:41:05,030 --> 00:41:06,064 Shh, that's not where mine's at. 889 00:41:06,264 --> 00:41:09,635 - The critical derivatives for our financial markets today 890 00:41:09,635 --> 00:41:12,971 are actually the ones that brought down the financial system 891 00:41:12,971 --> 00:41:16,274 in 2008 were the credit default swaps 892 00:41:16,274 --> 00:41:18,644 and the collateralized debt obligations. 893 00:41:18,644 --> 00:41:20,979 And the credit default swap is basically 894 00:41:20,979 --> 00:41:23,915 a kind of an insurance contract, 895 00:41:23,915 --> 00:41:27,085 which basically says, "If some assets in the markets 896 00:41:27,085 --> 00:41:31,389 "decline in value, the insurer has to pay me a fee." 897 00:41:31,389 --> 00:41:34,492 And the beauty of the CDS, the credit default swap, 898 00:41:34,492 --> 00:41:38,463 was that you didn't have to hold the asset yourself. 899 00:41:38,463 --> 00:41:40,932 (fire crackling) 900 00:41:40,932 --> 00:41:42,167 It's like me taking out 901 00:41:42,167 --> 00:41:44,936 a fire insurance on my neighbor's house, 902 00:41:44,936 --> 00:41:47,739 and if that house burns down, I get the premium. 903 00:41:47,739 --> 00:41:50,676 - The value of these financial transactions 904 00:41:50,676 --> 00:41:55,246 is much, much larger than the tangible, real capital, 905 00:41:55,246 --> 00:41:57,683 which is basically the houses of the families, 906 00:41:57,683 --> 00:41:59,685 the households, the notional value 907 00:41:59,685 --> 00:42:02,588 of the derivative market is $600 trillion. 908 00:42:03,354 --> 00:42:05,957 And that is about let's say, 909 00:42:05,957 --> 00:42:08,627 eight to 10 times as large as global GDP. 910 00:42:16,434 --> 00:42:18,203 - So an American city with 911 00:42:18,203 --> 00:42:19,771 how many trillions of dollars 912 00:42:19,771 --> 00:42:21,840 of real estate value right there, 913 00:42:21,840 --> 00:42:23,609 or at least hundreds of billions, 914 00:42:23,609 --> 00:42:25,310 will no longer be there. 915 00:42:25,310 --> 00:42:26,544 Like, how does that work? 916 00:42:26,544 --> 00:42:27,979 How does that work in the banking sector? 917 00:42:27,979 --> 00:42:29,380 How does that work in the insurance market, 918 00:42:29,380 --> 00:42:30,782 the re-insurance market, 919 00:42:33,118 --> 00:42:35,621 what's been collateralized off that real estate? 920 00:42:35,621 --> 00:42:38,389 - This is not just different actors, 921 00:42:38,389 --> 00:42:40,391 exchanging in different markets 922 00:42:40,391 --> 00:42:43,795 or in different legal transactions, 923 00:42:43,795 --> 00:42:48,734 our financial system is such that we have huge banks, 924 00:42:48,734 --> 00:42:51,903 mega banks, too big to fail banks, 925 00:42:51,903 --> 00:42:56,808 very often operating both sides of the same market. 926 00:42:56,808 --> 00:43:00,812 - The big banks, they don't necessarily know how much risk 927 00:43:00,812 --> 00:43:03,982 their counterparty bank in some other country 928 00:43:03,982 --> 00:43:05,516 is willing to undertake. - No one really 929 00:43:05,516 --> 00:43:08,053 understands the legal interdependencies 930 00:43:08,053 --> 00:43:10,088 that are built into these contracts, 931 00:43:10,088 --> 00:43:11,857 and that can ultimately bring down 932 00:43:11,857 --> 00:43:13,424 the entire financial system. 933 00:43:13,424 --> 00:43:17,095 - The system is so complicated 934 00:43:17,095 --> 00:43:19,731 that the accountability is lost. 935 00:43:19,731 --> 00:43:21,933 - So the real value is actually here. 936 00:43:22,000 --> 00:43:23,434 These are all the transactions 937 00:43:23,434 --> 00:43:26,237 which are built on top of the real economy. 938 00:43:28,774 --> 00:43:31,242 (soft music) 939 00:43:58,636 --> 00:44:00,806 - Then there's Dougherty. 940 00:44:00,806 --> 00:44:03,274 The small town of Dougherty is not, 941 00:44:03,274 --> 00:44:04,976 not a whole lot there today. 942 00:44:09,547 --> 00:44:13,819 Just it was a town that once had a general store 943 00:44:13,819 --> 00:44:16,221 when I was growing up, had the church, 944 00:44:18,489 --> 00:44:21,459 had a post office, but you know, not anymore. 945 00:44:26,497 --> 00:44:29,600 - Agriculture and rural America has gotten a preview 946 00:44:29,600 --> 00:44:30,969 of the automation that's about to hit 947 00:44:30,969 --> 00:44:34,105 the rest of the country in the next 10 years. 948 00:44:34,105 --> 00:44:37,675 - We're here at the town square in Dewitt, Arkansas. 949 00:44:37,675 --> 00:44:39,811 And if you look around, I mean 950 00:44:39,811 --> 00:44:42,848 there's not a ton of bustling businesses here, 951 00:44:42,848 --> 00:44:44,515 but one of the busiest businesses 952 00:44:44,515 --> 00:44:46,251 is Department of Human Services. 953 00:44:46,617 --> 00:44:48,019 (soft music) 954 00:44:48,253 --> 00:44:52,858 So when we define the real economy, let's not forget farms. 955 00:44:52,858 --> 00:44:56,461 88% are still small family farms. 956 00:44:56,461 --> 00:44:59,630 - So this is a grain storage bin 957 00:44:59,630 --> 00:45:02,934 on my parents' family farm. 958 00:45:02,934 --> 00:45:05,370 (soft music) 959 00:45:12,377 --> 00:45:14,712 - This is my dad's place. 960 00:45:15,546 --> 00:45:18,884 He's gonna be 87, mom's 85. 961 00:45:18,884 --> 00:45:21,386 They've lived here since 1956. 962 00:45:24,222 --> 00:45:29,727 So, a lot of years. 963 00:45:31,729 --> 00:45:33,331 - And we are a team. 964 00:45:37,302 --> 00:45:40,705 - How many times you have to have intense rains, 965 00:45:40,705 --> 00:45:44,475 heat spells, freezings at the wrong point to get the crops 966 00:45:44,475 --> 00:45:46,744 to not come in once? 967 00:45:46,744 --> 00:45:49,881 - We do protect our farmers, we give them crop insurance 968 00:45:49,881 --> 00:45:52,183 and the crop insurance is subsidized. 969 00:45:52,183 --> 00:45:54,752 We have agricultural extension services, 970 00:45:54,752 --> 00:45:56,587 and they pay for that, but they probably don't pay 971 00:45:56,587 --> 00:45:57,722 the full cost of that. 972 00:45:58,656 --> 00:46:00,658 It's a free market economy but, 973 00:46:00,658 --> 00:46:02,427 it's also a national security issue. 974 00:46:08,934 --> 00:46:12,237 (birds chirping) 975 00:46:12,237 --> 00:46:13,604 - Federal crop insurance program 976 00:46:13,604 --> 00:46:16,274 was started as a response to the effects 977 00:46:16,274 --> 00:46:18,743 of the dust bowl and the Great Depression. 978 00:46:18,743 --> 00:46:21,412 Many, many areas throughout the United States were, 979 00:46:21,412 --> 00:46:24,615 were severely affected by the Dust Bowl, 980 00:46:24,615 --> 00:46:26,952 many farmers lost everything. 981 00:46:26,952 --> 00:46:28,954 In addition to most of America 982 00:46:28,954 --> 00:46:30,555 being devastated by the depression, 983 00:46:30,555 --> 00:46:34,893 farmers acutely suffered during that time. 984 00:46:36,761 --> 00:46:39,364 (somber music) 985 00:46:45,570 --> 00:46:47,272 Many parts of the plains 986 00:46:47,272 --> 00:46:50,575 were just completely filled with dust. 987 00:46:50,575 --> 00:46:53,979 Many crops were lost due to the weather, 988 00:46:53,979 --> 00:46:56,481 the extreme weather, due to insects. 989 00:46:59,650 --> 00:47:02,153 (somber music) 990 00:47:12,163 --> 00:47:14,332 - But it's the large scale like my dad said, 991 00:47:14,332 --> 00:47:17,435 the large scale events that everybody kinda worries about, 992 00:47:17,435 --> 00:47:19,004 like a big drought. 993 00:47:24,509 --> 00:47:28,179 - I think that our aquifer in some places 994 00:47:28,179 --> 00:47:32,951 is down to like 20% and then a lot of places at 50%, 995 00:47:32,951 --> 00:47:35,420 and we're actually using more water than 996 00:47:36,521 --> 00:47:38,289 we have at any other time. 997 00:47:40,191 --> 00:47:42,627 We have our pumping plants in 998 00:47:42,627 --> 00:47:44,862 and we're building on canals 999 00:47:44,862 --> 00:47:46,998 and this is actually the first phase. 1000 00:47:46,998 --> 00:47:50,668 We're trying to get water to this, this Indian bio 1001 00:47:50,668 --> 00:47:55,673 and then we're gonna use that for the main water supply. 1002 00:47:56,607 --> 00:47:59,544 In Arkansas, we're gonna have a drought event, 1003 00:47:59,544 --> 00:48:01,046 every growing season. 1004 00:48:02,647 --> 00:48:04,715 It doesn't matter, if we just came 1005 00:48:04,715 --> 00:48:06,851 like this last flood that we had here, 1006 00:48:06,851 --> 00:48:09,054 as soon as we came out of that flood event, 1007 00:48:09,054 --> 00:48:15,660 we were irrigating because our soil is, it's not real deep. 1008 00:48:15,793 --> 00:48:18,196 We have what they call a hard pan underneath it, 1009 00:48:18,196 --> 00:48:19,897 pretty close to the surface 1010 00:48:19,897 --> 00:48:21,399 - Which helps with the rice growing. 1011 00:48:21,399 --> 00:48:22,733 - Yes, very helpful. 1012 00:48:24,569 --> 00:48:26,972 It just gets more expensive every day. 1013 00:48:26,972 --> 00:48:28,473 We thought we were gonna have 1014 00:48:28,473 --> 00:48:31,342 a lot of infrastructure money maybe to come about, 1015 00:48:31,342 --> 00:48:33,644 but it hasn't come about. 1016 00:48:33,644 --> 00:48:35,746 - And its federal infrastructure money that coming? 1017 00:48:35,746 --> 00:48:38,249 - Well, the way that was originally set up was that, 1018 00:48:38,249 --> 00:48:44,489 the federal government was gonna be responsible for 65% 1019 00:48:44,489 --> 00:48:48,759 the state 10, and our local district, 25. 1020 00:48:48,759 --> 00:48:50,761 And there's a lot of people benefit from this 1021 00:48:50,761 --> 00:48:52,430 other than just the farmers, 1022 00:48:52,430 --> 00:48:55,333 but that's, who's got to pay for it 1023 00:48:55,333 --> 00:48:56,734 'cause those are only the ones 1024 00:48:56,734 --> 00:48:58,336 that's actually using the water. 1025 00:49:00,205 --> 00:49:01,606 - And I'm assuming we'll have to do 1026 00:49:01,606 --> 00:49:03,341 a whole bunch of stuff like that. 1027 00:49:03,341 --> 00:49:07,778 As temperature rises and rain patterns change. 1028 00:49:07,778 --> 00:49:10,348 When every person we've talked to about farming 1029 00:49:10,348 --> 00:49:12,117 and different methods of farming 1030 00:49:12,117 --> 00:49:17,122 whether it's till or no till or organic or not. 1031 00:49:17,122 --> 00:49:18,123 (tractor engine purring) 1032 00:49:18,123 --> 00:49:19,757 Each piece of land is different. 1033 00:49:20,558 --> 00:49:23,128 And each little community is different. 1034 00:49:23,128 --> 00:49:25,096 And the ecosystem there is different. 1035 00:49:25,096 --> 00:49:28,633 So how can a giant JP Morgan, 1036 00:49:28,633 --> 00:49:32,137 how can they service a community like this? 1037 00:49:32,137 --> 00:49:35,140 - Well, and why would they want to? - Yeah. 1038 00:49:35,140 --> 00:49:36,974 - That's the rest of the story. 1039 00:49:36,974 --> 00:49:38,309 I mean, that's not gonna be a profit center 1040 00:49:38,309 --> 00:49:40,278 for them to come out here and look at a man 1041 00:49:40,278 --> 00:49:43,281 that's farming 2,000, 3,000 acres. 1042 00:49:43,281 --> 00:49:47,985 They're looking for 20, 50,000 acre farms 1043 00:49:47,985 --> 00:49:51,822 to where they can justify spending some time on them. 1044 00:49:52,657 --> 00:49:55,726 - The relationships with the banks they've gotten big too. 1045 00:49:55,726 --> 00:49:57,328 But it used to be these smaller banks 1046 00:49:57,328 --> 00:50:02,267 and they knew your dad and his dad. 1047 00:50:02,267 --> 00:50:04,835 If you went to a farm sale and "Hey I liked this tractor." 1048 00:50:04,835 --> 00:50:07,838 and it was $27,000. 1049 00:50:07,838 --> 00:50:10,075 You just call the bank and say, "Hey, I need it." 1050 00:50:10,075 --> 00:50:11,509 "Okay, it's in your account." 1051 00:50:11,509 --> 00:50:14,011 (gentle foreboding music) 1052 00:50:14,011 --> 00:50:18,516 - 60 years ago if you made a crop, you made money period. 1053 00:50:18,516 --> 00:50:21,819 If you made a crop, you paid all your bills 1054 00:50:21,819 --> 00:50:23,521 and you could send your kids to school 1055 00:50:23,521 --> 00:50:25,190 and you buy your groceries. 1056 00:50:25,190 --> 00:50:26,491 You were okay. 1057 00:50:27,125 --> 00:50:31,196 Today, you can make a crop and lose your assets. 1058 00:50:31,196 --> 00:50:34,499 (gentle ominous music) 1059 00:50:36,101 --> 00:50:38,035 (tractor engine revving) 1060 00:50:38,035 --> 00:50:41,672 - Everybody out here, it's all family and, 1061 00:50:44,375 --> 00:50:49,046 I mean, if you were 30 years ago when we did this 1062 00:50:49,046 --> 00:50:54,285 we get all, a combine was $35,000. 1063 00:50:54,819 --> 00:51:00,291 And now a combine is $400,000. 1064 00:51:00,491 --> 00:51:03,961 (light airy music) 1065 00:51:03,961 --> 00:51:06,464 - When you're looking at machines that, 1066 00:51:06,464 --> 00:51:08,199 so by the time you have your headers 1067 00:51:08,199 --> 00:51:10,168 and your everything to go with it 1068 00:51:10,168 --> 00:51:13,070 being upward close to half a million dollars. 1069 00:51:15,072 --> 00:51:16,741 Where else is someone else buying 1070 00:51:16,741 --> 00:51:18,543 half a million dollar equipment 1071 00:51:18,543 --> 00:51:21,379 and I'm barely making ends meet. 1072 00:51:21,379 --> 00:51:24,749 (tractor engine revving) 1073 00:51:25,750 --> 00:51:28,219 It gets more challenging every year. 1074 00:51:28,219 --> 00:51:34,525 - The cost of production and agricultural costs 1075 00:51:34,659 --> 00:51:38,363 or just to be a farmer and even a small farmer 1076 00:51:38,363 --> 00:51:39,997 are almost cost prohibitive 1077 00:51:39,997 --> 00:51:43,868 unless your family has been in farming for generations. 1078 00:51:43,868 --> 00:51:47,205 - Thank God almighty for such a good looking crop 1079 00:51:47,938 --> 00:51:51,008 while others have had to struggle. 1080 00:51:51,008 --> 00:51:52,243 (light airy music) 1081 00:51:52,243 --> 00:51:53,544 - Oh, here's some fellows. 1082 00:51:53,544 --> 00:51:55,680 - Yeah, that's who we're riding with. 1083 00:51:55,680 --> 00:51:56,947 Y'all be riding with him. 1084 00:51:56,947 --> 00:51:59,684 (phone ringing) 1085 00:51:59,684 --> 00:52:01,686 (indistinct) 1086 00:52:01,686 --> 00:52:03,020 Alright, thanks Zach. 1087 00:52:03,020 --> 00:52:04,289 See you there. 1088 00:52:04,289 --> 00:52:07,358 (tractor engine revving) 1089 00:52:07,358 --> 00:52:09,227 - Farms are similar to owning a house. 1090 00:52:09,227 --> 00:52:10,961 You've gotta clean the gutters. 1091 00:52:10,961 --> 00:52:13,364 You've gotta sweep the sidewalk. 