(cinematic music)
Downloaded from YTS.MX
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(soft music)
- It's a free market economy
but it's also a national security issue.
- Okay well I tend to think-- - You're going to be an independant
country, you need to be independant of food.
- I tend to think of climate change
as a national security issue.
- I do too.
- They're not gonna be able to do it
in time the way they're doing it.
And every time, well. - Recognize and adapt
and change policies-- - Okay, let's...
Let's look at ourselves right now, okay?
Let's say this road we're on
is the American political system.
And you see past that bridge up there,
we have to get past that bridge in the next minute,
except this is what we're stuck on
because we can't get there.
And you know this as well as I do.
(rain pouring)
I know people in their 20s and 30s
that will not have kids,
because they're like,
"I'm not gonna subject a human being to what's coming."
Do you think my children who are 15 years younger
than that are somehow gonna go,
"God I always wanted my kids to grow up
in Mad Max eating lizards off the road
and murdering their neighbors to get a glass of water."
I mean, things are gonna break down.
- [Wesley] Wesley the passion that you
and so many others have on us this
is what gives me hope in democracy
and hope in the future of the country.
That's what it's gonna take to make change happen.
(soft music)
- [Wesley Jr.] I think we're living in a rigged system.
And I think it's very hard
to break out of that rigged system because money talks.
(soft music)
- I drove down from San Francisco yesterday on Highway Five
and it's bumper to bumper
for 300 miles on (laughs) Highway Five.
And you can think, God, that's just a small part of it.
So we know in these big urban areas
like the Los Angeles Basin, metropolitan New York,
we know that, we live here for convenience.
We live here because civilization works,
but we also know it is relatively fragile.
It depends on power, it depends on water.
It depends on food, it depends on warehousing.
It depends on security and people following the rules
and obeying the laws.
And it only takes small disruptions to that.
Whether through natural disaster, through climate change
through organized crime or through war,
through exogenous forces.
And you'd see catastrophe.
- [Narrator] It's easy to see how things can fall apart,
Long tunnels are now pitch dark.
(cars passing)
Communications and telephone systems have collapsed.
On motorways cars simply pull over,
if they find a place with a signal.
(man speaking foreign language)
People now stand in line
outside supermarkets, not to go in,
they're just hoping that it will eventually open.
(people chattering)
(wind blows vehemently)
(speaking in a foreign language)
- Combination of the weight of scientific evidence.
And the dynamics of the financial system suggest
that in the fullness of time,
climate change will threaten financial resilience
and longer term prosperity.
- All the money in the world will not save us
once it starts to fail.
And then people will discover
that you can't eat a flat screen TV
and you can't eat a German luxury car.
(pressing salt shaker)
(tries to open door)
- What are we gonna do?
(engine revving silently)
- It's war.
And it's a much more serious war than World War II
because if we lose, we're all dead.
I mean, you'll already be dead.
So maybe it doesn't concern you as much
but I don't want my children to starve to death
- You're writing me off really early.
Please don't write me off so early.
- All right, 20 more years
(children screaming)
- Looks good doesn't it?
- It does.
- It's a great part of America.
It's like an American icon.
My generation was the Beach Boys.
- Yeah.
- Surfing USA.
- Yeah. (water splashes)
- So, you know, tourist heaven.
- Yeah.
- But if I were a tourist from another planet
and I was like, "Hey, let's go visit earth."
And then my travel guy was like,
"well it's populated
by about 10 billion carnivorous apes and they're armed."
- My goal is to see... - Let's give you 20 more year
Is to see your children
grown, educated, married
and I wanna have great-grandchildren, that's my goal.
- Okay, if you wanna have great grandchildren,
what you have to do is you have to help build
that environment that they're gonna survive in.
- I want you to see the facts as they appear to me.
I'm a national security guy.
That's what I've spent my life working on
trying to protect America, the constitution,
the way we live and our futures
for our children and grandchildren.
- I love my dad we're both concerned about security.
We're both concerned about the future
but there's definitely a difference
in the generational perspective of this.
Now I understand his generation because they grew up,
right after World War II, the baby boomers.
They grew up in a world that was constantly improving.
(car hooting)
More rights, more money.
The economy constantly expanded.
They saw us go from fairly primitive industrial society
to what we have today.
- There've been empires that formed and collapsed.
And about 200 years ago, mankind suddenly discovered
how to take energy more effectively from the earth.
In the start of the industrial age.
And it was coal and it was England.
And it was a steam engine that could use that coal
and it spread throughout the whole world.
We have taken that energy
and built this civilization from it
and the price that's being paid
is the carbonization of the atmosphere
and climate change.
(car engine roaring)
- Yeah, that's the finale.
(upbeat music)
- You know, when you say in World War II,
everybody chipped in and did their part.
And that was seventy-five years ago.
Now we've been involved in so far, a 19 year war.
And in that 19 year war,
we were told to go shopping
and to buy more stuff.
We were never told to save anything.
We were never told to contribute to a war effort.
They even cut taxes
when we went to war - That's right, twice.
- Twice.
(upbeat music)
With gambling, the house always wins and it's a rigged game.
It just is.
Not unlike the banking system
in our political system nowadays.
It's all rigged. People don't
have an actual choice in a lot of stuff.
Yeah, people have a choice to go to Vegas.
- When you ran for president,
I drove all over New Mexico and other places.
All I could think in 2003 was that,
we can't actually build an economy
off stripping, gambling and crystal meth.
And we've made a concerted effort to do that
in this country for the last 20 years.
- You know, our business caters to what people want.
American societies produced enormous amounts of leisure.
- They've tried to recreate the feel of the Roman Empire
in the heart of Vegas.
And interestingly it's like late Roman Empire.
So it's right, as everything collapsed.
- We have the smarts and the know-how
and the conscience to know
we have to sustain and protect this earth
because this is where we live.
So we love civilization,
but we've got to change
the way we're approaching our economic endeavors.
- The world is suffering
through the worst financial crisis since 1930s.
- There's been a lot of damage done.
- They hear $700 billion package,
and they immediately think the next day
everything is gonna be better.
- You're witnessing so much wealth loss.
- If you connect the financial system
to the other possible shocks that are out there,
you realize it's, we're walking on ice.
- Panic coming through the phones,
on the floor, traders just trying to rush
to get to the point of sale,
to get rid of their stock.
- [Man] You know, what people built up
over years and years and years, has been erased.
(bell ringing) (people applauding)
- At some point, you run a risk that something goes afoul.
We're worried about Greek debt.
We're worried about Italian debt.
- Spanish debt.
- I mean and so far, you know, it's been finessed,
but, and you know,
you can't see what the U.S Treasury is doing behind.
We're doing a lot with the U.S Government
to keep the system working.
And you just don't know what the limits are.
- So if you think,
how can we lead the world in fixing the economy
and fixing the climate?
You have to make the investments now.
Because you can't wait till you're like Somalia.
I mean, you may notice
Somalia doesn't have a lot of infrastructure programs
that they fund.
They're not pushing the boundaries in technology,
and that's not because people in Somalia are stupid,
it's not just because they've lived under civil war,
it's because they don't have capital.
They don't have resources.
- Capitalism is an economic organization.
It's a way of organizing the economy
that is focused on trying to create future returns
over and above of the investments I make today.
So it's all about expansion.
It's all about making more in the future
than we currently have.
- When you borrow money,
well, what happens is,
the banks would like to charge you interest
not only for the risk,
but because they want the capital to come back with babies,
not just to go and that's it.
Because they want to make sure that capital is increasing
and that's how you build wealth
and that's how you increase your assets.
- And it's that debt that has enabled
all of this to be here.
It's the accelerant to economic growth.
- Now, as long as the company
can service that debt, it's okay.
But consumer debt,
if it can't be serviced, is a problem.
Mortgage debt if it can't be serviced,
as we've seen is a problem,
and national debt, if it can't be serviced,
can be a national security threat.
- Alexa, how do we avert a financial crisis?
- [Alexa] Here's something I found on Wikipedia.
A financial crisis is any of a broad variety of situations
in which some financial assets
suddenly lose a large part of their nominal value.
- Preparing for the future, when the future is unknown,
is obviously difficult,
but we are today taking steps
that are clearly going to make things worse.
- Finance is really making big bets
on an uncertain future.
And you wanna be careful about making too many bets,
especially when there is some indication
that the future might be very different from the present.
(insects flying)
(upbeat music)
- [Wesley Jr.] So much of our energy's caught up
in the financial system
that we've neglected the investment in real things
that are required to take the country forward.
- We do, we haven't really come to grip with this yet,
because the economic system,
the political system just doesn't wanna face it.
(upbeat music)
- The economy has grown,
but debts, indebtedness of households,
firms, banks, governments,
the debts of all these actors in economic system
have increased much more than GDP.
- Really?
- Yeah. So let's say,
I think maybe in the 1970s or so the,
total debt of all these actors, households, firms, banks,
government, the total debt to GDP ratio was maybe of,
of the order 120%.
And now that has increased very steadily
over time to about 290%. So--
- So if no one got paid for three years
and continued working the whole time.
- Exactly. Yup, yup.
- And didn't eat or drive cars or anything,
we could pay that debt?
- Yeah. Yeah.
- But does the debt matter?
- Well, I mean, the debt matters to some,
to the extent that we have a system,
it is called capitalism.
And in that system,
laws are telling us that debts have to be repaid.
(soft music)
How much debt do we need to generate $1 of GDP?
For the economy to create one extra dollar of income,
we need, we are relying on $3.30 of extra debt.
(soft music)
An income is basically wages plus profits.
That is what GDP is, you can also call it differently.
You can say it is value added, created by producing stuff.
- And as a result of emphasizing on the GDP,
we've ended up in a situation where the market is going on.
There is some selling, there is some buying,
but we really don't know how well people are doing.
(soft music)
- [Wesley Jr.] You know, when we were kids, $1 of debt,
pretty much created $1 of GDP.
- Oh wow.
- So, you know, it's like Keynesian economics,
you put the money into social projects
and it recycles back into the economy.
But today it takes more than $3 of debt
to produce $1 of GDP.
And that's all occurred in the last like 30 years.
- Wow.
So in order to create more money,
you've gotta create more debt.
- Three times as much debt.
- That's insane.
- More than three times as much debt.
- It's that access to credit and the kind of ability
to take on lots and lots of debt that hasn't been able
to sustain this kind of trend in consumption.
- So there is a very, very strong relationship
between increases in income
and increases in carbon emissions.
(soft music)
- In the U.S, which is already kind of the most
disproportionately high energy producing,
high consuming country per capita spending grew 42%
overall from 1990 to 2008.
With a 300% increase in spending on furniture,
an 80% increase on clothing and a 15 to 20% increase
on vehicles, housing and food.
Despite the fact that wages were pretty stagnant
over that time period.
(soft music)
- So this is the Wall Street Bull,
which is a symbol of a positive market,
which means more people are spending money,
than spent it the day before.
- Our democracies basically have become dependent
on the idea that there will always be more to go around
that we can expand, expand, expand.
We know that there's fundamental uncertainty.
We just don't know what the future will hold.
(soft music)
- Over the course of my career,
I've worked in mathematical modeling.
I was a space physicist for NASA
and I was on pretty big projects.
I was on the Hubble Space Telescope team as a scientist.
(soft music)
I was on mission to Mars as a space physicist.
And so I'd worked on in some pretty big areas.
When people say, well,
how do you know that the climate models that we have now
will be accurate in 30 years time?
What I can tell you is that the models that we were working
on 30 years ago are actually unbelievably accurate.
(soft music)
What's happened with the atmosphere,
is we're seeing this type of instability, kind of like,
you know, if you had a top just standing there,
it'll just fall over.
And so you're seeing that type of,
that type of wobbling and instability.
I don't exactly know how unstable things are going to be,
but to me, it's the volatility and the instability
that's even more concerning than just
the pure temperature rise over time.
Let's say that inflation were to go over the top,
stock market crashes.
Let's say there are all kinds of sanctions on exports.
You can't even export your tech.
You know, all you're left with,
to survive is you and your environment.
(grasshopper buzzing)
- You know, one of my goals this year was actually
to get more educated on climate change.
And I took the path
that I was gonna see both sides of the argument.
And what was interesting to me was I could find
very little in the climate denial space.
The more I read, the more I see around me,
the more I get concerned.
- [Katie] The officials came out and said,
we're gonna have to release the dams.
And I remember looking at my husband
and looking at my daughter and the dog and the house
and thinking, am I in the middle of some movie?
- So I'm 5.8.
And the water reached to about right there.
Until it happens to you, you don't,
you don't believe that this can happen
in the United States of America.
And all of your financial stability is gone.