1092 00:52:13,364 --> 00:52:14,765 And the same thing with a farm 1093 00:52:14,765 --> 00:52:17,968 you've got certain maintenance that have to be done 1094 00:52:17,968 --> 00:52:20,471 on annual basis to keep it in a working order. 1095 00:52:22,407 --> 00:52:26,377 - Before automation, everything in here is handwritten. 1096 00:52:27,278 --> 00:52:29,780 - 24th, 1955. 1097 00:52:29,780 --> 00:52:31,449 - Yep. And everyday... 1098 00:52:31,449 --> 00:52:33,451 - And that's everything that happened during that day 1099 00:52:33,451 --> 00:52:34,885 all the money that came in. 1100 00:52:34,885 --> 00:52:36,654 - They made four loans. 1101 00:52:36,654 --> 00:52:39,324 Like this is, these are the loans that we made that day. 1102 00:52:39,324 --> 00:52:44,262 And you see the size of the loans; $150, $500. 1103 00:52:44,262 --> 00:52:45,896 - The countryside across America 1104 00:52:45,896 --> 00:52:48,299 not just in our rural community but other rural communities 1105 00:52:48,299 --> 00:52:51,168 used to have a lot of small community banks 1106 00:52:51,168 --> 00:52:55,005 that were very plugged into their communities 1107 00:52:55,005 --> 00:52:56,474 and to the people that live there. 1108 00:52:56,474 --> 00:52:57,675 And trying to help them 1109 00:52:57,675 --> 00:52:59,810 grow their businesses and their lives. 1110 00:52:59,810 --> 00:53:03,514 So just afraid of what the landscape holds going forward. 1111 00:53:03,514 --> 00:53:05,015 You're just a number, 1112 00:53:05,015 --> 00:53:07,117 you're CUSIP number on a bond security 1113 00:53:07,117 --> 00:53:09,119 and here's where you mail your check now. 1114 00:53:09,119 --> 00:53:12,357 - It's getting harder and harder for those farmers 1115 00:53:12,357 --> 00:53:15,826 to stay in business because they cannot get the funding. 1116 00:53:15,826 --> 00:53:19,997 Because with each year of them incurring loss 1117 00:53:19,997 --> 00:53:22,032 and then no hope of... 1118 00:53:22,967 --> 00:53:25,503 The prices don't get better the next year 1119 00:53:25,503 --> 00:53:28,939 regardless of the type of natural disasters 1120 00:53:28,939 --> 00:53:30,375 and things that happen. 1121 00:53:30,375 --> 00:53:32,277 And so the farmer gets further and further behind 1122 00:53:32,277 --> 00:53:34,779 and we've had several farmers that are actually 1123 00:53:34,779 --> 00:53:36,013 going out of business. 1124 00:53:36,013 --> 00:53:37,214 They're having to sell their equipment 1125 00:53:37,214 --> 00:53:40,885 and turn the farm over to someone else to farm. 1126 00:53:40,885 --> 00:53:44,221 (gentle ominous music) 1127 00:53:44,221 --> 00:53:47,057 - It's actually something that I have no control over. 1128 00:53:47,057 --> 00:53:48,559 And none of us around in England, Arkansas 1129 00:53:48,559 --> 00:53:50,227 have any control over. 1130 00:53:53,398 --> 00:53:56,401 And at the last one, like in 2008 1131 00:53:56,401 --> 00:53:57,902 when they were saying that, 1132 00:53:57,902 --> 00:54:00,405 "The banks wouldn't have money to loan to your farmers." 1133 00:54:01,539 --> 00:54:03,908 And I had several farmers that were just 1134 00:54:03,908 --> 00:54:05,175 pulling their hair out. 1135 00:54:05,175 --> 00:54:07,211 They were just, "Are you gonna be able to loan me 1136 00:54:07,211 --> 00:54:08,913 enough money to finish this crop?" 1137 00:54:08,913 --> 00:54:10,180 And I finally told him, 1138 00:54:10,180 --> 00:54:11,682 "Just go home and watch Andy Griffith 1139 00:54:12,750 --> 00:54:15,886 and quit watching CNN and Fox." 1140 00:54:15,886 --> 00:54:19,089 And said, "You know, as far as I know 1141 00:54:19,089 --> 00:54:21,992 we're gonna have the money and we're gonna take care of you 1142 00:54:22,760 --> 00:54:27,932 and you need to quit watching all of those..." 1143 00:54:28,499 --> 00:54:29,867 - Stuff to scare you. 1144 00:54:29,867 --> 00:54:31,936 - Yeah. That you have no control over. 1145 00:54:31,936 --> 00:54:35,373 So a couple of weeks later, he came back and said, 1146 00:54:35,373 --> 00:54:36,707 "You know that was the best advice 1147 00:54:36,707 --> 00:54:39,076 I've gotten so far this year." 1148 00:54:39,076 --> 00:54:42,079 - The rainfall amounts, we don't get an inch anymore. 1149 00:54:42,079 --> 00:54:45,015 It's either three inches or nothing. 1150 00:54:45,015 --> 00:54:46,451 Everything is extremes. 1151 00:54:46,451 --> 00:54:49,720 (gentle ominous music) 1152 00:54:53,791 --> 00:54:57,795 (gentle foreboding music) 1153 00:54:57,795 --> 00:55:02,299 - Many of those restrictions on banks are being peeled back. 1154 00:55:02,299 --> 00:55:04,469 So we still have trading in derivatives. 1155 00:55:04,469 --> 00:55:07,405 It's not, we don't know what it is. 1156 00:55:07,405 --> 00:55:10,541 There's hundreds of trillions of dollars 1157 00:55:10,541 --> 00:55:15,546 maybe 600, maybe 800 trillions of dollars of derivatives 1158 00:55:15,713 --> 00:55:20,317 on currency exchanges that can't be covered. 1159 00:55:20,317 --> 00:55:22,920 (gentle ominous music) 1160 00:55:22,920 --> 00:55:24,321 - It's like after 1980s it was, 1161 00:55:24,321 --> 00:55:26,223 "Oh, Gordon Gekko is a great guy. 1162 00:55:26,223 --> 00:55:27,825 He taught us greed is good." 1163 00:55:27,825 --> 00:55:28,793 Look what it's gotten us. 1164 00:55:28,793 --> 00:55:30,395 - It's a cycle in America. 1165 00:55:30,395 --> 00:55:31,762 You have to create wealth. 1166 00:55:31,762 --> 00:55:33,163 You can't create wealth 1167 00:55:33,163 --> 00:55:35,966 by just taking it from other people through taxes. 1168 00:55:35,966 --> 00:55:37,968 People have to be incentivized to create wealth. 1169 00:55:38,002 --> 00:55:39,504 And this has been the great- - Okay, but wait a minute- 1170 00:55:39,504 --> 00:55:41,972 - This has been the great virtues 1171 00:55:41,972 --> 00:55:44,308 of Western democracy for 300 years... 1172 00:55:44,308 --> 00:55:46,944 - But it's also been the massively misunderstood. 1173 00:55:46,944 --> 00:55:50,748 So go back to the post-civil war United States 1174 00:55:50,748 --> 00:55:51,916 and the growth. 1175 00:55:51,916 --> 00:55:54,919 The growth was made off land 1176 00:55:54,919 --> 00:55:57,788 that people were literally killed and chased off of 1177 00:55:57,788 --> 00:56:01,492 and they're like, "Hey man, look at all this free land." 1178 00:56:01,692 --> 00:56:03,861 And that's how money was made. 1179 00:56:07,197 --> 00:56:10,267 - You have to resolve that we can do better going forward. 1180 00:56:12,036 --> 00:56:16,106 American capitalism can be pretty heartless. 1181 00:56:17,307 --> 00:56:18,976 If you look back at the American Civil War 1182 00:56:18,976 --> 00:56:21,045 and what happened right afterwards, 1183 00:56:21,045 --> 00:56:23,648 we industrialized America, we went into the Gilded Age. 1184 00:56:23,648 --> 00:56:26,451 People look at these "robber barons" and said, 1185 00:56:26,451 --> 00:56:27,852 "This can't last." 1186 00:56:27,852 --> 00:56:30,387 (somber music) 1187 00:56:31,722 --> 00:56:34,124 And we ended up in the progressive movement. 1188 00:56:36,326 --> 00:56:38,228 This is the age of Reagan. 1189 00:56:38,228 --> 00:56:40,297 The Reagan era was the relaxation 1190 00:56:40,297 --> 00:56:41,999 of the administrative state. 1191 00:56:41,999 --> 00:56:46,804 It was the sort of, let big firms get bigger. 1192 00:56:46,804 --> 00:56:48,405 It's let's make money. 1193 00:56:48,405 --> 00:56:49,707 Let's do it all with money. 1194 00:56:49,707 --> 00:56:51,909 Let's let charities take care of people. 1195 00:56:51,909 --> 00:56:53,911 Forget about government programs. 1196 00:56:53,911 --> 00:56:56,346 And that's run since Reagan was elected. 1197 00:56:57,815 --> 00:57:00,017 - Thank you very much. 1198 00:57:00,017 --> 00:57:01,519 - I was raised red. 1199 00:57:01,519 --> 00:57:03,688 I was raised in a red family. 1200 00:57:05,089 --> 00:57:07,191 I grew up in the '80s. 1201 00:57:07,191 --> 00:57:10,194 (upbeat '80s music) 1202 00:57:19,737 --> 00:57:22,439 Fell in love with Ronald Reagan. 1203 00:57:22,439 --> 00:57:23,841 I idolized Reagan. 1204 00:57:23,841 --> 00:57:27,077 I saw Reagan and I said, "I want his job." 1205 00:57:27,077 --> 00:57:31,115 In fact, my parents told me I mailed him a dollar bill. 1206 00:57:31,115 --> 00:57:35,252 I defaced the dollar bill with my picture on it. 1207 00:57:35,252 --> 00:57:38,789 - The maxim is, Doveryai, no proveryai 1208 00:57:38,789 --> 00:57:41,125 trust but verify. 1209 00:57:41,125 --> 00:57:43,561 (audience laughing) 1210 00:57:43,628 --> 00:57:45,630 - [Translator] (speaking foreign language) 1211 00:57:45,630 --> 00:57:47,798 - (speaking foreign language) 1212 00:57:47,798 --> 00:57:49,967 - [Translator] You repeat that at every meeting. 1213 00:57:49,967 --> 00:57:51,602 (audience laughing) 1214 00:57:51,602 --> 00:57:54,138 - But I wanted to be in politics. 1215 00:57:54,138 --> 00:57:57,542 I wanted to be the first woman, president of United States. 1216 00:57:57,542 --> 00:57:59,209 I thought it was fascinating. 1217 00:57:59,209 --> 00:58:00,878 - We can leave our children 1218 00:58:00,878 --> 00:58:05,082 with an unrepayable, massive debt and shattered economy 1219 00:58:05,082 --> 00:58:07,484 or we can leave them liberty 1220 00:58:07,484 --> 00:58:09,486 in a land where every individual 1221 00:58:09,486 --> 00:58:12,823 has the opportunity to be whatever God intended us to be. 1222 00:58:14,892 --> 00:58:17,061 - People like to say economics is a science 1223 00:58:17,061 --> 00:58:19,564 but it really follows politics. 1224 00:58:19,564 --> 00:58:23,668 Keynes came out and looked at it, he saw the political need. 1225 00:58:23,668 --> 00:58:26,003 That's how we understood macroeconomics. 1226 00:58:26,003 --> 00:58:27,237 Friedman came out and looked at it 1227 00:58:27,237 --> 00:58:29,674 and he saw deficit spending 1228 00:58:29,674 --> 00:58:33,243 and he saw government control and he saw high taxes, 1229 00:58:33,243 --> 00:58:34,745 and he said, there has to be a better way. 1230 00:58:34,745 --> 00:58:37,848 He reinvented classical economics. 1231 00:58:37,848 --> 00:58:40,017 They called it Neoliberal Economics. 1232 00:58:40,017 --> 00:58:43,153 - Quoted Milton Friedman and said that, 1233 00:58:43,153 --> 00:58:46,657 that how the economy of the United States 1234 00:58:46,657 --> 00:58:51,195 oughta be judged by the number of imports that we have 1235 00:58:51,195 --> 00:58:52,462 and not exports. 1236 00:58:52,462 --> 00:58:55,199 And I thought maybe this was a typo or something. 1237 00:58:55,933 --> 00:59:00,037 And so I asked him, I said, "I mean, are you for real?" 1238 00:59:00,037 --> 00:59:03,307 - Trickle-down economics starts in 1980. 1239 00:59:03,307 --> 00:59:04,208 It's right around in there. 1240 00:59:04,208 --> 00:59:05,976 Late '70s, we get into it. 1241 00:59:05,976 --> 00:59:07,945 But the bottom line is, has two parts to it. 1242 00:59:07,945 --> 00:59:09,714 First fire the cops. 1243 00:59:09,714 --> 00:59:12,049 Not the cops on Main Street, the cops on Wall Street. 1244 00:59:12,049 --> 00:59:13,217 Turn them loose. 1245 00:59:13,217 --> 00:59:15,385 Let those banks do whatever they wanna do. 1246 00:59:15,385 --> 00:59:19,690 - And so here we are now, 40 years into the age of Reagan 1247 00:59:19,690 --> 00:59:21,892 and people are looking at what it's done, okay. 1248 00:59:21,892 --> 00:59:23,894 It's made a lot of people really wealthy. 1249 00:59:24,328 --> 00:59:28,032 We won the Cold War during that period. 1250 00:59:28,032 --> 00:59:31,802 Not necessarily because of that, but we won the Cold War. 1251 00:59:31,802 --> 00:59:36,340 And America became this supreme power. 1252 00:59:36,340 --> 00:59:39,576 But for the people of America, it hasn't been so good. 1253 00:59:39,576 --> 00:59:41,545 - I know, their real wages went down. 1254 00:59:41,545 --> 00:59:44,414 - Real wages went down and people in this country look back 1255 00:59:44,414 --> 00:59:45,716 and they wanna make America 1256 00:59:45,716 --> 00:59:47,584 as great as it was in the 1950s. 1257 00:59:47,584 --> 00:59:50,254 That's when the marginal tax rate was 91%. 1258 00:59:50,254 --> 00:59:51,088 - [Man] I know. 1259 00:59:53,590 --> 00:59:55,660 - Ronald Reagan, my mother loved him. 1260 00:59:55,660 --> 00:59:58,663 She watched him every Sunday night on GE Theater. 1261 00:59:58,663 --> 01:00:02,032 At the end, he would say, "At General Electric, 1262 01:00:02,032 --> 01:00:04,835 progress is our most important product." 1263 01:00:06,671 --> 01:00:08,605 - [Wesley] What would wrong Reagan say, 1264 01:00:08,605 --> 01:00:13,177 if you told him that GE spends more money on stock buybacks 1265 01:00:13,177 --> 01:00:15,112 than it does on R&D? 1266 01:00:15,112 --> 01:00:18,448 In 1950, stock buybacks were illegal. 1267 01:00:18,448 --> 01:00:21,351 They were considered market manipulation. 1268 01:00:22,286 --> 01:00:25,355 Now, investment analysts look at that company and say 1269 01:00:25,355 --> 01:00:27,091 "A lot of companies are really smart. 1270 01:00:27,091 --> 01:00:28,859 I think their stocks gonna continue to grow up 1271 01:00:28,859 --> 01:00:32,963 because they've got a really great stock buyback program." 1272 01:00:32,963 --> 01:00:34,965 It does nothing for the economy. 1273 01:00:39,303 --> 01:00:41,471 - The average American is... 1274 01:00:41,471 --> 01:00:43,808 they're living in the GDP of 1980. 1275 01:00:43,808 --> 01:00:45,109 - Yeah. 1276 01:00:45,109 --> 01:00:46,777 I mean, yeah, clearly the world has changed, 1277 01:00:46,777 --> 01:00:48,813 and the commodities you can buy 1278 01:00:48,813 --> 01:00:50,080 are not the same commodities, 1279 01:00:50,080 --> 01:00:51,648 but in terms of your let's say average 1280 01:00:51,648 --> 01:00:53,818 to the extent that we can measure living standards, 1281 01:00:53,818 --> 01:00:55,585 living standards have not improved. 1282 01:00:56,320 --> 01:00:59,489 Firms finance their investment out of their profits, 1283 01:00:59,489 --> 01:01:00,991 that's what people think. 1284 01:01:00,991 --> 01:01:03,828 Now, if you look at the 500 biggest U.S corporations, 1285 01:01:03,828 --> 01:01:07,264 50% of the profits are paid as dividends, 1286 01:01:07,264 --> 01:01:10,667 50% of the profits are useful buying back stocks. 1287 01:01:10,667 --> 01:01:12,803 All the profits dissipate, are gone. 1288 01:01:12,803 --> 01:01:15,005 So how do they finance their investment? 1289 01:01:15,005 --> 01:01:16,406 If they-- - Debt! 1290 01:01:16,406 --> 01:01:17,341 - Debt. 1291 01:01:18,776 --> 01:01:20,677 - [Newsman] The president expressed surprise 1292 01:01:20,677 --> 01:01:22,847 about the collapse on the markets yesterday. 