So if we have, God forbid,
any other emergency that comes up and believe me,
that is a source of a traumatic kind of panic
that sets in when we go, Oh,
you know, what if something happens,
what if there's another emergency that,
that arises, then we have no funds.
- Never did I ever imagine that everything
that I would work so hard for would be taken
from me in a matter of hours.
And so I do believe that climate change
is going to have a huge economic impact.
And what wealth you have can be eradicated
in a matter of hours.
(soft music)
(helicopter blades slapping)
(helicopter engine revving)
- We had a house up here on the hill
that my wife wanted to get out of
because it was dangerous for the fires, you know.
- Yeah.
And the climate change, everything's getting crispy,
so we'd better get,
to somewhere where we're not gonna get burned up.
- Yeah.
- So we moved to this beautiful place
and the fire didn't get us.
(laughs)
But the debris flow after the fire wiped us out, man.
We had like mud four feet here, huge rocks.
- You were here, right?
- Oh we were. - How did you get out?
- Rescued by helicopter man.
- Jesus.
- I said, you know, I said, my wife, we, you got a sheet?
And she said, yeah.
I said, what are you gonna do with the sheets?
I said, I'm gonna write, help out there, you know.
She said maybe make it SOS, I say that's a good idea.
(laughs)
Went out there and drew SOS, in the mud.
And pretty soon, (smacks)
they come, they let a guy down, and they said,
we weren't sure if it was a SOS or an area code,
it looked like it could have been 805.
And I said, well I gotta work on my esses man.
(laughs)
But we were lucky, you know, we could afford to...
- Well people died, people died in this, right?
- Oh! Terrible, people were washed right through our place.
And we were the lucky ones. You know, we had the money,
to refurbish this place.
- I know, yeah.
- But you know, imagine,
people, you know, struggling all over the world
with this climate change.
- That's the way It starts it's, you read about it
and It seems far away.
But then something happens and bang it's right on you
and it gets very personal. - That's right.
- Hey, I hope you went quick, that's all I can say.
I hope you went quick.
Oh my gosh.
Words can't describe it.
- Global systems of finance are deeply connected
and based on housing finance
in places like the United States.
So if you get in a situation where a homeowner,
can't, can't pay an insurance premium,
can't hold on to their mortgage, for that reason.
Defaults on a mortgage, goes into foreclosure.
You have kind of, your setting in motion,
the sort of early parts of the story
that we know is a very familiar one from 2007 and 2008.
- And we're not particularly good,
at preparing for difficult times way in the future,
when in fact we've got difficult choices right now.
- When you survey people in the U.S
and in the UK about sources of stress, it's work and money.
(slow jazz music)
- Alexa, how do I solve our economic problems?
- [Alexa] Sorry, I don't know that.
- We're heading off the cliff, in terms of climate change.
There's a real urgency on this now that cannot be denied.
- I grew up in the heart of the military industrial complex.
My father became a general, after I went off to college.
I went to the foreign service school at Georgetown.
Madeleine Albright was one of my advisors in college
and I thought, I know how the world works.
There are people in charge. There's some with a plan.
There's someone running stuff.
When my father was head of NATO and I got to go over there
and visit and hear the kind of questions that senators
and congressmen were coming up with.
I realized, whoa, no one's running anything.
And the mistake that the great majority of us make,
is that, there are groups of people running things.
Someone has a master plan, there's a cabal
or a conspiracy behind it all that's running it.
And it's just not the case.
(fire roaring)
(water burbles)
- Hey Wes.
- How was the conference?
- Good.
- No, I think, well I think they,
I think they really wanted to hear what's going on
and what the challenges are.
- Yeah.
- And that's what I gave them.
- Kind of reading this thing about Venezuela you see.
What happens when an economy collapses.
- Total collapse.
- I mean, is it, was it just initially the oil prices or...
- They've tried to make it a populist democracy.
You know, where now Maduro is, is a dictator,
but you know, supposedly people like him,
but in an actual fact Cuba's in there.
And I was down about six months ago in Colombia.
And they were telling me that actually,
the Cubans are going up to the Venezuelan army
and they're disarming them,
because they don't trust the Venezuelan.
This is the way you take over a country.
You're getting rid of,
you know, you put your security forces in,
and then you build up your extra military force.
And then you go to the military
that might be loyal to the country
and say, give us your weapons.
So a lot of Venezuelan militaries become refugees.
- Oh wow.
- They were disarmed and sent out of the country, yeah.
And there's millions of people that are just there.
They lived there, they were born there
and they're struggling to survive.
- It's a, I mean, we're heading in that direction already,
before we've even had the economic breakdown.
With armed groups in the streets.
You had 20,000 armed people in the streets yesterday.
- Well that was just a demonstration.
- Brought guns, you don't bring guns to a demonstration,
unless you're demonstrating you'd like to kill people
that don't agree with you.
- Venezuela can be an example of what happens
when civil society breaks down
because you don't have stable,
transparent rule of law government,
and you don't invest in your infrastructure the right way.
In many ways, Venezuela is a leading indicator
of the challenges that will face the whole world.
- [Narrator] Many like Erin Burgos feel they have no choice.
(speaks in foreign language)
What was once one of Latin America's wealthiest countries,
is now its most chaotic and dangerous.
(car honking)
- But that's what happens in these countries.
- But by these countries, you mean countries
that have incompetent leadership.
- Countries that are failing
to take care of their people.
But they compensate for that by,
setting up repressive mechanisms,
to ensure that they stay in power. (laughs)
- I just worry about it happening in the United States.
We have a country like Venezuela where the first thing
that collapsed is their energy infrastructure.
- Yeah. - And then now we're finding out
that it's not just electrical
and oil pumping now their water infrastructure is collapsing
and this is a country that's tropical,
that's filled with water.
- The energy sector has not received the training
or investment it needs, and the experts were kicked out.
They said the energy sector
in particular the oil sector is collapsing.
And that was a major source of revenue for the country.
At the same time, you have significant drought in a country
that has a lot of water,
which means the dams cannot produce
the same electricity as they used to.
So you have collapse of the electrical sector,
along with the oil sector, along with civil society.
And this means you also have
collapsing water infrastructure,
because even if you have the pipes,
if you don't have electricity, you can't operate everything.
So severe strain, which means food shortages,
riots, lack of money, this is a major problem.
United States and Europe is rich,
but if we choose to under invest in our infrastructure
and if we choose to not prepare for the future,
we could suffer these kinda consequences as well.
- The impact of climate change
is not a straight line function.
It's clearly
a progression that is accelerating
in magnitude very dramatically.
And so any lapse at this point in responding
is going to have, I think, a critical impact
down the road, much sooner than we would anticipate.
- This is a crisis waiting to happen.
It's a slow moving crisis in front of our eyes.
- So when you see in a movie,
an asteroid's gonna hit us in six months,
but Mr. President we've been working
on this potential problem for six years.
In real life the asteroid takes everybody out.
The same goes for climate change.
The same goes for a whole host of issues we have
because when people see something on TV
and look, politics is a confidence game.
When people look at the politician and they go,
he must know what he's talking about
or she must know what she's talking about.
That doesn't mean there's an actual plan with any kind
of systemic machinery behind it to produce results.
(upbeat music)
- As the water start to recede
the financial costs will add up.
- Are you tired of living in a home like this
when you really wanna be living in a home like this?
Let's check it out.
We've got tons of waterfront property,
and more coming every day.
Century 22 now serving parts of California.
* Best sparkling drinks are just dandy *
* The cho--
- For those of you that went to the mountain
and enjoyed that 16 feet of brand new, fresh powder,
nice job.
But as you can see, we've got a hot front coming in,
so tomorrow there's gonna be 155 degrees Fahrenheit.
So you might wanna break out those Speedos.
- You read the big article about Peter Teal,
who's the guy who's made the big fortune off tech,
has bought and built bunkers in New Zealand, right?
Because their plan is we're all gonna die,
and then they're gonna ride it out somehow
even though they won't.
But there's the belief that their money will insulate
and shelter them from what's coming
and for all these people-- - For climate change
- Who predicted doomsday.
- Yeah I mean, I've heard, you know,
I've heard climate change likened to a world war.
You know, the difference is that we know a lot more
about what's coming.
- Come on down to our luxury survival condo
and don't let the Armageddon get you down.
- So unless you can produce thousands of years
worth of water and air and food in your underground bunker,
you're not gonna make it.
And the most likely outcome will be that
the construction workers probably non-union
that you paid to build this bunker for you
know exactly where it is.
And they have access to all the tools to dig you out of it
like a truffle.
The sooner people start using their money as a tool,
instead of a goal in life,
the faster we're gonna be able to dig ourselves
out of this hole.
- Okay, so dad, we've,
I know you don't wanna pay attention
and you don't wanna be... - I do.
- Filmed with miniatures, because it could, you know,
you don't wanna look like the guy in Dr. Strange Love
or any other-- - Exactly.
- Retired General playing with things--
- That's exactly what it looks like.
- But, look, we need to set up something
that people can understand how it works.
We have like a grocery farmer, another store here
a bank, a homeowner, and then emergency services
and over here's like nature,
or we'll even say foreign country
or Africa, or somewhere else.
So, but the first thing I gotta do is change
how everything's set up,
because we need the bank
in between
the country club and everybody else.
- We have a huge financial system compared to what the,
what I can call the real economy
that is where people work and produce, and live.
(upbeat music) (people chattering)
- What we were talking about was trying to explain
capital, structures and insurance
and financing and mortgages using children's toys.
So we have money-- - Is it gonna work?
- I don't know if it's gonna work. (laughs)
- First thing is, the grocery store is a business
and it makes money,
and they deposit the money in the bank.
- Okay. Boom.
- Okay?
John works at the grocery store
and he gets paid by the grocery store
and he decides he wants to buy a house.
- Okay.
- He doesn't have enough money from his earnings
to buy a house, but he goes to the bank and the bank said,
"Oh we'll give you the money, to buy the house,
and in return, you'll give us an IOU."
(upbeat music)
- We have to look at the house
is it, does it pass inspection?
- Yeah, pass inspection.
- And can you afford it based on your monthly income?
- Well,
- The answer, say yes.
- Yes. - Okay, good.
So here's a mortgage.
Okay, so here's the money and-- - And by the way, this is just
like a real bank, because in the real bank,
they're not sure can this guy pay for it?
Just tell him yes, tell him yes, come on,
lets get the money. - So it depends on paying.
- We typically think that bank takes deposits from us
and then lends it out.
The balance sheet equates one entry on this side,
another entry on that side, has sort of claims to come back,
and if it's really comes back as expected,
they make a return on that.
And it's basically making money out of thin air.
- In the old days,
I would put this mortgage, and I would say,
"This is an asset for me,
"because you're gonna pay me every month
"to pay this mortgage off," right?
- So you're telling all your buddies you had that.
- Well, I found a better way to make money, okay?
So the bank takes the IOU, and the bank sells the IOU
into the what's called the secondary market.
- Okay. And it gets a fee for that.
- Then once I have this mortgage and maybe the mortgage
for many other houses in the neighborhood,
and ideally from other neighborhoods as well,
I throw this into what we call a special purpose vehicle,
which really, in legal terms, is typically a trust
or a corporation, these assets-shielding devices,
and then you issue claims
against these new legal shells to investors.
(retro jazz music)
- They package these IOUs up so there's many of them,
and they sell them to people like insurance companies
or foreign banks, and they can be leveraged.
- Which means I can make loans off these things,
which are loans.
- Yes, because you have leverage here.
So you can make more loans.
So the system always generates cash.
(water splashing)
They can reduce their risk
because they're not just buying a mortgage,
they're buying a package of mortgages.
In some cases, they're just buying a slice
of the interest rate off a package of mortgages.
And so, all of these are called derivatives.
And everything works, as long as there's an expectation
that the loan will be repaid,
that John will, at the right time each month,
give the bank money to pay down his share of the IOU.
(old timey piano music)
So the old way the banking system worked,
it used to work that the banker would look you in the eye
and say, "Are you credit worthy?
"Can I trust you?"
- The banks really aren't keeping
the mortgages on their books anymore.
They're selling those mortgages
so that they can be repackaged
as other kinds of financial instruments.
So, they're able to sort of pass the buck,
pass the risk off to the next person.
- Depending on how they're rated by the rating agencies,
these are reputable investment opportunities
for retirement funds, sure.
Yeah, pension funds, sure, put 'em in here.
- So the investors are buying an interest
in the cashflow that comes from the homeowners
into the pool that we've created,
but have sort of a claim against this house as well
because this cashflow is backed
by the mortgage against the home.
So something as illiquid, as formidable
as this building and the land it stands on
can become a globally tradable financial asset
through appropriate legal coding.
- This is your loan.