1293 01:01:22,847 --> 01:01:26,483 He's still enduring popularity as much to the economic boom 1294 01:01:26,483 --> 01:01:29,519 that America has enjoyed under his leadership. 1295 01:01:29,519 --> 01:01:32,857 - More people are working than ever before in history 1296 01:01:32,857 --> 01:01:35,692 where our productivity is up 1297 01:01:35,692 --> 01:01:38,695 so is our manufacturing product up. 1298 01:01:39,930 --> 01:01:43,868 There is no runaway inflation as there has been in the past. 1299 01:01:43,868 --> 01:01:47,772 So as I say, I don't think anyone should panic 1300 01:01:47,772 --> 01:01:51,041 because all the economic indicators are solid. 1301 01:01:53,210 --> 01:01:55,712 - [Newsman] But the warning signs have long been there 1302 01:01:55,712 --> 01:01:58,348 in the closed factories in many American small towns. 1303 01:01:59,049 --> 01:02:00,450 - I mean, there is this notion 1304 01:02:00,450 --> 01:02:02,452 of billionaires creating employment, 1305 01:02:02,452 --> 01:02:05,655 and that is trickle-down economics. 1306 01:02:05,655 --> 01:02:07,724 The problem about that is that in history, 1307 01:02:07,724 --> 01:02:09,226 it has never happened. 1308 01:02:09,226 --> 01:02:11,661 There is no such thing as trickle-down economics. 1309 01:02:11,661 --> 01:02:13,463 It simply doesn't exist. 1310 01:02:13,463 --> 01:02:15,399 - [Man] It really is voodoo economics. 1311 01:02:18,735 --> 01:02:20,805 (bird cawing) 1312 01:02:20,805 --> 01:02:23,140 - When you put the smartest people in the world in finance 1313 01:02:23,140 --> 01:02:24,308 which is what we've done 1314 01:02:24,308 --> 01:02:26,743 for the last 25 years in this country, 1315 01:02:26,743 --> 01:02:30,848 you can't hold back their imagination and their creativity. 1316 01:02:32,649 --> 01:02:34,751 - The speed and scale of global economic change 1317 01:02:34,751 --> 01:02:36,753 has overwhelmed the national systems 1318 01:02:36,753 --> 01:02:38,655 of rules and regulations. 1319 01:02:38,655 --> 01:02:40,557 So our first test is to agree tougher 1320 01:02:40,557 --> 01:02:44,094 and more transparent supervision of banks, hedge funds 1321 01:02:44,094 --> 01:02:46,831 and what is known as the global shadow banking system. 1322 01:02:50,100 --> 01:02:52,402 - And so when you get right down to it, 1323 01:02:52,402 --> 01:02:53,770 I'm a licensed banker. 1324 01:02:53,770 --> 01:02:56,440 And so when the regulators come to my bank, 1325 01:02:56,440 --> 01:02:58,042 we're very simple little bank. 1326 01:02:58,042 --> 01:03:00,344 They look for the SOP, they look for due diligence 1327 01:03:00,344 --> 01:03:02,079 on projects we've done. 1328 01:03:02,079 --> 01:03:03,613 It's pretty easy. 1329 01:03:03,613 --> 01:03:08,352 You go to a big bank, Wells or JP Morgan or Goldman, 1330 01:03:08,352 --> 01:03:09,887 and you're a regular like, 1331 01:03:09,887 --> 01:03:12,522 "What is this? I see these emails and... " I mean, 1332 01:03:13,290 --> 01:03:15,359 they don't understand it because they're not working in it. 1333 01:03:15,359 --> 01:03:16,260 They didn't invent it. 1334 01:03:16,393 --> 01:03:17,862 - Sure. - It's like trying to teach people 1335 01:03:17,862 --> 01:03:19,964 a theory of quantum gravity 1336 01:03:19,964 --> 01:03:22,032 when they've had a high school physics course 1337 01:03:22,032 --> 01:03:24,734 and they're inspecting Stephen Hawking or something. 1338 01:03:24,734 --> 01:03:27,905 (gentle music) 1339 01:03:27,905 --> 01:03:29,706 - [Katharina] The earth is like a bounded natural system 1340 01:03:29,706 --> 01:03:32,042 that can't expand forever. 1341 01:03:32,042 --> 01:03:33,477 The beauty of the legal code 1342 01:03:33,477 --> 01:03:35,880 and derivatives are a product of the legal code 1343 01:03:35,880 --> 01:03:39,416 is that we can expand it how far we want, right? 1344 01:03:39,416 --> 01:03:41,085 So we always create new types of assets, 1345 01:03:41,085 --> 01:03:44,721 we create new types of legal tricks in the end, 1346 01:03:44,721 --> 01:03:47,157 and the two systems are not easily compatible. 1347 01:03:47,157 --> 01:03:49,826 (gentle music) 1348 01:03:51,295 --> 01:03:53,163 - If you're very rich and you gamble with your money 1349 01:03:53,163 --> 01:03:54,999 and you lose it in Las Vegas, 1350 01:03:54,999 --> 01:03:58,135 that is what you want and it's your problem. 1351 01:03:58,135 --> 01:04:02,572 But here, if they lose their money here, it is our problem. 1352 01:04:03,240 --> 01:04:04,841 - The market can't punish 1353 01:04:04,841 --> 01:04:06,843 for things it doesn't know anything about. 1354 01:04:06,843 --> 01:04:09,079 - And they haven't factored any of the risks 1355 01:04:09,079 --> 01:04:11,781 that all this could change. 1356 01:04:11,781 --> 01:04:14,151 - Natural disaster could have major repercussions 1357 01:04:14,151 --> 01:04:15,652 for our financial system, 1358 01:04:15,652 --> 01:04:19,023 just because they will have an effect on the asset values. 1359 01:04:19,023 --> 01:04:20,190 - [Roosevelt] The new law 1360 01:04:20,190 --> 01:04:23,360 allows the 12 federal reserve banks 1361 01:04:23,360 --> 01:04:26,863 to issue additional currency on good assets 1362 01:04:26,863 --> 01:04:30,367 and thus the banks that reopen will be able to meet 1363 01:04:30,367 --> 01:04:32,502 every legitimate call. 1364 01:04:32,502 --> 01:04:34,438 It is sound currency 1365 01:04:34,438 --> 01:04:39,209 because it is backed by actual good assets. 1366 01:04:39,209 --> 01:04:41,811 (water gurgles) 1367 01:04:41,811 --> 01:04:44,048 (sizzling) 1368 01:04:45,149 --> 01:04:49,486 (helicopter engine revving) 1369 01:04:49,486 --> 01:04:52,389 (gentle music) 1370 01:04:52,389 --> 01:04:55,459 - And so what happens is that there's an event. 1371 01:04:55,459 --> 01:04:59,329 And then when the event happens, then everybody wakes up 1372 01:04:59,329 --> 01:05:02,799 and sadly there's what we call in a financial system, 1373 01:05:02,799 --> 01:05:06,971 contagion, and people unload, they unload stocks, 1374 01:05:06,971 --> 01:05:09,473 they try to get their derivatives repaid. 1375 01:05:09,473 --> 01:05:11,875 They want their insurance policies cashed. 1376 01:05:11,875 --> 01:05:13,810 And the market starts to unravel. 1377 01:05:14,478 --> 01:05:16,413 When the market starts to go down, 1378 01:05:16,413 --> 01:05:19,516 the plugs get pulled everywhere. 1379 01:05:19,516 --> 01:05:21,918 And so what you're dealing with in climate change, 1380 01:05:21,918 --> 01:05:24,254 it's not only the direct impact, 1381 01:05:24,254 --> 01:05:26,656 but also the possibility of contagion. 1382 01:05:26,656 --> 01:05:27,757 - Economic contagion. 1383 01:05:27,757 --> 01:05:28,592 - Economic contagion. - Financial. 1384 01:05:28,592 --> 01:05:29,526 - Yep. 1385 01:05:29,526 --> 01:05:30,760 (air blowing) 1386 01:05:30,760 --> 01:05:32,329 - Those views are merely forecasts, 1387 01:05:32,329 --> 01:05:35,332 and as always will evolve with the arrival 1388 01:05:35,332 --> 01:05:36,533 of new information. 1389 01:05:36,533 --> 01:05:37,767 (sirens blaring) 1390 01:05:37,767 --> 01:05:39,236 - Mike, they're on the bell, hold the bell. 1391 01:05:39,236 --> 01:05:41,738 (indistinct) the bells. 1392 01:05:41,738 --> 01:05:43,440 - We actually have made it clear 1393 01:05:43,440 --> 01:05:46,376 that we will bail out these financial actors. 1394 01:05:46,376 --> 01:05:47,577 We will bail them. 1395 01:05:47,577 --> 01:05:49,446 This cannot be sustained. 1396 01:05:49,446 --> 01:05:51,581 - If it runs only because the central banks go in 1397 01:05:51,581 --> 01:05:53,283 and buy assets, right? 1398 01:05:53,283 --> 01:05:54,884 Recently it was proposed that the 1399 01:05:54,884 --> 01:05:56,253 European Central Bank 1400 01:05:56,253 --> 01:05:58,855 should also start buying shares of companies. 1401 01:05:58,855 --> 01:06:01,525 So not only debt, but shares. 1402 01:06:01,525 --> 01:06:04,961 So we're effectively socializing the obligation 1403 01:06:04,961 --> 01:06:07,531 to create financial returns 1404 01:06:07,531 --> 01:06:10,867 for the holders of capital assets. 1405 01:06:10,867 --> 01:06:13,603 And that can't go on forever. 1406 01:06:13,603 --> 01:06:16,373 (cheerful music) 1407 01:06:22,246 --> 01:06:24,314 - Even though every politician says, 1408 01:06:24,314 --> 01:06:27,084 "This is the most important election in your lifetime." 1409 01:06:27,984 --> 01:06:33,090 These forces aren't tamed or unleashed by a single election. 1410 01:06:33,823 --> 01:06:36,393 (audience cheering) 1411 01:06:37,494 --> 01:06:39,396 - In the news in the last couple of weeks, 1412 01:06:39,396 --> 01:06:41,765 we've read about the coronavirus. 1413 01:06:41,765 --> 01:06:43,267 And dude, China's acting like 1414 01:06:43,267 --> 01:06:45,169 this is (scoffs) like zombie apocalypse. 1415 01:06:45,169 --> 01:06:46,570 - I'm actually kind of afraid of that 1416 01:06:46,570 --> 01:06:48,138 corona virus, man. - Yeah. No, I don't wanna get 1417 01:06:48,138 --> 01:06:49,406 on a plane. 1418 01:06:49,406 --> 01:06:51,007 Do we have a government that's competent enough 1419 01:06:51,007 --> 01:06:54,111 and organized enough to handle that kind of response? 1420 01:06:54,111 --> 01:06:56,080 - No, man. I mean, we can't even handle 1421 01:06:56,080 --> 01:06:58,415 like homelessness in the city of LA. 1422 01:06:58,415 --> 01:06:59,949 You know what I mean? 1423 01:06:59,949 --> 01:07:02,452 Like we can't even figure out how to properly fund anything, 1424 01:07:02,452 --> 01:07:04,321 let alone a pandemic. 1425 01:07:04,321 --> 01:07:06,990 (gentle music) 1426 01:07:08,692 --> 01:07:10,527 - Americans live under the illusion 1427 01:07:10,527 --> 01:07:12,696 that they're incredibly different from other people. 1428 01:07:12,696 --> 01:07:15,665 When I was in college just everything started 1429 01:07:15,665 --> 01:07:17,667 to melt down in the Balkans, 1430 01:07:17,667 --> 01:07:20,437 everyone's like, "These people are savages. 1431 01:07:20,437 --> 01:07:23,140 "They've been fighting each other for hundreds-of-years." 1432 01:07:23,140 --> 01:07:26,710 It's like they just came down out of the trees or something. 1433 01:07:26,710 --> 01:07:29,546 Then you're there and you realize 1434 01:07:29,546 --> 01:07:32,549 these people live in houses that have electricity 1435 01:07:32,549 --> 01:07:34,651 and two-car garages and refrigerators 1436 01:07:34,651 --> 01:07:36,653 and not only children in college, 1437 01:07:36,653 --> 01:07:39,323 but several generations that have gone through college 1438 01:07:39,323 --> 01:07:42,659 and they all spoke the same language. 1439 01:07:42,659 --> 01:07:45,329 (gentle music) 1440 01:07:46,496 --> 01:07:47,864 And these people (jet engine roaring) 1441 01:07:47,864 --> 01:07:49,333 killed each other. 1442 01:07:49,333 --> 01:07:54,238 They committed genocide, 250,000 killed, rape camps, 1443 01:07:54,338 --> 01:07:57,541 concentration camps, ethnic cleansing. 1444 01:07:58,642 --> 01:08:02,579 - This was a plan to ethnically cleanse Kosovo 1445 01:08:02,579 --> 01:08:04,748 and get rid of the Albanian population. 1446 01:08:04,748 --> 01:08:06,350 Are we going to stand for that? 1447 01:08:06,350 --> 01:08:09,753 Is France going to stand for that? I don't think so. 1448 01:08:09,753 --> 01:08:11,020 - [Interviewer] Like many countries 1449 01:08:11,020 --> 01:08:13,690 as a system starts to break down the, 1450 01:08:13,690 --> 01:08:16,260 in their case, it was the communist system, 1451 01:08:16,260 --> 01:08:18,495 and in our case, our capitalist system 1452 01:08:18,495 --> 01:08:20,197 is starting to break down 1453 01:08:20,197 --> 01:08:24,934 and people turn on each other because some leaders think 1454 01:08:24,934 --> 01:08:28,837 "Everybody's upset right now and I can motivate my group 1455 01:08:28,837 --> 01:08:30,540 "to take stuff from another group." 1456 01:08:30,540 --> 01:08:32,276 - [Narrator] Europe has not seen displaced people 1457 01:08:32,276 --> 01:08:35,612 in these numbers since the Second World War. 1458 01:08:35,612 --> 01:08:38,047 - And those are the kinds of things we have to worry about 1459 01:08:38,047 --> 01:08:40,950 with climate change, because it happens when, 1460 01:08:40,950 --> 01:08:42,952 resources start to get tight, 1461 01:08:42,952 --> 01:08:46,423 and everybody's a human, everybody's prone to these things. 1462 01:08:46,423 --> 01:08:49,226 - We've pre-cut boards that we can put over the windows 1463 01:08:49,226 --> 01:08:51,395 in the event that there are looters and things like that 1464 01:08:51,395 --> 01:08:52,595 to protect the house. 1465 01:08:54,264 --> 01:08:55,565 Yeah. You saw what you want right? 1466 01:08:55,565 --> 01:08:57,267 - We knew they wanted. 1467 01:08:57,267 --> 01:09:02,806 - The UN said just two weeks ago, a billion within 30 years. 1468 01:09:02,806 --> 01:09:05,541 - Okay. A billion displaced people, a billion refugees 1469 01:09:05,541 --> 01:09:06,943 because they can't grow their food the way they used to 1470 01:09:06,943 --> 01:09:09,313 because of the drought or because of floods 1471 01:09:09,313 --> 01:09:11,815 or because of collapse of systems. 1472 01:09:11,815 --> 01:09:13,217 - [Reporter] How much worse is this gonna get 1473 01:09:13,217 --> 01:09:14,318 before it gets better? 1474 01:09:15,885 --> 01:09:17,220 - I think the general view 1475 01:09:17,220 --> 01:09:19,789 is this is going to continue deteriorating 1476 01:09:19,789 --> 01:09:21,825 for the time being, 1477 01:09:21,825 --> 01:09:24,093 the next rains are a long while off. 1478 01:09:24,093 --> 01:09:26,330 - For the world, this is a very bad thing 1479 01:09:26,330 --> 01:09:29,833 because it's billions of people dislocated, 1480 01:09:29,833 --> 01:09:32,469 massive economic consequences. 1481 01:09:32,469 --> 01:09:34,638 (fireworks cracking) 1482 01:09:34,638 --> 01:09:37,474 - Can you have a society that's been 1483 01:09:37,474 --> 01:09:40,644 as successful as this one has in a material sense? 1484 01:09:40,644 --> 01:09:42,345 And can it transform itself? 1485 01:09:42,345 --> 01:09:45,315 You know, in the past empires haven't been able to do that. 1486 01:09:45,915 --> 01:09:47,851 What would these Romans say? 1487 01:09:49,253 --> 01:09:50,586 Could they help us? 1488 01:09:51,521 --> 01:09:52,656 - [Wes Jr.] Unlikely. 1489 01:09:52,656 --> 01:09:53,690 - [Wesley] Unlikely. 1490 01:09:53,690 --> 01:09:55,124 (gentle music) 1491 01:09:55,191 --> 01:09:58,127 The heritage of America is Roman. 1492 01:09:58,127 --> 01:10:00,764 All the men who wrote their constitution had studied 1493 01:10:00,764 --> 01:10:02,866 the history of Rome, 1494 01:10:02,866 --> 01:10:05,635 I mean, the Senate it's Roman. 