It travels through this system.
The bank has the loan,
(stamp smashing)
sells it, it becomes a security.
It becomes part of the balance sheet
of money market mutual funds.
These money market mutual funds then basically exchange
your loan, your collateral, your house
in a collateralized cash deal, and the whole purpose
of both the cash and the collateralized cash deal
is that it allows the various actors
to operate in derivative markets
and make very high rates of short-term return.
(wheels creaking) (bell dining)
- Today, debt is treated like an asset.
It can be traded globally, right?
So we made a huge jump from let's say the 12th century
when the first assignable notes came about,
to treating debt as an asset
that we can just trade on a global market.
(slurping beverage)
(jazzy piano music)
- At the bottom, there's tangible value.
The same value is used, not just one time, but two or three
or four times in the financial sector trading.
It is not going for productive investment in firms.
It is also not going to finance and fund
climate change mitigation and de-carbonization.
Money creates more money.
Wealth creates more wealth.
And this is a circle, and it just rolls on.
At the end of the day, it's our houses,
the value of our houses, which are backing this up.
The IMF has called it "the shadow banking system."
"Shadow" here doesn't mean that it is illegal.
It also doesn't mean that it is necessarily shady and so on.
It is just that it is shadow because there are no rules.
It's hardly any rules.
It's sort of almost the Wild West of the financial sector
(dramatic Western music)
- And a problem with the derivative market
is there is no market.
So it's like one-on-one swaps between bankers.
It's like you and I say,
"Hey, I know what bank you're working for,
"and so I've got some bonds,
"and I want you to insure 'em for me
"in case the interest rate changes.
"Would you insure these bonds for me?
"How much would you charge?"
You tell me a price.
I say, "That's a good deal.
"I'll get a bonus for setting up the insurance.
"You'll get a bonus
"for taking in the money to do the insurance."
- But I work at a different bank.
- It's a good deal.
- And I heard you just bought those.
And I figure I could also get those,
'cause I know a guy in Saudi Arabia or China
that would pay two cents more,
and I could make 50 grand off it.
- You wind up so far from the underlying.
- The thing is, it's like the old insurance principle, it's
"How many people can insure one person's house"?
Can each person in the neighborhood put a $100,000 policy
on that house and each person collect $100,000
when the $100,000 house burns down?
(explosion roars)
(fire crackling)
(explosion booming)
- As Americans, we're shortsighted,
and we don't think long-term
and financial literacy was not this complicated
100 years ago. You had a little bit of money,
and probably didn't even have a bank account.
You paid your bills, and you passed bills around.
- And you kept it under the mattress.
- Right, or you kept it under the mattress.
Shh, that's not where mine's at.
- The critical derivatives for our financial markets today
are actually the ones that brought down the financial system
in 2008 were the credit default swaps
and the collateralized debt obligations.
And the credit default swap is basically
a kind of an insurance contract,
which basically says, "If some assets in the markets
"decline in value, the insurer has to pay me a fee."
And the beauty of the CDS, the credit default swap,
was that you didn't have to hold the asset yourself.
(fire crackling)
It's like me taking out
a fire insurance on my neighbor's house,
and if that house burns down, I get the premium.
- The value of these financial transactions
is much, much larger than the tangible, real capital,
which is basically the houses of the families,
the households, the notional value
of the derivative market is $600 trillion.
And that is about let's say,
eight to 10 times as large as global GDP.
- So an American city with
how many trillions of dollars
of real estate value right there,
or at least hundreds of billions,
will no longer be there.
Like, how does that work?
How does that work in the banking sector?
How does that work in the insurance market,
the re-insurance market,
what's been collateralized off that real estate?
- This is not just different actors,
exchanging in different markets
or in different legal transactions,
our financial system is such that we have huge banks,
mega banks, too big to fail banks,
very often operating both sides of the same market.
- The big banks, they don't necessarily know how much risk
their counterparty bank in some other country
is willing to undertake. - No one really
understands the legal interdependencies
that are built into these contracts,
and that can ultimately bring down
the entire financial system.
- The system is so complicated
that the accountability is lost.
- So the real value is actually here.
These are all the transactions
which are built on top of the real economy.
(soft music)
- Then there's Dougherty.
The small town of Dougherty is not,
not a whole lot there today.
Just it was a town that once had a general store
when I was growing up, had the church,
had a post office, but you know, not anymore.
- Agriculture and rural America has gotten a preview
of the automation that's about to hit
the rest of the country in the next 10 years.
- We're here at the town square in Dewitt, Arkansas.
And if you look around, I mean
there's not a ton of bustling businesses here,
but one of the busiest businesses
is Department of Human Services.
(soft music)
So when we define the real economy, let's not forget farms.
88% are still small family farms.
- So this is a grain storage bin
on my parents' family farm.
(soft music)
- This is my dad's place.
He's gonna be 87, mom's 85.
They've lived here since 1956.
So, a lot of years.
- And we are a team.
- How many times you have to have intense rains,
heat spells, freezings at the wrong point to get the crops
to not come in once?
- We do protect our farmers, we give them crop insurance
and the crop insurance is subsidized.
We have agricultural extension services,
and they pay for that, but they probably don't pay
the full cost of that.
It's a free market economy but,
it's also a national security issue.
(birds chirping)
- Federal crop insurance program
was started as a response to the effects
of the dust bowl and the Great Depression.
Many, many areas throughout the United States were,
were severely affected by the Dust Bowl,
many farmers lost everything.
In addition to most of America
being devastated by the depression,
farmers acutely suffered during that time.
(somber music)
Many parts of the plains
were just completely filled with dust.
Many crops were lost due to the weather,
the extreme weather, due to insects.
(somber music)
- But it's the large scale like my dad said,
the large scale events that everybody kinda worries about,
like a big drought.
- I think that our aquifer in some places
is down to like 20% and then a lot of places at 50%,
and we're actually using more water than
we have at any other time.
We have our pumping plants in
and we're building on canals
and this is actually the first phase.
We're trying to get water to this, this Indian bio
and then we're gonna use that for the main water supply.
In Arkansas, we're gonna have a drought event,
every growing season.
It doesn't matter, if we just came
like this last flood that we had here,
as soon as we came out of that flood event,
we were irrigating because our soil is, it's not real deep.
We have what they call a hard pan underneath it,
pretty close to the surface
- Which helps with the rice growing.
- Yes, very helpful.
It just gets more expensive every day.
We thought we were gonna have
a lot of infrastructure money maybe to come about,
but it hasn't come about.
- And its federal infrastructure money that coming?
- Well, the way that was originally set up was that,
the federal government was gonna be responsible for 65%
the state 10, and our local district, 25.
And there's a lot of people benefit from this
other than just the farmers,
but that's, who's got to pay for it
'cause those are only the ones
that's actually using the water.
- And I'm assuming we'll have to do
a whole bunch of stuff like that.
As temperature rises and rain patterns change.
When every person we've talked to about farming
and different methods of farming
whether it's till or no till or organic or not.
(tractor engine purring)
Each piece of land is different.
And each little community is different.
And the ecosystem there is different.
So how can a giant JP Morgan,
how can they service a community like this?
- Well, and why would they want to? - Yeah.
- That's the rest of the story.
I mean, that's not gonna be a profit center
for them to come out here and look at a man
that's farming 2,000, 3,000 acres.
They're looking for 20, 50,000 acre farms
to where they can justify spending some time on them.
- The relationships with the banks they've gotten big too.
But it used to be these smaller banks
and they knew your dad and his dad.
If you went to a farm sale and "Hey I liked this tractor."
and it was $27,000.
You just call the bank and say, "Hey, I need it."
"Okay, it's in your account."
(gentle foreboding music)
- 60 years ago if you made a crop, you made money period.
If you made a crop, you paid all your bills
and you could send your kids to school
and you buy your groceries.
You were okay.
Today, you can make a crop and lose your assets.
(gentle ominous music)
(tractor engine revving)
- Everybody out here, it's all family and,
I mean, if you were 30 years ago when we did this
we get all, a combine was $35,000.
And now a combine is $400,000.
(light airy music)
- When you're looking at machines that,
so by the time you have your headers
and your everything to go with it
being upward close to half a million dollars.
Where else is someone else buying
half a million dollar equipment
and I'm barely making ends meet.
(tractor engine revving)
It gets more challenging every year.
- The cost of production and agricultural costs
or just to be a farmer and even a small farmer
are almost cost prohibitive
unless your family has been in farming for generations.
- Thank God almighty for such a good looking crop
while others have had to struggle.
(light airy music)
- Oh, here's some fellows.
- Yeah, that's who we're riding with.
Y'all be riding with him.
(phone ringing)
(indistinct)
Alright, thanks Zach.
See you there.
(tractor engine revving)
- Farms are similar to owning a house.
You've gotta clean the gutters.
You've gotta sweep the sidewalk.
And the same thing with a farm
you've got certain maintenance that have to be done
on annual basis to keep it in a working order.
- Before automation, everything in here is handwritten.
- 24th, 1955.
- Yep. And everyday...
- And that's everything that happened during that day
all the money that came in.
- They made four loans.
Like this is, these are the loans that we made that day.
And you see the size of the loans; $150, $500.
- The countryside across America
not just in our rural community but other rural communities
used to have a lot of small community banks
that were very plugged into their communities
and to the people that live there.
And trying to help them
grow their businesses and their lives.
So just afraid of what the landscape holds going forward.
You're just a number,
you're CUSIP number on a bond security
and here's where you mail your check now.
- It's getting harder and harder for those farmers
to stay in business because they cannot get the funding.
Because with each year of them incurring loss
and then no hope of...
The prices don't get better the next year
regardless of the type of natural disasters
and things that happen.
And so the farmer gets further and further behind
and we've had several farmers that are actually
going out of business.
They're having to sell their equipment
and turn the farm over to someone else to farm.
(gentle ominous music)
- It's actually something that I have no control over.
And none of us around in England, Arkansas
have any control over.
And at the last one, like in 2008
when they were saying that,
"The banks wouldn't have money to loan to your farmers."
And I had several farmers that were just
pulling their hair out.
They were just, "Are you gonna be able to loan me
enough money to finish this crop?"
And I finally told him,
"Just go home and watch Andy Griffith
and quit watching CNN and Fox."
And said, "You know, as far as I know
we're gonna have the money and we're gonna take care of you
and you need to quit watching all of those..."
- Stuff to scare you.
- Yeah. That you have no control over.
So a couple of weeks later, he came back and said,
"You know that was the best advice
I've gotten so far this year."
- The rainfall amounts, we don't get an inch anymore.
It's either three inches or nothing.
Everything is extremes.
(gentle ominous music)
(gentle foreboding music)
- Many of those restrictions on banks are being peeled back.
So we still have trading in derivatives.
It's not, we don't know what it is.
There's hundreds of trillions of dollars
maybe 600, maybe 800 trillions of dollars of derivatives
on currency exchanges that can't be covered.
(gentle ominous music)
- It's like after 1980s it was,
"Oh, Gordon Gekko is a great guy.
He taught us greed is good."
Look what it's gotten us.
- It's a cycle in America.
You have to create wealth.
You can't create wealth
by just taking it from other people through taxes.
People have to be incentivized to create wealth.
And this has been the great- - Okay, but wait a minute-
- This has been the great virtues
of Western democracy for 300 years...
- But it's also been the massively misunderstood.
So go back to the post-civil war United States
and the growth.
The growth was made off land
that people were literally killed and chased off of
and they're like, "Hey man, look at all this free land."
And that's how money was made.
- You have to resolve that we can do better going forward.
American capitalism can be pretty heartless.
If you look back at the American Civil War
and what happened right afterwards,
we industrialized America, we went into the Gilded Age.
People look at these "robber barons" and said,
"This can't last."
(somber music)
And we ended up in the progressive movement.
This is the age of Reagan.
The Reagan era was the relaxation
of the administrative state.
It was the sort of, let big firms get bigger.
It's let's make money.
Let's do it all with money.
Let's let charities take care of people.
Forget about government programs.
And that's run since Reagan was elected.
- Thank you very much.
- I was raised red.
I was raised in a red family.
I grew up in the '80s.
(upbeat '80s music)
Fell in love with Ronald Reagan.
I idolized Reagan.
I saw Reagan and I said, "I want his job."
In fact, my parents told me I mailed him a dollar bill.
I defaced the dollar bill with my picture on it.
- The maxim is, Doveryai, no proveryai
trust but verify.
(audience laughing)
- [Translator] (speaking foreign language)
- (speaking foreign language)
- [Translator] You repeat that at every meeting.
(audience laughing)
- But I wanted to be in politics.
I wanted to be the first woman, president of United States.
I thought it was fascinating.