1495 01:10:05,635 --> 01:10:08,371 - And it's failing us just like the Roman Senate failed. 1496 01:10:08,371 --> 01:10:11,207 - You know, there was a Greek philosopher who said 1497 01:10:11,808 --> 01:10:14,644 that governments go through cycles. 1498 01:10:14,644 --> 01:10:18,482 They go from a democracy to oligopoly 1499 01:10:18,548 --> 01:10:23,719 to dictatorships and they collapse. 1500 01:10:23,719 --> 01:10:26,856 - I know we're talking about Aristotle but.. 1501 01:10:26,856 --> 01:10:29,157 - Actually it wasn't Aristotle, it was a different guy. 1502 01:10:29,157 --> 01:10:30,559 - No, it was Aristotle. 1503 01:10:30,559 --> 01:10:32,896 - No, it was maybe it was Polybius, 1504 01:10:32,896 --> 01:10:34,063 I forget who it was. 1505 01:10:34,063 --> 01:10:37,233 - I'll bet you cash, it's Aristotle. 1506 01:10:37,233 --> 01:10:39,869 'cause we're in Vegas, I will bet you cash it's Aristotle, 1507 01:10:39,869 --> 01:10:42,906 because Aristotle came up with the definitions 1508 01:10:42,906 --> 01:10:44,841 of the three kinds of governments 1509 01:10:44,841 --> 01:10:46,743 and their alter egos. 1510 01:10:46,743 --> 01:10:49,813 So you have a democracy which when it goes bad, 1511 01:10:49,813 --> 01:10:51,315 becomes a mobocracy. 1512 01:10:52,416 --> 01:10:54,651 You have a monarchy, 1513 01:10:54,651 --> 01:10:57,687 which when it goes bad becomes a tyranny 1514 01:10:57,687 --> 01:10:59,988 and you have an aristocracy, 1515 01:10:59,988 --> 01:11:02,658 which when it goes bad becomes an oligopoly. 1516 01:11:06,530 --> 01:11:10,500 - He's building on the work of a predecessor. 1517 01:11:10,500 --> 01:11:12,035 What's the name of the predecessor? 1518 01:11:12,035 --> 01:11:13,937 We have to find that out. 1519 01:11:13,937 --> 01:11:15,171 - [Wes Jr.] I don't know, you tell me. 1520 01:11:15,171 --> 01:11:16,340 - [Wesley] We'll find it. 1521 01:11:16,340 --> 01:11:17,841 I don't know, I have to look it up. 1522 01:11:17,841 --> 01:11:20,610 - [Narrator] Wealth was obtained largely through trade, 1523 01:11:21,878 --> 01:11:23,680 into the warehouses full of goods 1524 01:11:23,680 --> 01:11:26,115 from all over the empire and beyond. 1525 01:11:26,850 --> 01:11:29,419 It was the wealthy few rather than the many, 1526 01:11:29,419 --> 01:11:31,120 who benefited from the riches 1527 01:11:31,120 --> 01:11:33,221 and vast resources of the empire. 1528 01:11:34,458 --> 01:11:37,361 This imbalance and the irresponsible behavior 1529 01:11:37,361 --> 01:11:38,962 of public officials, 1530 01:11:38,962 --> 01:11:42,398 would become major reasons for Rome's eventual decline. 1531 01:11:45,402 --> 01:11:47,537 - Okay, so dad and I had this bet 1532 01:11:47,537 --> 01:11:49,473 and I need you to see if I'm right 1533 01:11:49,473 --> 01:11:50,974 or he's right. - Okay. 1534 01:11:51,875 --> 01:11:53,276 - It's about Aristotle. 1535 01:11:53,276 --> 01:11:54,811 - Oh boy. 1536 01:11:54,811 --> 01:11:55,745 - I know, I know. 1537 01:11:55,745 --> 01:11:57,046 (laughing) 1538 01:11:57,046 --> 01:12:00,484 So I was like well, Aristotle described, 1539 01:12:00,484 --> 01:12:02,486 the death of democracy and what happens 1540 01:12:02,486 --> 01:12:05,121 to different forms of government as they decay. 1541 01:12:06,322 --> 01:12:08,958 (gentle music) 1542 01:12:12,429 --> 01:12:16,833 (speaking in a foreign language) 1543 01:13:06,049 --> 01:13:10,219 - Well you see Alessia, I know from also from your studies, 1544 01:13:10,219 --> 01:13:12,989 that the collapse of the Roman Empire 1545 01:13:12,989 --> 01:13:17,293 was mainly a huge, gigantic, 1546 01:13:17,293 --> 01:13:21,498 enormous, humongous, financial collapse. 1547 01:13:21,498 --> 01:13:25,902 At some point, the emperors had just run out of money. 1548 01:13:27,671 --> 01:13:30,005 - There are lots of different theories 1549 01:13:30,005 --> 01:13:32,208 why the Roman Empire did collapse. 1550 01:13:32,208 --> 01:13:33,510 I think what we know now, 1551 01:13:33,510 --> 01:13:36,513 is that there has been a long economic decline 1552 01:13:36,513 --> 01:13:37,981 before the Roman Empire collapsed, 1553 01:13:37,981 --> 01:13:40,650 before the German hoards came down 1554 01:13:40,650 --> 01:13:42,752 and conquered Italy, 1555 01:13:42,752 --> 01:13:44,353 and conquered Rome, ultimately, right? 1556 01:13:44,353 --> 01:13:48,758 So the question is what triggered the long economic decline? 1557 01:13:48,758 --> 01:13:52,261 - Disparity between the rich and the poor. 1558 01:13:52,261 --> 01:13:54,931 - Onistorus and Miliorus they... 1559 01:13:54,931 --> 01:13:56,264 - Yes, you're speaking Latin now. 1560 01:13:56,264 --> 01:13:57,567 - Yeah, yeah Latin. 1561 01:13:58,602 --> 01:14:00,603 - Massive amounts of inequality 1562 01:14:00,603 --> 01:14:02,939 may not be politically sustainable. 1563 01:14:04,207 --> 01:14:07,443 Governments fund themselves through either debt, 1564 01:14:07,443 --> 01:14:08,678 or through taxation. 1565 01:14:08,678 --> 01:14:10,179 In Rome you would basically go 1566 01:14:10,179 --> 01:14:13,683 and try to squeeze more returns out of 1567 01:14:13,683 --> 01:14:15,118 provinces that you occupied, 1568 01:14:15,118 --> 01:14:18,054 or you might launch another war to get the returns, 1569 01:14:18,054 --> 01:14:20,456 to feed Rome and feed those who were 1570 01:14:20,456 --> 01:14:22,125 running the system overall. 1571 01:14:23,527 --> 01:14:25,529 And I think that's the common denominator 1572 01:14:25,529 --> 01:14:27,897 because we live in a quite different system today, right? 1573 01:14:27,897 --> 01:14:29,566 So today it's our central banks 1574 01:14:29,566 --> 01:14:31,901 who are doing the rescue operation. 1575 01:14:31,901 --> 01:14:33,469 - One thing about the financial markets, 1576 01:14:33,469 --> 01:14:35,972 one of their real power is, 1577 01:14:35,972 --> 01:14:39,407 if they can pull forward action from the future 1578 01:14:39,407 --> 01:14:41,911 to the present, if there's credible policy, 1579 01:14:41,911 --> 01:14:44,380 after all, most of what central banks do 1580 01:14:44,380 --> 01:14:45,949 is effectively that. 1581 01:14:46,916 --> 01:14:48,885 - So big trees fall hard. 1582 01:14:48,885 --> 01:14:51,154 The market can adapt to anything, 1583 01:14:51,154 --> 01:14:52,656 as long as there's clarity, 1584 01:14:52,656 --> 01:14:55,124 transparency and honesty 1585 01:14:55,124 --> 01:14:58,562 and I don't think we're getting that. 1586 01:14:58,827 --> 01:15:01,164 - There were a lot of things that caused the problem, 1587 01:15:01,164 --> 01:15:04,968 but, I mean, essentially, 1588 01:15:04,968 --> 01:15:06,434 the structure of Rome 1589 01:15:06,434 --> 01:15:08,838 held together for a good long time, 1590 01:15:08,838 --> 01:15:11,007 until finally it just ran out 1591 01:15:11,007 --> 01:15:15,745 of economic wherewithal and leadership. 1592 01:15:15,745 --> 01:15:17,581 - Politicians were bought, 1593 01:15:17,581 --> 01:15:20,617 what the founders of our republic warned us 1594 01:15:20,617 --> 01:15:23,286 about over and over that if you get really wealthy 1595 01:15:23,286 --> 01:15:26,022 and you lose your moral character, it's over. 1596 01:15:26,022 --> 01:15:27,757 - Well, that's where we are. 1597 01:15:27,757 --> 01:15:30,526 - Because we are very close to a moment 1598 01:15:30,526 --> 01:15:35,531 in which we could start slowly going down 1599 01:15:35,531 --> 01:15:37,867 and if we are not very careful, 1600 01:15:37,867 --> 01:15:40,804 we will go down faster and faster and faster and faster. 1601 01:15:40,804 --> 01:15:42,105 (exclaiming) 1602 01:15:42,105 --> 01:15:43,306 Roller coaster. 1603 01:15:43,306 --> 01:15:45,508 It will be a lot of fun, maybe. 1604 01:15:46,142 --> 01:15:48,544 You know the ancient malediction, 1605 01:15:48,544 --> 01:15:52,380 may you live in interesting times. 1606 01:15:52,380 --> 01:15:54,718 (loud bang) 1607 01:15:55,719 --> 01:15:59,723 - So, that's how it ended last time. 1608 01:16:02,726 --> 01:16:04,728 Except this time, it won't just be barbarians, 1609 01:16:04,728 --> 01:16:06,963 it'll be the planet itself that's on fire. 1610 01:16:06,963 --> 01:16:09,565 (fire roaring) 1611 01:16:11,668 --> 01:16:13,568 - [Man] There's still active fire in that area. 1612 01:16:13,568 --> 01:16:16,472 Monitor the conditions and know what you'll do 1613 01:16:16,472 --> 01:16:18,907 if the fire threatens (indistinct) 1614 01:16:18,907 --> 01:16:21,377 - [Woman] In the smoky aftermath of the worst start 1615 01:16:21,377 --> 01:16:23,746 to fire season anyone can remember, 1616 01:16:23,746 --> 01:16:25,648 while some search for solutions, 1617 01:16:25,648 --> 01:16:27,583 others want someone to blame. 1618 01:16:27,583 --> 01:16:29,753 (gentle somber music) 1619 01:16:29,753 --> 01:16:31,587 - Probably should take a break and let it settle in, 1620 01:16:31,587 --> 01:16:32,656 take an intermission. 1621 01:16:35,725 --> 01:16:39,028 - Financial ingenuity has been part of this system 1622 01:16:39,028 --> 01:16:41,097 since the Dutch invented the... 1623 01:16:41,097 --> 01:16:42,365 - Okay, 1624 01:16:42,365 --> 01:16:43,599 - But a lot of it - liability company 1625 01:16:43,599 --> 01:16:45,534 - isn't financial - and Lloyds of London. 1626 01:16:45,534 --> 01:16:46,568 But dad, listen. 1627 01:16:46,568 --> 01:16:48,004 - People get pretty... 1628 01:16:48,004 --> 01:16:49,505 - Everybody thought Bernie Madoff was a genius. 1629 01:16:49,505 --> 01:16:50,707 - Yeah. 1630 01:16:50,707 --> 01:16:52,942 Foreign investors looked at the United States 1631 01:16:52,942 --> 01:16:57,013 and said, "the United States they're the best. 1632 01:16:57,013 --> 01:16:59,916 "That's the safest place in the world I can put my money". 1633 01:17:01,017 --> 01:17:02,218 - [Woman] I mean, we've had, I don't know, 1634 01:17:02,218 --> 01:17:04,452 five, six biblical-like events. 1635 01:17:04,452 --> 01:17:05,789 We're continuing to have them, 1636 01:17:05,789 --> 01:17:10,794 so I need to question the validity 1637 01:17:11,460 --> 01:17:15,464 of the value of, and viability 1638 01:17:15,464 --> 01:17:17,266 of my land long-term. 1639 01:17:17,266 --> 01:17:19,803 (upbeat music) 1640 01:17:23,807 --> 01:17:25,742 - A little over seven years ago, 1641 01:17:25,742 --> 01:17:28,044 Hurricane Sandy blew through here, 1642 01:17:28,044 --> 01:17:31,815 causing tens of billions of dollars in property damage, 1643 01:17:31,815 --> 01:17:36,820 and since then, New York has built more, 1644 01:17:36,820 --> 01:17:42,925 bigger, taller and more expensive, because we, the people, 1645 01:17:42,992 --> 01:17:47,496 are on the hook for the cost of the insurance 1646 01:17:47,496 --> 01:17:50,566 if another hurricane comes and hits New York City. 1647 01:17:50,566 --> 01:17:53,136 (rain pouring) 1648 01:17:54,503 --> 01:17:57,173 (metal banging) 1649 01:17:58,441 --> 01:18:00,409 The National Flood Insurance Program 1650 01:18:00,409 --> 01:18:04,580 is a federally-run public program of insurance. 1651 01:18:04,580 --> 01:18:07,984 It's run by the Federal Emergency Management Agency. 1652 01:18:10,987 --> 01:18:13,456 It provides flood insurance for virtually all homeowners 1653 01:18:13,456 --> 01:18:15,523 and small businesses in the country. 1654 01:18:15,523 --> 01:18:17,193 So this is pretty unusual, actually. 1655 01:18:17,193 --> 01:18:19,128 Most other countries have private markets 1656 01:18:19,128 --> 01:18:21,697 for flood insurance, but the U.S does not. 1657 01:18:21,697 --> 01:18:24,100 (sirens blaring) 1658 01:18:24,100 --> 01:18:27,436 - It's a supplementary policy that is subsidized 1659 01:18:27,436 --> 01:18:32,441 by the government, and so all citizens are, to some extent, 1660 01:18:32,441 --> 01:18:36,045 footing the bill for coastal property owners. 1661 01:18:38,647 --> 01:18:41,851 - In order to build a huge condominium development 1662 01:18:41,851 --> 01:18:43,787 in a flood plain in New York City, you, of course, 1663 01:18:43,787 --> 01:18:44,954 need a lot of capital. 1664 01:18:45,889 --> 01:18:48,724 Municipal actors in New York City are very interested 1665 01:18:48,724 --> 01:18:53,029 in continuing to promote a version of New York City, 1666 01:18:53,029 --> 01:18:57,633 in which as much of the available land remains viable 1667 01:18:57,633 --> 01:18:59,168 for continued economic development, 1668 01:18:59,168 --> 01:19:03,005 because property taxes are so important there, as elsewhere. 1669 01:19:06,409 --> 01:19:08,311 - Well, the original program 1670 01:19:08,311 --> 01:19:09,913 of the National Flood Insurance Program 1671 01:19:09,913 --> 01:19:13,549 was supposed to stop construction in very high risk areas. 1672 01:19:13,582 --> 01:19:15,718 Areas where water moves with velocity, 1673 01:19:15,718 --> 01:19:17,987 particularly flood ways along the river, 1674 01:19:17,987 --> 01:19:21,023 where water moves the same rate as the river, 1675 01:19:21,023 --> 01:19:24,593 hurricane-zoned areas, where the storm surge comes in. 1676 01:19:24,593 --> 01:19:26,594 The building is, 1677 01:19:26,594 --> 01:19:29,532 it's almost impossible to build a really safe building 1678 01:19:29,532 --> 01:19:32,735 against a 14-foot wall of water coming in at you 1679 01:19:32,735 --> 01:19:34,403 in a storm surge. 1680 01:19:35,939 --> 01:19:38,441 There's a lot of vested interests that don't care, 1681 01:19:38,441 --> 01:19:41,244 construction industry, for example. 1682 01:19:41,244 --> 01:19:45,748 They'd like to build a house on a beach 1683 01:19:45,748 --> 01:19:47,851 while the tide is out, as long as they can sell it 1684 01:19:47,851 --> 01:19:49,853 before the tide comes back in. 1685 01:19:49,853 --> 01:19:52,588 (water flapping) 1686 01:19:54,190 --> 01:19:55,791 And once they've sold it, of course, 1687 01:19:55,791 --> 01:19:57,693 the risk is now somebody else's. 1688 01:19:58,561 --> 01:20:02,465 - The ways in which financial actors securitized mortgages 1689 01:20:02,465 --> 01:20:06,702 in the run-up to the last financial crisis 1690 01:20:06,702 --> 01:20:07,937 is still going on. 1691 01:20:07,937 --> 01:20:09,772 - So the building contractors all want 1692 01:20:09,772 --> 01:20:12,441 to minimize the flood program. 1693 01:20:12,441 --> 01:20:14,443 The town wants to minimize it, 1694 01:20:14,443 --> 01:20:16,980 wanna hold down the elevations on the maps 1695 01:20:16,980 --> 01:20:19,148 and fight that every map that comes out 1696 01:20:19,148 --> 01:20:20,782 by the National Flood Insurance Program, 1697 01:20:20,782 --> 01:20:24,553 that causes problems, delay in implementation, 1698 01:20:24,553 --> 01:20:26,255 maybe never implementation. 1699 01:20:27,456 --> 01:20:28,958 - The coastal communities 1700 01:20:28,958 --> 01:20:31,995 are on some of the most valuable land in the country, 1701 01:20:31,995 --> 01:20:34,964 And as a consequence, people are gonna fight 1702 01:20:34,964 --> 01:20:38,501 to protect their investment position. 1703 01:20:39,434 --> 01:20:41,971 - I thought, okay, the city's not requiring me 1704 01:20:41,971 --> 01:20:44,139 to have flood insurance. 1705 01:20:44,139 --> 01:20:47,343 My realtor didn't tell me I had to have flood insurance. 1706 01:20:47,343 --> 01:20:49,645 - Honestly, you don't look at the flood maps 1707 01:20:49,645 --> 01:20:51,580 when you move into a neighborhood. 1708 01:20:51,580 --> 01:20:55,351 You fall in love with the house, and 85% of the people 1709 01:20:55,351 --> 01:20:57,186 in my neighborhood were not insured. 1710 01:20:57,186 --> 01:20:58,922 - [Narrator] Shelter. 1711 01:20:58,922 --> 01:21:01,958 - The United States is uniquely vulnerable 1712 01:21:01,958 --> 01:21:06,462 to building into disaster-likely, 1713 01:21:06,462 --> 01:21:10,666 physically vulnerable areas, because of our reliance 1714 01:21:10,666 --> 01:21:15,138 on local rule, particularly for zoning decisions. 1715 01:21:15,138 --> 01:21:18,707 That's part of our bedrock of the United States, 1716 01:21:18,707 --> 01:21:20,809 state rights and local rights, 1717 01:21:20,809 --> 01:21:23,812 and it's actually has a lot of advantages, 1718 01:21:23,812 --> 01:21:25,982 but it has a major disadvantage, 1719 01:21:25,982 --> 01:21:30,886 which is that local governments depend on revenues 1720 01:21:30,886 --> 01:21:34,157 that are coming from their buildings, from their residents 1721 01:21:34,157 --> 01:21:37,994 who are building and living in their localities, 1722 01:21:37,994 --> 01:21:42,966 and that means that all residents benefit from development. 1723 01:21:46,802 --> 01:21:51,040 - The politics of provision are so tied up with land values 1724 01:21:51,040 --> 01:21:54,243 in the United States, that if property values go down, 1725 01:21:54,243 --> 01:21:57,913 then the tax assessments adjust to reflect that, 1726 01:21:57,913 --> 01:22:00,183 and you're bringing in less revenue for the tax base, 1727 01:22:00,183 --> 01:22:03,052 which means less investment in local amenities 1728 01:22:03,052 --> 01:22:06,189 and schools and local public transportation. 1729 01:22:08,857 --> 01:22:13,329 - In Texas, we don't have state income tax. 1730 01:22:14,362 --> 01:22:15,931 That's another reason why you wanna live here, 1731 01:22:15,931 --> 01:22:18,867 because it's cheap, but people are taxed on their land. 1732 01:22:21,170 --> 01:22:24,707 - The maps that are in existence for where a 100 1733 01:22:24,707 --> 01:22:27,943 or 500-year flood will happen are so outdated 1734 01:22:27,943 --> 01:22:32,248 and no longer accurate, the risk and the cost of that risk, 1735 01:22:32,248 --> 01:22:36,952 even within the insurance industry, is not as accurate 1736 01:22:36,952 --> 01:22:39,555 as it needs to be, in order for us to appreciate 1737 01:22:39,555 --> 01:22:40,956 what the cost of climate is. 1738 01:22:42,391 --> 01:22:45,394 - Insurance actors have found ways 1739 01:22:45,394 --> 01:22:48,964 to take an insurance policy and securitize that, 1740 01:22:48,964 --> 01:22:50,966 and transfer it to kind of capital risk markets, 1741 01:22:50,966 --> 01:22:53,102 so they're not really holding the bag, 1742 01:22:53,102 --> 01:22:55,804 which means that they're willing to underwrite more 1743 01:22:55,804 --> 01:22:57,306 and more property, 1744 01:22:57,306 --> 01:22:59,308 which means that people can kinda continue to build 1745 01:22:59,308 --> 01:23:00,576 in risky areas. 1746 01:23:01,544 --> 01:23:04,147 - I don't think anyone would wanna come in 1747 01:23:04,147 --> 01:23:07,483 and look at the house and come through salt water 1748 01:23:07,483 --> 01:23:09,818 and wanna buy it. 1749 01:23:09,818 --> 01:23:12,921 (water splashing) 1750 01:23:12,921 --> 01:23:14,723 - This is my nest egg. - Yeah, this is your nest egg. 1751 01:23:14,723 --> 01:23:16,791 - This is how I'm gonna help my kids and my retirement. 1752 01:23:16,791 --> 01:23:19,327 - But now, because you bought it in an area 1753 01:23:19,327 --> 01:23:21,496 where there's rising sea level, 1754 01:23:21,496 --> 01:23:23,732 maybe that nest egg's not so secure. 1755 01:23:23,732 --> 01:23:28,003 In order to convert his nest egg to cash, 1756 01:23:28,003 --> 01:23:31,074 he's gotta be able to sell the house, 1757 01:23:31,074 --> 01:23:35,344 but now nobody will insure the next 30 year mortgage. 1758 01:23:35,344 --> 01:23:37,346 What happens to John? 1759 01:23:37,346 --> 01:23:39,282 - [Wesley] John's lost his retirement nest egg. 1760 01:23:39,282 --> 01:23:44,019 - Okay, so John is now literally John on the street. 1761 01:23:44,853 --> 01:23:48,991 - [Wesley] The nice house that we're gonna buy 1762 01:23:48,991 --> 01:23:50,659 in Florida to retire... 1763 01:23:51,427 --> 01:23:53,129 - This was their house in Florida. 1764 01:23:53,129 --> 01:23:54,530 They were gonna move to Alabama. 1765 01:23:54,530 --> 01:23:56,799 - [Wesley] Okay, well, they're not moving. 1766 01:23:56,799 --> 01:23:58,666 They may still move to Alabama. 1767 01:23:58,666 --> 01:24:00,469 They may be living in a trailer park. 1768 01:24:02,371 --> 01:24:03,871 - Flood involves the U.S government 1769 01:24:03,871 --> 01:24:05,474 in this really peculiar way, 1770 01:24:05,474 --> 01:24:09,212 fire is privately underwritten, 1771 01:24:09,212 --> 01:24:10,978 so it's private insurers 1772 01:24:10,978 --> 01:24:15,550 and what's happening with fire risk, 1773 01:24:15,550 --> 01:24:17,820 is that some of the primary insurers 1774 01:24:17,820 --> 01:24:19,054 are going out of business, 1775 01:24:19,054 --> 01:24:20,723 in events like the California wildfires, 1776 01:24:20,723 --> 01:24:22,125 that can put an insurer out of business, 1777 01:24:22,125 --> 01:24:24,727 if they have outstanding liabilities 1778 01:24:24,727 --> 01:24:26,662 that exceed what they can pay off. 1779 01:24:29,465 --> 01:24:30,866 - [Wes Jr.] Then we started talking 1780 01:24:30,866 --> 01:24:33,469 and you told me about buying a house 1781 01:24:33,469 --> 01:24:34,837 in Sausalito. 1782 01:24:34,837 --> 01:24:36,139 So what happened? 1783 01:24:36,139 --> 01:24:37,873 - So we call the insurance company two days before, 1784 01:24:37,873 --> 01:24:39,375 two or three days before 1785 01:24:39,375 --> 01:24:40,743 and let them know we're gonna close in a few days. 1786 01:24:40,743 --> 01:24:42,010 And they call us back and say, 1787 01:24:42,010 --> 01:24:43,212 " Hey, we can't insure that house" 1788 01:24:43,212 --> 01:24:44,680 And I'm like, "what?" 1789 01:24:44,680 --> 01:24:47,316 And they're like " yeah, it's on a list of neighborhoods 1790 01:24:47,316 --> 01:24:48,717 "that we don't insure anymore" 1791 01:24:48,717 --> 01:24:51,987 So these entire neighborhoods are gonna be uninsured 1792 01:24:51,987 --> 01:24:53,189 and they also told us, 1793 01:24:53,189 --> 01:24:55,090 they don't know if they're gonna reinsure 1794 01:24:55,090 --> 01:24:57,059 the current owner of the house either. 1795 01:24:57,059 --> 01:24:58,894 That's an entire, 1796 01:24:58,894 --> 01:25:02,264 billions of dollars of houses across the state, 1797 01:25:02,264 --> 01:25:04,400 that it's gonna have an insurance problem. 1798 01:25:05,568 --> 01:25:09,205 (jet engine roaring) 1799 01:25:09,205 --> 01:25:12,441 - The insurance companies are insuring for one year. 1800 01:25:12,441 --> 01:25:14,743 So as things get worse, the insurance companies 1801 01:25:14,743 --> 01:25:17,112 are definitely not going to be able 1802 01:25:17,112 --> 01:25:19,448 to come to the rescue of these homeowners. 1803 01:25:20,616 --> 01:25:23,386 - These latent, hidden climate risks 1804 01:25:23,386 --> 01:25:26,621 that might exist in different places, 1805 01:25:26,621 --> 01:25:28,191 in different housing markets, 1806 01:25:28,191 --> 01:25:30,459 should they burst, could take down 1807 01:25:30,459 --> 01:25:32,127 the entire financial system. 1808 01:25:33,962 --> 01:25:38,901 - And right now this house is listed for $49,000. 1809 01:25:38,901 --> 01:25:42,737 At the peak of the market, it went to about $250,000. 1810 01:25:43,871 --> 01:25:46,242 - It's not only the owners that lose their assets, 1811 01:25:46,242 --> 01:25:48,076 it's the financial intermediaries that lose 1812 01:25:48,076 --> 01:25:49,645 their claims against them. 1813 01:25:49,645 --> 01:25:52,047 It's those that bought the secularized mortgages 1814 01:25:52,047 --> 01:25:54,583 and other assets that are linked to them, 1815 01:25:54,583 --> 01:25:57,820 just as we've seen in the 2008 crisis. 1816 01:25:57,820 --> 01:26:00,323 - And unless we're prepared to continue to write 1817 01:26:00,323 --> 01:26:02,391 the same check over and over again, 1818 01:26:02,391 --> 01:26:04,393 we need to start to scrutinize, 1819 01:26:05,160 --> 01:26:10,833 are we hardening the utilities and the infrastructure 1820 01:26:10,833 --> 01:26:13,168 around these homes sufficiently, 1821 01:26:13,168 --> 01:26:16,103 so they can weather these storms going forward? 1822 01:26:16,103 --> 01:26:18,841 Or should we in fact not permit 1823 01:26:18,841 --> 01:26:23,346 the investment of capital, that is going to be subject to, 1824 01:26:24,680 --> 01:26:28,251 climate change conditions in a negative way 1825 01:26:28,251 --> 01:26:29,752 and we need to think about that. 1826 01:26:29,752 --> 01:26:32,521 - No, that's the really scary thing 1827 01:26:32,521 --> 01:26:35,458 because we're not, you know we're not hardening 1828 01:26:35,458 --> 01:26:37,125 any of our infrastructure. 1829 01:26:37,125 --> 01:26:37,960 (laughing) 1830 01:26:37,960 --> 01:26:39,027 I mean, not yet. 1831 01:26:39,027 --> 01:26:39,962 It's very expensive. 1832 01:26:39,962 --> 01:26:40,862 There's guys thinking about it, 1833 01:26:40,862 --> 01:26:42,630 but nobody's done it yet. 1834 01:26:42,630 --> 01:26:45,032 (train approaching) 1835 01:26:45,032 --> 01:26:47,335 - Well, from an oil company standpoint, 1836 01:26:48,202 --> 01:26:51,507 most of the major assets in the United States 1837 01:26:51,507 --> 01:26:54,610 and actually globally, are on the coastline. 1838 01:26:57,212 --> 01:27:01,116 From that standpoint, the facilities are as vulnerable 1839 01:27:01,116 --> 01:27:03,018 as people's homes. 1840 01:27:03,018 --> 01:27:05,288 So there's a lot of offshore infrastructure 1841 01:27:05,288 --> 01:27:06,989 in the Gulf of Mexico, 1842 01:27:06,989 --> 01:27:10,293 but that comes on shore to a lot of pipelines 1843 01:27:10,293 --> 01:27:12,695 that are right at the coastline. 1844 01:27:12,695 --> 01:27:15,230 And so as the coastline erodes, 1845 01:27:15,230 --> 01:27:18,567 those pipelines become noticeable and vulnerable 1846 01:27:18,567 --> 01:27:22,871 and have to be buried deeper, 1847 01:27:22,871 --> 01:27:26,074 or infrastructure put around it to protect it. 1848 01:27:26,809 --> 01:27:30,178 So indeed, yeah, hardening of infrastructure, 1849 01:27:30,178 --> 01:27:34,416 utilities and fires have been associated with that, 1850 01:27:34,416 --> 01:27:36,419 or the pipelines. 1851 01:27:36,419 --> 01:27:40,055 People are worried about how to protect those going forward. 1852 01:27:40,923 --> 01:27:44,827 - Nature's gonna be eroding the foundations 1853 01:27:44,827 --> 01:27:46,094 of our economy. 1854 01:27:46,094 --> 01:27:48,764 (waves roaring) 1855 01:27:53,436 --> 01:27:57,072 - So, sometimes I'm out in a place like this, 1856 01:27:58,040 --> 01:28:00,609 and I imagine what it would be like to come here 1857 01:28:00,609 --> 01:28:03,077 with no money in my pocket, 1858 01:28:04,347 --> 01:28:07,782 fleeing an economic meltdown, 1859 01:28:07,782 --> 01:28:10,218 'cause you know look, we do have plenty of land, 1860 01:28:11,920 --> 01:28:14,357 but if I had to survive out here 1861 01:28:14,357 --> 01:28:15,591 and didn't have the money 1862 01:28:16,859 --> 01:28:19,362 to buy something to provide me power, 1863 01:28:20,429 --> 01:28:22,431 some way to get water, 1864 01:28:22,431 --> 01:28:23,932 out of a fairly dry land, 1865 01:28:25,133 --> 01:28:27,570 while we love pristine nature 1866 01:28:27,570 --> 01:28:29,237 and we like to hike in it, 1867 01:28:29,237 --> 01:28:32,139 hunt in it, camp in it, 1868 01:28:32,139 --> 01:28:34,410 all those things we do 1869 01:28:34,410 --> 01:28:39,081 thanks to the technology that you bought at the store. 1870 01:28:39,081 --> 01:28:43,652 The tent, the gun, the flashlight, 1871 01:28:43,652 --> 01:28:47,723 the lighter, these things are made in human communities, 1872 01:28:47,723 --> 01:28:51,093 in factories, not by people on the run, 1873 01:28:51,093 --> 01:28:52,795 not by people out of capital. 1874 01:28:54,996 --> 01:28:57,633 (gentle music) 1875 01:28:59,402 --> 01:29:00,835 It's all about capital. 1876 01:29:04,272 --> 01:29:05,841 So here's what happens, 1877 01:29:05,841 --> 01:29:08,943 capital is gonna flow to where it can make the most money 1878 01:29:08,943 --> 01:29:10,112 for the capital owner. 1879 01:29:11,013 --> 01:29:12,246 A town like this, 1880 01:29:12,246 --> 01:29:14,650 which was a silver mining town, 1881 01:29:14,650 --> 01:29:17,952 is a good example of foraging theory, 1882 01:29:17,952 --> 01:29:20,155 where if you're an animal or, 1883 01:29:20,689 --> 01:29:24,359 and these things translate into the human world as well, 1884 01:29:24,359 --> 01:29:26,193 and you've got a choice between two things, 1885 01:29:26,193 --> 01:29:27,763 one that's easy to get 1886 01:29:27,763 --> 01:29:29,197 and one that's hard to get. 1887 01:29:29,197 --> 01:29:31,834 If the easy thing to get is worth more, 1888 01:29:31,834 --> 01:29:33,469 that's what you're gonna go for. 1889 01:29:33,469 --> 01:29:35,704 So that's what produces boom towns, 1890 01:29:35,704 --> 01:29:39,207 because at one point the silver was really easy to get to 1891 01:29:39,207 --> 01:29:40,375 and worth something 1892 01:29:40,375 --> 01:29:42,645 and then when the silver market crashed, 1893 01:29:42,645 --> 01:29:44,480 well, it wasn't worth anything. 1894 01:29:44,480 --> 01:29:49,184 So they moved on, to find the next easiest thing to mine. 1895 01:29:49,885 --> 01:29:55,123 These patterns of capital do not change over time. 1896 01:29:55,290 --> 01:29:59,027 Capital is always gonna seek the greatest return 1897 01:29:59,027 --> 01:30:02,197 and as soon as that return isn't paying off, 1898 01:30:02,197 --> 01:30:05,166 it's gonna pull up stakes and go somewhere else. 1899 01:30:05,568 --> 01:30:09,905 - The way to define capital is the money 1900 01:30:09,905 --> 01:30:14,175 that is going to be used to create something. 