- We can leave our children
with an unrepayable, massive debt and shattered economy
or we can leave them liberty
in a land where every individual
has the opportunity to be whatever God intended us to be.
- People like to say economics is a science
but it really follows politics.
Keynes came out and looked at it, he saw the political need.
That's how we understood macroeconomics.
Friedman came out and looked at it
and he saw deficit spending
and he saw government control and he saw high taxes,
and he said, there has to be a better way.
He reinvented classical economics.
They called it Neoliberal Economics.
- Quoted Milton Friedman and said that,
that how the economy of the United States
oughta be judged by the number of imports that we have
and not exports.
And I thought maybe this was a typo or something.
And so I asked him, I said, "I mean, are you for real?"
- Trickle-down economics starts in 1980.
It's right around in there.
Late '70s, we get into it.
But the bottom line is, has two parts to it.
First fire the cops.
Not the cops on Main Street, the cops on Wall Street.
Turn them loose.
Let those banks do whatever they wanna do.
- And so here we are now, 40 years into the age of Reagan
and people are looking at what it's done, okay.
It's made a lot of people really wealthy.
We won the Cold War during that period.
Not necessarily because of that, but we won the Cold War.
And America became this supreme power.
But for the people of America, it hasn't been so good.
- I know, their real wages went down.
- Real wages went down and people in this country look back
and they wanna make America
as great as it was in the 1950s.
That's when the marginal tax rate was 91%.
- [Man] I know.
- Ronald Reagan, my mother loved him.
She watched him every Sunday night on GE Theater.
At the end, he would say, "At General Electric,
progress is our most important product."
- [Wesley] What would wrong Reagan say,
if you told him that GE spends more money on stock buybacks
than it does on R&D?
In 1950, stock buybacks were illegal.
They were considered market manipulation.
Now, investment analysts look at that company and say
"A lot of companies are really smart.
I think their stocks gonna continue to grow up
because they've got a really great stock buyback program."
It does nothing for the economy.
- The average American is...
they're living in the GDP of 1980.
- Yeah.
I mean, yeah, clearly the world has changed,
and the commodities you can buy
are not the same commodities,
but in terms of your let's say average
to the extent that we can measure living standards,
living standards have not improved.
Firms finance their investment out of their profits,
that's what people think.
Now, if you look at the 500 biggest U.S corporations,
50% of the profits are paid as dividends,
50% of the profits are useful buying back stocks.
All the profits dissipate, are gone.
So how do they finance their investment?
If they-- - Debt!
- Debt.
- [Newsman] The president expressed surprise
about the collapse on the markets yesterday.
He's still enduring popularity as much to the economic boom
that America has enjoyed under his leadership.
- More people are working than ever before in history
where our productivity is up
so is our manufacturing product up.
There is no runaway inflation as there has been in the past.
So as I say, I don't think anyone should panic
because all the economic indicators are solid.
- [Newsman] But the warning signs have long been there
in the closed factories in many American small towns.
- I mean, there is this notion
of billionaires creating employment,
and that is trickle-down economics.
The problem about that is that in history,
it has never happened.
There is no such thing as trickle-down economics.
It simply doesn't exist.
- [Man] It really is voodoo economics.
(bird cawing)
- When you put the smartest people in the world in finance
which is what we've done
for the last 25 years in this country,
you can't hold back their imagination and their creativity.
- The speed and scale of global economic change
has overwhelmed the national systems
of rules and regulations.
So our first test is to agree tougher
and more transparent supervision of banks, hedge funds
and what is known as the global shadow banking system.
- And so when you get right down to it,
I'm a licensed banker.
And so when the regulators come to my bank,
we're very simple little bank.
They look for the SOP, they look for due diligence
on projects we've done.
It's pretty easy.
You go to a big bank, Wells or JP Morgan or Goldman,
and you're a regular like,
"What is this? I see these emails and... " I mean,
they don't understand it because they're not working in it.
They didn't invent it.
- Sure. - It's like trying to teach people
a theory of quantum gravity
when they've had a high school physics course
and they're inspecting Stephen Hawking or something.
(gentle music)
- [Katharina] The earth is like a bounded natural system
that can't expand forever.
The beauty of the legal code
and derivatives are a product of the legal code
is that we can expand it how far we want, right?
So we always create new types of assets,
we create new types of legal tricks in the end,
and the two systems are not easily compatible.
(gentle music)
- If you're very rich and you gamble with your money
and you lose it in Las Vegas,
that is what you want and it's your problem.
But here, if they lose their money here, it is our problem.
- The market can't punish
for things it doesn't know anything about.
- And they haven't factored any of the risks
that all this could change.
- Natural disaster could have major repercussions
for our financial system,
just because they will have an effect on the asset values.
- [Roosevelt] The new law
allows the 12 federal reserve banks
to issue additional currency on good assets
and thus the banks that reopen will be able to meet
every legitimate call.
It is sound currency
because it is backed by actual good assets.
(water gurgles)
(sizzling)
(helicopter engine revving)
(gentle music)
- And so what happens is that there's an event.
And then when the event happens, then everybody wakes up
and sadly there's what we call in a financial system,
contagion, and people unload, they unload stocks,
they try to get their derivatives repaid.
They want their insurance policies cashed.
And the market starts to unravel.
When the market starts to go down,
the plugs get pulled everywhere.
And so what you're dealing with in climate change,
it's not only the direct impact,
but also the possibility of contagion.
- Economic contagion.
- Financial.
- Yep.
(air blowing)
- Those views are merely forecasts,
and as always will evolve with the arrival
of new information.
(sirens blaring)
- Mike, they're on the bell, hold the bell.
(indistinct) the bells.
- We actually have made it clear
that we will bail out these financial actors.
We will bail them.
This cannot be sustained.
- If it runs only because the central banks go in
and buy assets, right?
Recently it was proposed that the
European Central Bank
should also start buying shares of companies.
So not only debt, but shares.
So we're effectively socializing the obligation
to create financial returns
for the holders of capital assets.
And that can't go on forever.
(cheerful music)
- Even though every politician says,
"This is the most important election in your lifetime."
These forces aren't tamed or unleashed by a single election.
(audience cheering)
- In the news in the last couple of weeks,
we've read about the coronavirus.
And dude, China's acting like
this is (scoffs) like zombie apocalypse.
- I'm actually kind of afraid of that
corona virus, man. - Yeah. No, I don't wanna get
on a plane.
Do we have a government that's competent enough
and organized enough to handle that kind of response?