1901 01:30:14,175 --> 01:30:17,680 - People are very myopic. 1902 01:30:17,680 --> 01:30:20,883 They are just looking at what's in front of their face 1903 01:30:20,883 --> 01:30:23,251 and the portfolio that's right there, 1904 01:30:23,251 --> 01:30:25,688 how they're gonna make money in the short term. 1905 01:30:32,094 --> 01:30:33,728 - How you doing Frank? 1906 01:30:33,728 --> 01:30:34,897 (laughing) 1907 01:30:34,897 --> 01:30:37,933 So look, we look around and it's like, 1908 01:30:37,933 --> 01:30:39,201 this is all the capital, 1909 01:30:39,201 --> 01:30:40,702 this is all the capital in the world, 1910 01:30:40,702 --> 01:30:42,103 headquartered right here. 1911 01:30:42,103 --> 01:30:43,438 - Right. 1912 01:30:43,438 --> 01:30:47,442 - And I'm assuming they all wanna live past 2050 1913 01:30:47,442 --> 01:30:49,277 and so we gotta change over. 1914 01:30:49,277 --> 01:30:54,449 Are they beating down a trail to your door to invest? 1915 01:30:54,449 --> 01:30:55,951 - No, they're not. 1916 01:30:55,951 --> 01:30:59,353 We have to search for the right type of investors 1917 01:30:59,353 --> 01:31:01,223 for our projects. 1918 01:31:01,223 --> 01:31:06,028 And when we do find the investors for our projects, 1919 01:31:06,028 --> 01:31:10,432 it's extremely difficult to create the value 1920 01:31:10,432 --> 01:31:14,302 or pull out the value for our projects that the investors 1921 01:31:14,302 --> 01:31:17,439 recognize immediately. 1922 01:31:17,439 --> 01:31:22,377 - If somebody can get 15% on their money doing derivatives, 1923 01:31:22,377 --> 01:31:24,947 why would they wanna get 5% on their money 1924 01:31:24,947 --> 01:31:27,382 doing renewable? 1925 01:31:27,382 --> 01:31:29,552 - Because they would be able 1926 01:31:29,552 --> 01:31:32,555 to use the investment tax credit. 1927 01:31:32,555 --> 01:31:33,922 Everybody wants a return 1928 01:31:33,922 --> 01:31:36,892 and everybody wants to maximize their return. 1929 01:31:36,892 --> 01:31:40,829 And the only groups that I know can maximize their return 1930 01:31:40,829 --> 01:31:43,498 for renewable energy projects today, 1931 01:31:43,498 --> 01:31:48,236 are the wealthy individuals that have passive income. 1932 01:31:48,236 --> 01:31:50,606 - And, what do we think of as like wealthy individuals? 1933 01:31:50,606 --> 01:31:53,842 So I think a lot of Americans think if someone has $500,000, 1934 01:31:53,842 --> 01:31:55,077 they are a wealthy individual. 1935 01:31:55,077 --> 01:31:56,679 - I'm talking about people who have 1936 01:31:56,679 --> 01:31:59,181 hundreds and hundreds of millions of dollars of net worth. 1937 01:31:59,181 --> 01:32:02,585 - So minimum, a hundred million dollars of net worth. 1938 01:32:02,585 --> 01:32:04,952 - I would say so, but there's not many people 1939 01:32:04,952 --> 01:32:07,755 maybe less than 1% of the population 1940 01:32:07,755 --> 01:32:10,358 that has that type of investment portfolio, 1941 01:32:10,358 --> 01:32:14,162 or investments generating passive income. 1942 01:32:14,763 --> 01:32:16,298 - Any more comments? 1943 01:32:16,298 --> 01:32:18,266 - That's pretty close all right, pretty close. 1944 01:32:18,266 --> 01:32:19,101 - Perfect. 1945 01:32:19,101 --> 01:32:20,035 - All right. 1946 01:32:20,035 --> 01:32:21,837 - So when there's not investment 1947 01:32:21,837 --> 01:32:24,873 in the market towards the technology 1948 01:32:24,873 --> 01:32:27,943 that would help for climate solutions, 1949 01:32:27,943 --> 01:32:30,312 and renewables and clean energy, 1950 01:32:30,312 --> 01:32:33,315 then that trickles down into the entire, 1951 01:32:34,717 --> 01:32:38,286 the entire life stream or life cycle, 1952 01:32:38,286 --> 01:32:41,724 you know, the whole flow of business. 1953 01:32:41,724 --> 01:32:44,492 - Lord Keynes, who was the founder of macro economics 1954 01:32:44,492 --> 01:32:47,162 asked the question, why do people invest? 1955 01:32:47,162 --> 01:32:49,698 And honestly, there's no answer. 1956 01:32:49,698 --> 01:32:52,367 He called it animal spirits. 1957 01:32:54,302 --> 01:32:56,871 I can tell you people are risk averse. 1958 01:32:56,871 --> 01:33:00,242 And after 2008, they're even more risk averse. 1959 01:33:01,644 --> 01:33:03,545 When I go to these business conferences 1960 01:33:03,545 --> 01:33:05,347 and I see my friends, 1961 01:33:05,347 --> 01:33:07,750 I asked the guy who's worth a hundred million dollars, 1962 01:33:07,750 --> 01:33:09,317 I said, what are you working on now? 1963 01:33:09,317 --> 01:33:11,253 He says, you know, he said, I'm just, 1964 01:33:11,253 --> 01:33:13,355 I'm pretty happy where I am 1965 01:33:13,989 --> 01:33:17,525 and you know, I've got the house in Mexico 1966 01:33:17,525 --> 01:33:19,361 and we're looking after the grandkids, 1967 01:33:19,361 --> 01:33:22,430 and I mean, he's not investing in taking risks. 1968 01:33:22,430 --> 01:33:24,700 He's not creating jobs for the rest of us, 1969 01:33:24,700 --> 01:33:26,368 at least not directly. 1970 01:33:26,368 --> 01:33:28,871 That's the animal spirits that are out there 1971 01:33:28,871 --> 01:33:31,606 in too much of the business community right now. 1972 01:33:31,606 --> 01:33:34,442 So the only way you can replace that 1973 01:33:34,442 --> 01:33:37,045 is with government leadership. 1974 01:33:37,045 --> 01:33:40,282 The Erie Canal, the Transcontinental Railroad, 1975 01:33:40,282 --> 01:33:43,719 the Panama Canal, the space program, 1976 01:33:43,719 --> 01:33:46,855 the interstate highway system, 1977 01:33:46,855 --> 01:33:50,458 in no case did a group of entrepreneurs get together 1978 01:33:50,458 --> 01:33:53,428 and say, hey let's build the interstate highway system. 1979 01:33:53,428 --> 01:33:57,866 No, it was a dream that Ike pushed in 1955 1980 01:33:57,866 --> 01:33:59,702 that came from a study done 1981 01:33:59,702 --> 01:34:02,103 during World War II that showed that 1982 01:34:02,103 --> 01:34:04,606 you needed these highways for national security purposes. 1983 01:34:04,606 --> 01:34:06,942 - This is no partisan policy. 1984 01:34:06,942 --> 01:34:11,914 No one has a monopoly on truth, 1985 01:34:11,914 --> 01:34:14,416 and on the facts that affect this country, 1986 01:34:14,416 --> 01:34:15,617 we must work together. 1987 01:34:17,152 --> 01:34:19,321 - The United States is highly dis-aggregated. 1988 01:34:19,321 --> 01:34:21,889 We have 50 states, one nation, 1989 01:34:21,889 --> 01:34:23,225 many counties, many regions, 1990 01:34:23,225 --> 01:34:24,459 tens of thousands of cities 1991 01:34:24,459 --> 01:34:26,428 they all have a voice in how things are done. 1992 01:34:26,428 --> 01:34:30,132 And it's hard to get us to collaborate on certain projects, 1993 01:34:30,132 --> 01:34:33,068 unless we all align and agree it's necessary 1994 01:34:33,068 --> 01:34:35,337 and we feel some urgency to get it done. 1995 01:34:37,272 --> 01:34:39,241 - If the Australian military study, 1996 01:34:39,241 --> 01:34:40,475 the U.S military study, 1997 01:34:40,475 --> 01:34:42,677 and the British military study are all correct 1998 01:34:42,677 --> 01:34:44,980 we've got about 30 years 1999 01:34:44,980 --> 01:34:48,183 if we don't do anything until civilization collapses. 2000 01:34:48,183 --> 01:34:51,286 Which I'm guessing doesn't have a good rate of return. 2001 01:34:51,286 --> 01:34:52,187 - Correct? 2002 01:34:52,187 --> 01:34:54,089 So Wes there are actually those 2003 01:34:55,190 --> 01:34:56,591 who would tell you that we may be 2004 01:34:56,591 --> 01:34:58,693 beyond the tipping point already, 2005 01:34:58,693 --> 01:35:01,196 I don't subscribe to that, by the way. 2006 01:35:01,964 --> 01:35:05,000 If you do subscribe to that then 2007 01:35:05,000 --> 01:35:07,302 it almost makes the investment in, 2008 01:35:07,302 --> 01:35:10,806 you know wind and solar, not pertinent. 2009 01:35:18,046 --> 01:35:20,715 - [Wesley] What's the most valuable thing in the world? 2010 01:35:20,715 --> 01:35:22,717 The most valuable thing, 2011 01:35:22,717 --> 01:35:25,954 it's oil reserves in the ground. 2012 01:35:25,954 --> 01:35:29,023 It's worth more than the GDP of the United States, 2013 01:35:29,023 --> 01:35:31,226 more than the stock market, 2014 01:35:31,226 --> 01:35:34,529 more than the stock markets of all the Western countries, 2015 01:35:34,529 --> 01:35:36,398 it's oil in the ground, 2016 01:35:36,398 --> 01:35:41,403 and the people that have that oil, they want it to be used. 2017 01:35:41,804 --> 01:35:43,839 Whatever you hear about Saudi Arabia 2018 01:35:43,839 --> 01:35:45,240 saying they're going to, you know 2019 01:35:45,240 --> 01:35:48,675 move beyond a petrol based economy, yell, yell, 2020 01:35:48,675 --> 01:35:50,678 but they're going to move at their pace 2021 01:35:50,678 --> 01:35:53,514 and they need those petro dollars to get there. 2022 01:35:53,514 --> 01:35:57,552 The societal costs right now are much greater 2023 01:35:57,552 --> 01:36:01,056 than the economic costs of taking it out of the ground. 2024 01:36:01,056 --> 01:36:03,725 So you have to recognize the societal impact 2025 01:36:03,725 --> 01:36:05,160 and you have to make the people 2026 01:36:05,160 --> 01:36:07,495 who are producing it and selling it, 2027 01:36:07,495 --> 01:36:09,898 and the people who are buying it 2028 01:36:09,898 --> 01:36:13,668 pay the full cost of using it. 2029 01:36:13,668 --> 01:36:15,603 And that, that means a tax. 2030 01:36:15,603 --> 01:36:18,773 - But we didn't even do that with security though, 2031 01:36:18,773 --> 01:36:20,608 because I mean, realistically 2032 01:36:20,608 --> 01:36:23,245 we've subsidized the oil industry for 50 years 2033 01:36:23,245 --> 01:36:25,380 by knocking over governments, 2034 01:36:25,380 --> 01:36:28,550 by protecting shipping lanes for it, oil lanes, 2035 01:36:28,550 --> 01:36:31,219 so we couldn't even do it when it came to like 2036 01:36:32,620 --> 01:36:37,359 having them pay for their own extraction and security. 2037 01:36:37,359 --> 01:36:38,894 - It's true. 2038 01:36:38,894 --> 01:36:41,129 But one of the reasons we couldn't do it is because, 2039 01:36:41,129 --> 01:36:43,630 we didn't really have the alternative. 2040 01:36:43,630 --> 01:36:45,300 - What's the sound? 2041 01:36:45,300 --> 01:36:48,136 - We didn't really have the alternative technically. 2042 01:36:54,409 --> 01:36:57,579 (jet engine whirring) 2043 01:37:00,815 --> 01:37:03,418 (fire blazing) 2044 01:37:07,255 --> 01:37:09,124 - [Narrator 1] Engineers worked under fire 2045 01:37:09,124 --> 01:37:11,826 to douse oil pipelines set ablaze 2046 01:37:11,826 --> 01:37:13,428 by retreating Iraqi troops. 2047 01:37:18,733 --> 01:37:21,436 Animal fats, and tallow could no longer supply 2048 01:37:21,436 --> 01:37:23,972 the ever growing need for candles and lubricants. 2049 01:37:24,672 --> 01:37:27,842 Whale oil, which had long been the chief illuminant, 2050 01:37:27,842 --> 01:37:29,511 was becoming scarce. 2051 01:37:29,511 --> 01:37:31,980 Yet the demand for artificial light was increasing. 2052 01:37:31,980 --> 01:37:35,984 In 1850, a lamp capable of efficiently burning 2053 01:37:35,984 --> 01:37:38,753 a refined product of petroleum was invented. 2054 01:37:38,753 --> 01:37:39,521 - Oil! 2055 01:37:39,521 --> 01:37:43,691 - Oil! 2056 01:37:43,691 --> 01:37:45,660 - Early oil production, they used steam power 2057 01:37:45,660 --> 01:37:47,029 for the drilling, for the riggings 2058 01:37:47,029 --> 01:37:48,530 of different pieces of equipment, 2059 01:37:48,530 --> 01:37:50,298 and that steam power probably was produced 2060 01:37:50,298 --> 01:37:51,532 by burning wood or coal. 2061 01:37:51,532 --> 01:37:53,535 So you'd use wood or coal to get oil. 2062 01:37:53,535 --> 01:37:55,202 Today, we use electricity to get oil. 2063 01:37:55,202 --> 01:37:56,504 We use gas to get oil. 2064 01:37:56,504 --> 01:37:58,040 So we use one form of energy to get another. 2065 01:37:58,040 --> 01:38:00,375 And that's one of the interconnected aspects 2066 01:38:00,375 --> 01:38:02,210 of energy that's kinda surprising for people 2067 01:38:02,210 --> 01:38:03,710 is how interdependent is. 2068 01:38:03,710 --> 01:38:06,214 We don't have an economy that runs on one form of energy, 2069 01:38:06,214 --> 01:38:08,951 we have an economy that runs on many forms. 2070 01:38:08,951 --> 01:38:12,387 (water splashing) 2071 01:38:12,387 --> 01:38:14,822 (soft music) 2072 01:38:22,630 --> 01:38:24,732 - Part of this equation, 2073 01:38:24,732 --> 01:38:26,001 certainly in the short term 2074 01:38:26,001 --> 01:38:28,170 to this time period you're worried about, 2075 01:38:28,170 --> 01:38:31,339 is modulating consumption and adjusting cultural behavior. 2076 01:38:31,339 --> 01:38:32,574 But people aren't talking about that, 2077 01:38:32,574 --> 01:38:34,076 no one wants to blame anybody. 2078 01:38:34,076 --> 01:38:35,510 If you wanna blame industry, 2079 01:38:35,510 --> 01:38:37,245 well, industry exists because people buy their things 2080 01:38:37,245 --> 01:38:38,413 or use their things. 2081 01:38:38,413 --> 01:38:39,914 So they're the ultimate consumers. 2082 01:38:39,914 --> 01:38:42,050 Are we gonna carbon tax them? Are we gonna punish them? 2083 01:38:42,050 --> 01:38:43,550 Or maybe part of the equation is, 2084 01:38:43,550 --> 01:38:45,087 we all accept responsibility 2085 01:38:45,087 --> 01:38:46,921 and we get a cultural change to take place here 2086 01:38:46,921 --> 01:38:49,191 to go back to where we were 20, 30 or 40 years ago. 2087 01:38:49,191 --> 01:38:50,657 - We might, but that's hard. 2088 01:38:50,657 --> 01:38:54,196 - The vast majority of our individual impact comes from, 2089 01:38:54,196 --> 01:38:57,099 housing, transport and food. 2090 01:38:57,099 --> 01:38:59,166 These are kinda big structural issues 2091 01:38:59,166 --> 01:39:00,934 that can't really be addressed adequately 2092 01:39:00,934 --> 01:39:04,272 by changing the brand of paper towels you buy. 2093 01:39:04,272 --> 01:39:08,010 - We live in an energy consumption society. 2094 01:39:08,776 --> 01:39:12,580 And the way to look at things, 2095 01:39:12,580 --> 01:39:17,419 we have to be aware that nothing comes for free. 2096 01:39:19,221 --> 01:39:21,689 We have to be aware that everything costs energy, 2097 01:39:21,689 --> 01:39:22,857 whatever you do. 2098 01:39:24,026 --> 01:39:26,460 (soft music) 2099 01:39:37,305 --> 01:39:40,308 - This is not what public space looks like in the U.S, 2100 01:39:40,308 --> 01:39:43,145 but I noticed here in the Netherlands, 2101 01:39:43,145 --> 01:39:45,413 everybody's riding bikes everywhere. 2102 01:39:45,413 --> 01:39:46,781 - Yeah. Yeah. 2103 01:39:46,781 --> 01:39:51,386 - And that doesn't strangely require gasoline. 2104 01:39:52,487 --> 01:39:53,755 - Nope. 2105 01:39:56,491 --> 01:39:59,127 (upbeat music) 2106 01:40:02,330 --> 01:40:06,234 - The question is, can we replace 2107 01:40:06,234 --> 01:40:09,071 fossil fuels with renewable energy? 2108 01:40:09,071 --> 01:40:11,005 And this is a very tricky question. 2109 01:40:11,906 --> 01:40:16,644 It raises enormous debates 2110 01:40:16,644 --> 01:40:21,483 and people get angry when you asked them this question, 2111 01:40:21,483 --> 01:40:24,752 because it is not clear what you mean. 2112 01:40:24,752 --> 01:40:29,523 If you mean that you can satisfy people's greed 2113 01:40:29,523 --> 01:40:31,659 with renewable energy, 2114 01:40:31,659 --> 01:40:33,027 then the answer is no. 2115 01:40:33,960 --> 01:40:37,465 If you mean renewable energy could produce 2116 01:40:38,300 --> 01:40:42,770 a sufficient amount of energy in order to survive, 2117 01:40:42,770 --> 01:40:44,672 then the answer is yes. 2118 01:40:44,672 --> 01:40:48,876 - We are in an energy efficient home now, that we've rebuilt 2119 01:40:48,876 --> 01:40:55,383 that our household use alone is twice the size 2120 01:40:55,383 --> 01:40:57,719 of the average American, 2121 01:40:57,719 --> 01:40:59,121 that woke me up, 2122 01:40:59,121 --> 01:41:00,688 I can't count the number of trips 2123 01:41:00,688 --> 01:41:03,325 that I've taken around the world for business, 2124 01:41:03,325 --> 01:41:05,827 but that two international trips, 2125 01:41:07,228 --> 01:41:12,467 was equal to one year of utility energy in my home. 2126 01:41:12,467 --> 01:41:17,405 And that really had me thinking about travel. 2127 01:41:17,405 --> 01:41:20,742 It had me thinking about what I eat. 2128 01:41:23,245 --> 01:41:24,978 - [Michael] Another surprise for many people 2129 01:41:24,978 --> 01:41:27,182 is how much energy we use in the food system. 2130 01:41:27,182 --> 01:41:28,916 - [Narrator] And complete dinners. 2131 01:41:28,916 --> 01:41:30,352 - [Michael] In the United States, 2132 01:41:30,352 --> 01:41:32,219 we use 100 quadrillion BTU of energy a year. 2133 01:41:32,219 --> 01:41:34,255 A BTU is our British thermal unit. 2134 01:41:34,255 --> 01:41:36,824 One BTU is about the energy content of a kitchen match. 2135 01:41:36,824 --> 01:41:38,526 So in the United States, we use 2136 01:41:38,526 --> 01:41:40,928 100 billion million kitchen matches of energy per year. 2137 01:41:45,767 --> 01:41:49,771 10 quads, 10 quadrillion BTU is for the food system. 2138 01:41:49,771 --> 01:41:51,339 One of those quads is in the food itself. 2139 01:41:51,339 --> 01:41:52,874 Food is a form of energy. 2140 01:41:52,874 --> 01:41:55,343 We're ingesting at one quad of food energy into our bodies 2141 01:41:55,343 --> 01:41:57,579 for 330 million Americans every year. 2142 01:41:57,579 --> 01:42:00,248 The other nine quads is for the rest of the food system. 2143 01:42:00,248 --> 01:42:03,050 This is in the agrochemicals, the fertilizers and pesticides 2144 01:42:03,050 --> 01:42:06,120 diesel for tractors, the energy for refrigeration, 2145 01:42:06,120 --> 01:42:08,456 the energy for drying crops at silos, 2146 01:42:08,456 --> 01:42:09,757 warehouses, transportation, 2147 01:42:09,757 --> 01:42:11,393 plus the energy to cook at our homes. 2148 01:42:11,393 --> 01:42:12,627 - [Narrator] Pies are done. 2149 01:42:12,627 --> 01:42:13,861 - [Michael] Three or four quads of that 2150 01:42:13,861 --> 01:42:15,463 is just for the cold chain. 2151 01:42:15,463 --> 01:42:16,798 That's the refrigeration system: 2152 01:42:16,798 --> 01:42:19,267 refrigerated trucks, refrigerated warehouses, 2153 01:42:19,267 --> 01:42:22,304 and refrigerators and freezers at our homes and businesses. 2154 01:42:22,304 --> 01:42:24,406 The energy embedded in the cold chain 2155 01:42:24,406 --> 01:42:26,040 of the food system in the United States 2156 01:42:26,040 --> 01:42:27,642 is more energy than entire countries 2157 01:42:27,642 --> 01:42:30,545 like Switzerland and Sweden consume in a year combined. 2158 01:42:35,250 --> 01:42:38,119 The energy embedded in the edible food we throw away 2159 01:42:38,119 --> 01:42:41,623 is also enough to power entire countries elsewhere. 2160 01:42:41,623 --> 01:42:42,990 Sadly, we throw away like 2161 01:42:42,990 --> 01:42:44,892 a fourth to a half of our edible food. 2162 01:42:46,093 --> 01:42:48,663 (upbeat music) 2163 01:42:52,767 --> 01:42:54,636 - [Wesley] Okay so Michael, here we are. 2164 01:42:54,636 --> 01:42:55,603 We're surrounded by water. 2165 01:42:55,603 --> 01:42:56,804 - [Michael] Yeah. 2166 01:42:56,804 --> 01:42:57,772 - [Wesley] And what's the relationship 2167 01:42:57,772 --> 01:42:59,273 between water and energy? 2168 01:42:59,273 --> 01:43:01,075 - [Michael] The water energy relationship is twofold. 2169 01:43:01,075 --> 01:43:03,278 One is we use a lot of water for energy. 2170 01:43:03,278 --> 01:43:04,946 We use water to cool power plants, 2171 01:43:04,946 --> 01:43:07,315 we use water to irrigate biofuels, 2172 01:43:07,315 --> 01:43:08,782 we use water for oil and gas production, 2173 01:43:08,782 --> 01:43:10,518 we use water to make steam at refineries. 2174 01:43:10,518 --> 01:43:12,454 In fact, if you look all up and down the energy supply chain 2175 01:43:12,454 --> 01:43:14,155 water's at every step. 2176 01:43:14,155 --> 01:43:15,990 - Our well went dry. 2177 01:43:15,990 --> 01:43:16,824 - Dead. 2178 01:43:16,824 --> 01:43:18,326 - Yeah, that's dead. 2179 01:43:18,326 --> 01:43:21,162 - This is where the water, that would be the full mark. 2180 01:43:21,162 --> 01:43:24,866 It's not a fantasy apocalypse movie landscape. 2181 01:43:24,866 --> 01:43:27,369 It's now and it's real. 2182 01:43:27,369 --> 01:43:28,702 - So the grid might be strained 2183 01:43:28,702 --> 01:43:30,538 if you don't have water available for cooling, 2184 01:43:30,538 --> 01:43:32,507 at least the way we have most power plants today, 2185 01:43:32,507 --> 01:43:33,708 where they use heat, 2186 01:43:33,708 --> 01:43:35,777 they then need a water for cooling. 2187 01:43:35,777 --> 01:43:38,045 Modern forms of like solar panels or wind turbines 2188 01:43:38,045 --> 01:43:39,814 don't need water coolings. 2189 01:43:39,814 --> 01:43:43,050 - The average life for PV panels is what, 20 years? 2190 01:43:43,050 --> 01:43:43,951 - 20, 25 years. 2191 01:43:43,951 --> 01:43:45,219 - 20, 25 years. 2192 01:43:45,219 --> 01:43:47,522 - Maybe 30 years, yeah. - So the people who say, 2193 01:43:47,522 --> 01:43:49,391 well, it takes seven years of energy 2194 01:43:49,391 --> 01:43:52,193 to produce this PV panel, but then you're getting, 2195 01:43:52,193 --> 01:43:54,896 that means you're getting 18 years of energy free. 2196 01:43:54,896 --> 01:43:56,398 So you've cut down. 2197 01:43:56,398 --> 01:43:59,133 - Even then you're getting 18 years of energy for free. 2198 01:44:00,234 --> 01:44:01,503 - So me John Q Public, 2199 01:44:01,503 --> 01:44:02,737 I'm like, hey man, 2200 01:44:02,737 --> 01:44:04,572 I wanna put some money into your solar farm. 2201 01:44:04,572 --> 01:44:08,809 - No, not until the government gets involved with things, 2202 01:44:08,809 --> 01:44:12,746 puts us into a pari passu position with fossil fuels. 2203 01:44:12,746 --> 01:44:14,081 - I've got a lot of friends 2204 01:44:14,081 --> 01:44:15,517 who are in the renewable business, 2205 01:44:15,517 --> 01:44:18,052 and there's a really big problem in terms of, 2206 01:44:18,052 --> 01:44:19,821 you know, you've got the power purchase agreement, 2207 01:44:19,821 --> 01:44:21,656 you've got all the permitting done, 2208 01:44:21,656 --> 01:44:23,758 You've even got interconnect agreements, 2209 01:44:23,758 --> 01:44:25,360 except what's happening is, 2210 01:44:25,360 --> 01:44:27,362 grid companies are delaying 2211 01:44:27,362 --> 01:44:28,563 and not letting them on the grid. 2212 01:44:28,563 --> 01:44:29,764 What's going on with that? 2213 01:44:29,764 --> 01:44:31,999 - I think one of the challenges we have is, 2214 01:44:31,999 --> 01:44:33,668 who has access to the infrastructure 2215 01:44:33,668 --> 01:44:35,670 and democratizing the infrastructure 2216 01:44:35,670 --> 01:44:37,271 is a way to open it up so that 2217 01:44:37,271 --> 01:44:39,841 more solutions can be brought forward. 2218 01:44:39,841 --> 01:44:41,075 This is something that we did 2219 01:44:41,075 --> 01:44:43,344 with telecommunications in the 80s with AT&T, 2220 01:44:43,344 --> 01:44:45,179 AT&T had built out all the wires and poles, 2221 01:44:45,179 --> 01:44:46,681 and they were required to open up 2222 01:44:46,681 --> 01:44:48,182 their infrastructure for other companies. 2223 01:44:48,182 --> 01:44:50,284 And that's why we have so many phone companies, 2224 01:44:50,284 --> 01:44:53,054 and long distance companies now that we didn't have before. 2225 01:44:53,054 --> 01:44:54,522 The same thing could happen 2226 01:44:54,522 --> 01:44:56,624 with democratizing the electrical infrastructure. 2227 01:44:56,624 --> 01:44:58,693 More solutions would be plugged in more wind and solar, 2228 01:44:58,693 --> 01:45:00,027 and we have more technologies along the way. 2229 01:45:00,027 --> 01:45:02,096 And this is where long range planning, 2230 01:45:02,096 --> 01:45:04,065 stable governance really matter. 2231 01:45:04,065 --> 01:45:05,532 - Kind of what I'm hearing is, 2232 01:45:05,532 --> 01:45:07,902 it's not a technology problem. 2233 01:45:07,902 --> 01:45:09,136 - No, not a technology problem. 2234 01:45:09,136 --> 01:45:10,271 - It's not an engineering problem. 2235 01:45:10,271 --> 01:45:12,639 - No. - It's a financial engineering problem. 2236 01:45:16,143 --> 01:45:21,115 - [Luka] Energy poverty, lack of food, income inequality. 2237 01:45:21,115 --> 01:45:24,118 So it's up to us now to form the policy 2238 01:45:24,118 --> 01:45:28,121 that is going to help bridge this gap. 2239 01:45:28,121 --> 01:45:31,593 - In 1941, when the United States went to war, 2240 01:45:31,593 --> 01:45:34,295 and people saved tin cans and aluminum 2241 01:45:34,295 --> 01:45:38,833 and gave up, women gave up buying nylon stockings, 2242 01:45:38,833 --> 01:45:41,669 and everything was done for the war effort. 2243 01:45:41,669 --> 01:45:44,338 But the war was there, was right in front of us. 2244 01:45:44,338 --> 01:45:47,273 And young men were being drafted and sent overseas, 2245 01:45:47,273 --> 01:45:48,910 and casualties were coming home. 2246 01:45:48,910 --> 01:45:51,077 And this is different. 2247 01:45:51,077 --> 01:45:56,083 It requires the same type of reorganization or commitment. 2248 01:45:57,018 --> 01:45:57,952 - But why didn't they call on me? 2249 01:45:57,952 --> 01:45:58,853 I could have done something. 2250 01:45:58,853 --> 01:46:01,188 (jazz music) 2251 01:46:10,164 --> 01:46:12,099 - That was then, and this is now. 2252 01:46:12,099 --> 01:46:13,601 Check out our new lot 2253 01:46:13,601 --> 01:46:17,138 the okay solutions lot with millions of new solutions 2254 01:46:17,138 --> 01:46:19,340 and more coming every single day. 2255 01:46:19,340 --> 01:46:22,043 Looking for something that's easy and in your price range, 2256 01:46:22,043 --> 01:46:23,844 check out our pre-owned solutions. 2257 01:46:23,844 --> 01:46:26,448 Like changing a light bulb or walking to work, 2258 01:46:26,448 --> 01:46:29,651 or our mid-sized selections like regenerative agriculture, 2259 01:46:29,651 --> 01:46:32,318 or a price on carbon, or you'll love a variety 2260 01:46:32,318 --> 01:46:35,957 of brand new solutions with that brand new solution smell. 2261 01:46:35,957 --> 01:46:38,660 Like de-leveraging climate risk from the derivatives market, 2262 01:46:38,660 --> 01:46:41,896 or the million mile battery, which is coming soon. 2263 01:46:41,896 --> 01:46:44,999 Just listen to one of our satisfied customers. 2264 01:46:44,999 --> 01:46:47,068 - Michael, you are now in charge of the United States 2265 01:46:47,068 --> 01:46:50,472 Energy policy and you have free reign. 2266 01:46:50,472 --> 01:46:52,206 How would we make the transition? 2267 01:46:52,206 --> 01:46:54,407 - For national security reasons and for economic reasons 2268 01:46:54,407 --> 01:46:55,577 and for environmental reasons 2269 01:46:55,577 --> 01:46:57,011 there are many reasons to do this. 2270 01:46:57,011 --> 01:47:00,748 We need to harden, improve and expand our grid. 2271 01:47:00,748 --> 01:47:02,684 Maybe even using the interstate highways. 2272 01:47:02,684 --> 01:47:04,351 We already have the rights of way and put lines 2273 01:47:04,351 --> 01:47:07,088 above ground or below ground, create a national network. 2274 01:47:07,088 --> 01:47:10,257 And then it will span and reach to the sunny windy areas, 2275 01:47:10,257 --> 01:47:12,259 and already connects to the urban areas. 2276 01:47:14,327 --> 01:47:15,530 And once we have the network, 2277 01:47:15,530 --> 01:47:17,098 we can plug in whatever we want, 2278 01:47:17,098 --> 01:47:19,701 build the infrastructure first, then the energy will follow. 2279 01:47:19,701 --> 01:47:21,168 But we have to put a price on pollution. 2280 01:47:21,168 --> 01:47:23,337 We'll take the money from the price on pollution 2281 01:47:23,337 --> 01:47:25,005 to clean up the trash. 2282 01:47:25,005 --> 01:47:25,940 So let's take the United States 2283 01:47:25,940 --> 01:47:27,675 6 billion tons of CO2 a year, 2284 01:47:27,675 --> 01:47:28,910 put in the atmosphere. 2285 01:47:28,910 --> 01:47:31,178 And let's say we're willing to pay 2286 01:47:31,178 --> 01:47:34,281 I don't know, $30 a ton to remove it. 2287 01:47:34,281 --> 01:47:36,050 That works out to if I do my math correctly, 2288 01:47:36,050 --> 01:47:37,684 $180 billion a year. 2289 01:47:37,684 --> 01:47:39,053 Sounds like a lot of money. 2290 01:47:39,053 --> 01:47:40,287 That's less than what we spend 2291 01:47:40,287 --> 01:47:42,056 on just dealing with trash from cities. 2292 01:47:43,290 --> 01:47:45,392 Why not spend another couple hundred billion cleaning 2293 01:47:45,392 --> 01:47:46,960 up the waste in the atmosphere. 2294 01:47:47,795 --> 01:47:49,731 Let's take the CO2 and put it into the soil. 2295 01:47:49,731 --> 01:47:51,465 Like, let's pay farmers to take the Co2 2296 01:47:51,465 --> 01:47:53,367 out of the atmosphere into the soil. 2297 01:47:53,367 --> 01:47:56,070 (soft gentle music) 2298 01:48:01,909 --> 01:48:04,746 We need to get more of that national security mindset. 2299 01:48:08,550 --> 01:48:10,084 - If you have a built to last strategy, 2300 01:48:10,084 --> 01:48:12,219 then you do want to look at 2301 01:48:12,219 --> 01:48:14,321 what's happening in these longer horizons 2302 01:48:14,321 --> 01:48:16,423 and it's absolutely critical. 2303 01:48:16,423 --> 01:48:19,326 - It's gonna take all forms of energy 2304 01:48:19,326 --> 01:48:22,897 and all people to move us through this transition. 2305 01:48:22,897 --> 01:48:26,166 - Otherwise, I don't think we actually stand a chance. 2306 01:48:26,166 --> 01:48:28,603 (jazz music) 2307 01:48:29,503 --> 01:48:31,939 - I'm trying to get rid of this car, 2308 01:48:31,939 --> 01:48:35,677 but it's like quitting smoking, it's not easy. 2309 01:48:35,677 --> 01:48:38,445 You are so used to certain things 2310 01:48:38,445 --> 01:48:40,782 that it is very difficult. 2311 01:48:43,017 --> 01:48:46,320 - The Romans had done a lot of bad things 2312 01:48:46,320 --> 01:48:47,521 to the ecosystem. 2313 01:48:47,521 --> 01:48:48,956 - Yeah. 2314 01:48:48,956 --> 01:48:53,193 - But, they had not destroyed it as we could do. 2315 01:48:53,193 --> 01:48:58,199 - FEMA estimates for every dollar spent on hazard mitigation 2316 01:48:58,199 --> 01:49:01,702 you save $4 in disaster recovery costs. 2317 01:49:03,170 --> 01:49:04,871 So we're already spending the money. 2318 01:49:04,871 --> 01:49:07,174 There's the sense that it's perhaps too expensive 2319 01:49:07,174 --> 01:49:08,843 to prepare for climate change, 2320 01:49:08,843 --> 01:49:10,645 but we are already spending the money. 2321 01:49:10,645 --> 01:49:13,480 We're spending it after every disaster hits. 2322 01:49:13,480 --> 01:49:15,549 (airplane humming) 2323 01:49:15,549 --> 01:49:17,952 (jazz music) 2324 01:49:20,822 --> 01:49:23,791 - When I was growing up, there was the draft. 2325 01:49:23,791 --> 01:49:26,227 So everybody thought they had an obligation to the country. 2326 01:49:26,227 --> 01:49:30,031 If you went to a land-grant college you were drafted. 2327 01:49:30,031 --> 01:49:32,466 Now it's different. 2328 01:49:32,466 --> 01:49:34,902 The trust in government's gone, 2329 01:49:34,902 --> 01:49:37,304 the obligation to government is gone. 2330 01:49:37,304 --> 01:49:40,742 If we could take some of that spirit of patriotism 2331 01:49:40,742 --> 01:49:45,579 and service and rebuild it into doing something 2332 01:49:45,579 --> 01:49:46,914 for the environment. 2333 01:49:48,182 --> 01:49:50,584 - This entire thing is built out of carbon 2334 01:49:50,584 --> 01:49:52,253 that comes out of the atmosphere. 2335 01:49:55,356 --> 01:49:57,224 - We need a hundred thousand young people 2336 01:49:57,224 --> 01:49:59,526 to give up part of their summer 2337 01:49:59,526 --> 01:50:02,228 and form up and really work this. 2338 01:50:02,228 --> 01:50:04,264 We could control these pine beetles 2339 01:50:04,264 --> 01:50:05,767 that are destroying the forest. 2340 01:50:05,767 --> 01:50:08,770 We could plant new trees, but it should be done not only 2341 01:50:08,770 --> 01:50:13,675 for pay as a guaranteed job, but it should also be done 2342 01:50:13,675 --> 01:50:17,879 for every citizen's obligation to take care of the land. 2343 01:50:17,879 --> 01:50:19,380 That's what I'd like to see. 2344 01:50:19,380 --> 01:50:20,514 - It sounds like you're trying to inspire a whole generation 2345 01:50:20,514 --> 01:50:21,716 of people to pay for it. 2346 01:50:21,716 --> 01:50:23,684 - Well, it sounds like something that old guys would say. 2347 01:50:23,684 --> 01:50:25,019 (laughs) 2348 01:50:25,019 --> 01:50:25,952 - Whoa. 2349 01:50:25,952 --> 01:50:27,855 - Baby baby. 2350 01:50:27,855 --> 01:50:29,290 Can you smile for us? 2351 01:50:30,892 --> 01:50:32,193 That's a good noise. 2352 01:50:33,059 --> 01:50:35,697 It's made me want to be more of a fighter for her sake. 2353 01:50:36,197 --> 01:50:39,532 The transformation is potentially exciting, 2354 01:50:39,532 --> 01:50:41,235 because we can think not only 2355 01:50:41,235 --> 01:50:43,938 about losing things that we have always wanted 2356 01:50:43,938 --> 01:50:45,272 but also letting go of things 2357 01:50:45,272 --> 01:50:47,709 that we perhaps don't benefit from. 2358 01:50:48,475 --> 01:50:51,913 We can lose in order to transform into something else. 2359 01:50:51,913 --> 01:50:55,549 It's not as kind of confident that things will be okay, 2360 01:50:55,549 --> 01:50:57,919 but it finds possibility in a ways that 2361 01:50:57,919 --> 01:50:58,986 things will have to change 2362 01:50:58,986 --> 01:51:01,723 in kind of really dramatic ways. 2363 01:51:02,156 --> 01:51:06,127 (speaking in foreign language) 2364 01:51:25,512 --> 01:51:28,349 - And so we are looking at diversifying the types 2365 01:51:28,349 --> 01:51:31,252 of crops that we are wanting to plant, 2366 01:51:31,252 --> 01:51:35,121 and also work with conservation type programs 2367 01:51:35,121 --> 01:51:37,859 to help preserve species and habitat. 2368 01:51:37,859 --> 01:51:40,427 And let nature take it's course 2369 01:51:40,427 --> 01:51:43,965 and bring back species that we need 2370 01:51:43,965 --> 01:51:47,601 and that the crops actually need to be productive. 2371 01:51:47,601 --> 01:51:50,004 (jazz music) 2372 01:51:53,440 --> 01:51:56,210 - [Warren] We don't want a hurricane or a tropical storm, 2373 01:51:56,210 --> 01:51:58,813 they're already geared up the crops are turned in. 2374 01:51:58,813 --> 01:52:00,614 They wanna go ahead and get finished. 2375 01:52:00,614 --> 01:52:02,282 People wanna know where their food came from. 2376 01:52:02,282 --> 01:52:04,518 Well, at some point maybe people will wanna know 2377 01:52:04,518 --> 01:52:06,053 where their banker lives and who he is. 2378 01:52:06,053 --> 01:52:07,822 And do I have a relationship with him 2379 01:52:07,822 --> 01:52:10,858 that when I need some money to fix something 2380 01:52:10,858 --> 01:52:12,894 I can maybe find somebody to help me? 2381 01:52:14,460 --> 01:52:16,063 - Yeah, I mean, it's not a matter of 2382 01:52:16,063 --> 01:52:17,898 the government telling banks what to do, 2383 01:52:17,898 --> 01:52:19,800 or telling us what we can do. 2384 01:52:19,800 --> 01:52:22,736 No, I mean, there's still lots of possibilities. 2385 01:52:22,736 --> 01:52:26,639 We should have smaller banks basically split them up, 2386 01:52:26,639 --> 01:52:29,309 and not make them too big to fail. 2387 01:52:29,309 --> 01:52:32,847 If they make mistakes, they should fail without causing 2388 01:52:32,847 --> 01:52:34,681 a total systems crisis. 2389 01:52:36,217 --> 01:52:39,585 And probably what also needs to be done is introduce rules 2390 01:52:39,585 --> 01:52:42,489 which make it impossible for the financial sector 2391 01:52:42,489 --> 01:52:45,759 to create within the financial sector itself 2392 01:52:45,759 --> 01:52:47,594 so much additional debt. 2393 01:52:50,197 --> 01:52:54,768 - We have to somehow correct this market imperfection. 2394 01:52:54,768 --> 01:52:57,004 - If you want to have a derivative, 2395 01:52:57,004 --> 01:52:59,073 if you want to hedge your risk fine, 2396 01:52:59,073 --> 01:53:01,541 but you must have exposure to the underlying asset. 2397 01:53:03,710 --> 01:53:05,913 - [Robert] I remember I was watching on TV 2398 01:53:05,913 --> 01:53:08,282 after a major flood down in Florida, 2399 01:53:08,282 --> 01:53:10,517 and they were interviewing this guy and he said, 2400 01:53:10,517 --> 01:53:14,455 "My father rebuilt twice, my grandfather rebuilt twice." 2401 01:53:14,455 --> 01:53:16,723 And he says, "And I'm gonna rebuild again". 2402 01:53:16,723 --> 01:53:18,425 And the reporter turned into the camera and said, 2403 01:53:18,425 --> 01:53:20,094 "That's the American way". 2404 01:53:20,094 --> 01:53:24,231 Well, I thought the reporter should say, that's stupid. 2405 01:53:26,400 --> 01:53:29,270 You can't keep doing it over and over again 2406 01:53:29,270 --> 01:53:31,272 that's the definition of insanity. 2407 01:53:33,707 --> 01:53:38,079 - So it's basically trust in the monetary management 2408 01:53:38,079 --> 01:53:41,148 and trust in the future productivity of a country 2409 01:53:41,148 --> 01:53:43,650 that gives us trust in the currency. 2410 01:53:43,650 --> 01:53:46,387 Not the idea that there are some gold barons hidden 2411 01:53:46,387 --> 01:53:47,487 in the federal reserve. 2412 01:53:47,487 --> 01:53:49,891 (jazz music) 2413 01:53:51,157 --> 01:53:54,594 - And so there is a point of resistance 2414 01:53:54,594 --> 01:53:57,664 at which governments aren't going to be, 2415 01:53:58,332 --> 01:54:01,936 have access to capital to address the problem. 2416 01:54:03,337 --> 01:54:05,072 - We're rich. 2417 01:54:05,072 --> 01:54:06,840 (thunderstorm rumbling) 2418 01:54:06,840 --> 01:54:08,175 - You know, the fear is, 2419 01:54:08,175 --> 01:54:09,943 if we cannot bail out the system anymore 2420 01:54:09,943 --> 01:54:12,746 it will come crushing down with huge side effects. 2421 01:54:13,680 --> 01:54:15,648 The hope and that sounds a little cynical 2422 01:54:15,648 --> 01:54:19,020 but I think the hope is we probably can reorder 2423 01:54:19,020 --> 01:54:21,522 our system only after a crash. 2424 01:54:21,522 --> 01:54:23,690 And I think that human history is such that 2425 01:54:23,690 --> 01:54:26,660 we are unable to make really fundamental change 2426 01:54:26,660 --> 01:54:29,530 in the way we live and the way we organize ourselves 2427 01:54:29,530 --> 01:54:31,132 without such a crash. 2428 01:54:31,132 --> 01:54:34,201 Nobody wants it, and I'm the last person who wants it. 2429 01:54:34,201 --> 01:54:37,603 And if I think back to the 1930s, and I'm German, right? 2430 01:54:37,603 --> 01:54:39,473 And you think about what the repercussions 2431 01:54:39,473 --> 01:54:42,009 of a major crisis can be. 2432 01:54:42,009 --> 01:54:43,877 We just don't know how we would get out on 2433 01:54:43,877 --> 01:54:45,546 the other end of the tunnel. 2434 01:54:45,546 --> 01:54:48,049 I think without this crisis, I just don't see 2435 01:54:48,049 --> 01:54:50,817 enough political leverage to fundamentally alter 2436 01:54:50,817 --> 01:54:53,387 the way we organize our financial system. 2437 01:54:54,621 --> 01:54:56,357 - When climate change happens, 2438 01:54:57,291 --> 01:55:00,061 there will be real problems and it will be real, 2439 01:55:00,061 --> 01:55:02,029 as you said, there will be real scarcities, 2440 01:55:02,029 --> 01:55:04,630 and it will be real migrants coming, and there will be an... 2441 01:55:04,630 --> 01:55:06,200 - And that's what I, 2442 01:55:06,200 --> 01:55:08,169 and then will really be broke because it'll be 2443 01:55:08,169 --> 01:55:11,405 after you've had that collapse of the inverted pyramid. 2444 01:55:11,405 --> 01:55:12,706 And then it's like, then it's 2445 01:55:12,706 --> 01:55:15,376 like asking Somalia to fight climate change. 2446 01:55:15,376 --> 01:55:16,309 - Yeah, yeah. 2447 01:55:18,812 --> 01:55:21,348 - [Wesley] So your criticism would be 2448 01:55:21,348 --> 01:55:23,017 that we're not facing reality 2449 01:55:23,017 --> 01:55:24,818 and not adapting to it? 2450 01:55:24,818 --> 01:55:26,253 - That's correct. 2451 01:55:26,253 --> 01:55:28,655 - My answer to that is, I still have faith in democracy. 2452 01:55:28,655 --> 01:55:30,691 I believe we can do it as a people. 2453 01:55:30,691 --> 01:55:32,994 I believe we can do it as a society. 2454 01:55:32,994 --> 01:55:34,761 And I believe we can take the institutions 2455 01:55:34,761 --> 01:55:37,898 of the United States that have served this country very well 2456 01:55:37,898 --> 01:55:41,035 for over 200 years, and move into the 21st century 2457 01:55:41,035 --> 01:55:43,437 and still help lead mankind forward. 2458 01:55:44,205 --> 01:55:47,108 It's an article of faith, but it's the faith 2459 01:55:47,108 --> 01:55:48,442 that motivates action. 2460 01:55:49,276 --> 01:55:51,278 We have almost all the tools 2461 01:55:51,278 --> 01:55:53,447 and all the financial resources, 2462 01:55:53,447 --> 01:55:57,384 and all the institutions that could solve this problem. 2463 01:55:57,384 --> 01:56:01,288 It's the kind of challenge that could bring mankind together 2464 01:56:01,288 --> 01:56:03,790 in a way we've never been brought together before. 2465 01:56:04,958 --> 01:56:07,193 - I wish there was more conversation, 2466 01:56:07,193 --> 01:56:10,864 more guys on the opposite side talking together. 2467 01:56:10,864 --> 01:56:12,766 Because everybody as we feel, 2468 01:56:12,766 --> 01:56:14,701 there are people feeling opposite from us 2469 01:56:14,701 --> 01:56:17,271 that are just as righteous and all of that stuff. 2470 01:56:17,271 --> 01:56:19,706 But we ought to get together to see... 2471 01:56:19,706 --> 01:56:22,043 - The thing if you get together with people like this, 2472 01:56:22,043 --> 01:56:24,245 what you find is the disagreements 2473 01:56:24,245 --> 01:56:27,081 are pretty narrow actually. - Yes, that's what I mean. 2474 01:56:27,081 --> 01:56:30,384 - The people are mostly agreed on like 95%. 2475 01:56:30,384 --> 01:56:31,618 - Yeah. 2476 01:56:31,618 --> 01:56:33,820 - But, but there are forces in the culture 2477 01:56:33,820 --> 01:56:37,924 that want to sharpen and popularize those disagreement. 2478 01:56:37,924 --> 01:56:38,825 - Yeah. 2479 01:56:38,825 --> 01:56:40,161 - It's a human nature issue. 2480 01:56:40,161 --> 01:56:40,994 - Okay? 2481 01:56:40,994 --> 01:56:41,962 - So what sells? 2482 01:56:43,330 --> 01:56:44,264 Tell me, what sells? 2483 01:56:44,264 --> 01:56:45,398 What do you pay attention to 2484 01:56:45,398 --> 01:56:46,400 when it's happening around you? 2485 01:56:46,400 --> 01:56:47,334 - You gotta find people-- 2486 01:56:47,334 --> 01:56:48,835 - Conflict, conflict, conflict. 2487 01:56:48,835 --> 01:56:50,071 - It's true. It's true. - That's it. 2488 01:56:50,071 --> 01:56:53,273 - To create that kind of a dialogue 2489 01:56:53,273 --> 01:56:54,741 between a father and a son, 2490 01:56:54,741 --> 01:56:57,478 that love thing, I mean, this is my kid. 2491 01:56:57,478 --> 01:57:00,013 You guys must have some wild conversation man. 2492 01:57:00,013 --> 01:57:01,582 - It's what gets me. 2493 01:57:01,582 --> 01:57:03,784 I totally... - This is the basis 2494 01:57:03,784 --> 01:57:05,519 - disagree with that. - of democracy and capitalism. 2495 01:57:05,519 --> 01:57:07,621 - No, I disagree with that. 2496 01:57:07,621 --> 01:57:10,191 (wind blowing) 2497 01:57:19,800 --> 01:57:22,803 (gentle jazz music)