- No, man. I mean, we can't even handle
like homelessness in the city of LA.
You know what I mean?
Like we can't even figure out how to properly fund anything,
let alone a pandemic.
(gentle music)
- Americans live under the illusion
that they're incredibly different from other people.
When I was in college just everything started
to melt down in the Balkans,
everyone's like, "These people are savages.
"They've been fighting each other for hundreds-of-years."
It's like they just came down out of the trees or something.
Then you're there and you realize
these people live in houses that have electricity
and two-car garages and refrigerators
and not only children in college,
but several generations that have gone through college
and they all spoke the same language.
(gentle music)
And these people (jet engine roaring)
killed each other.
They committed genocide, 250,000 killed, rape camps,
concentration camps, ethnic cleansing.
- This was a plan to ethnically cleanse Kosovo
and get rid of the Albanian population.
Are we going to stand for that?
Is France going to stand for that? I don't think so.
- [Interviewer] Like many countries
as a system starts to break down the,
in their case, it was the communist system,
and in our case, our capitalist system
is starting to break down
and people turn on each other because some leaders think
"Everybody's upset right now and I can motivate my group
"to take stuff from another group."
- [Narrator] Europe has not seen displaced people
in these numbers since the Second World War.
- And those are the kinds of things we have to worry about
with climate change, because it happens when,
resources start to get tight,
and everybody's a human, everybody's prone to these things.
- We've pre-cut boards that we can put over the windows
in the event that there are looters and things like that
to protect the house.
Yeah. You saw what you want right?
- We knew they wanted.
- The UN said just two weeks ago, a billion within 30 years.
- Okay. A billion displaced people, a billion refugees
because they can't grow their food the way they used to
because of the drought or because of floods
or because of collapse of systems.
- [Reporter] How much worse is this gonna get
before it gets better?
- I think the general view
is this is going to continue deteriorating
for the time being,
the next rains are a long while off.
- For the world, this is a very bad thing
because it's billions of people dislocated,
massive economic consequences.
(fireworks cracking)
- Can you have a society that's been
as successful as this one has in a material sense?
And can it transform itself?
You know, in the past empires haven't been able to do that.
What would these Romans say?
Could they help us?
- [Wes Jr.] Unlikely.
- [Wesley] Unlikely.
(gentle music)
The heritage of America is Roman.
All the men who wrote their constitution had studied
the history of Rome,
I mean, the Senate it's Roman.
- And it's failing us just like the Roman Senate failed.
- You know, there was a Greek philosopher who said
that governments go through cycles.
They go from a democracy to oligopoly
to dictatorships and they collapse.
- I know we're talking about Aristotle but..
- Actually it wasn't Aristotle, it was a different guy.
- No, it was Aristotle.
- No, it was maybe it was Polybius,
I forget who it was.
- I'll bet you cash, it's Aristotle.
'cause we're in Vegas, I will bet you cash it's Aristotle,
because Aristotle came up with the definitions
of the three kinds of governments
and their alter egos.
So you have a democracy which when it goes bad,
becomes a mobocracy.
You have a monarchy,
which when it goes bad becomes a tyranny
and you have an aristocracy,
which when it goes bad becomes an oligopoly.
- He's building on the work of a predecessor.
What's the name of the predecessor?
We have to find that out.
- [Wes Jr.] I don't know, you tell me.
- [Wesley] We'll find it.
I don't know, I have to look it up.
- [Narrator] Wealth was obtained largely through trade,
into the warehouses full of goods
from all over the empire and beyond.
It was the wealthy few rather than the many,
who benefited from the riches
and vast resources of the empire.
This imbalance and the irresponsible behavior
of public officials,
would become major reasons for Rome's eventual decline.
- Okay, so dad and I had this bet
and I need you to see if I'm right
or he's right. - Okay.
- It's about Aristotle.
- Oh boy.
- I know, I know.
(laughing)
So I was like well, Aristotle described,
the death of democracy and what happens
to different forms of government as they decay.
(gentle music)
(speaking in a foreign language)
- Well you see Alessia, I know from also from your studies,
that the collapse of the Roman Empire
was mainly a huge, gigantic,
enormous, humongous, financial collapse.
At some point, the emperors had just run out of money.
- There are lots of different theories
why the Roman Empire did collapse.
I think what we know now,
is that there has been a long economic decline
before the Roman Empire collapsed,
before the German hoards came down
and conquered Italy,
and conquered Rome, ultimately, right?
So the question is what triggered the long economic decline?
- Disparity between the rich and the poor.
- Onistorus and Miliorus they...
- Yes, you're speaking Latin now.
- Yeah, yeah Latin.
- Massive amounts of inequality
may not be politically sustainable.
Governments fund themselves through either debt,
or through taxation.
In Rome you would basically go
and try to squeeze more returns out of
provinces that you occupied,
or you might launch another war to get the returns,
to feed Rome and feed those who were
running the system overall.
And I think that's the common denominator
because we live in a quite different system today, right?
So today it's our central banks
who are doing the rescue operation.
- One thing about the financial markets,
one of their real power is,
if they can pull forward action from the future
to the present, if there's credible policy,
after all, most of what central banks do
is effectively that.
- So big trees fall hard.
The market can adapt to anything,
as long as there's clarity,
transparency and honesty
and I don't think we're getting that.
- There were a lot of things that caused the problem,
but, I mean, essentially,
the structure of Rome
held together for a good long time,
until finally it just ran out
of economic wherewithal and leadership.
- Politicians were bought,
what the founders of our republic warned us
about over and over that if you get really wealthy
and you lose your moral character, it's over.
- Well, that's where we are.
- Because we are very close to a moment
in which we could start slowly going down
and if we are not very careful,
we will go down faster and faster and faster and faster.
(exclaiming)
Roller coaster.
It will be a lot of fun, maybe.
You know the ancient malediction,
may you live in interesting times.
(loud bang)
- So, that's how it ended last time.
Except this time, it won't just be barbarians,
it'll be the planet itself that's on fire.
(fire roaring)
- [Man] There's still active fire in that area.
Monitor the conditions and know what you'll do
if the fire threatens (indistinct)
- [Woman] In the smoky aftermath of the worst start
to fire season anyone can remember,
while some search for solutions,
others want someone to blame.
(gentle somber music)
- Probably should take a break and let it settle in,
take an intermission.
- Financial ingenuity has been part of this system
since the Dutch invented the...
- Okay,
- But a lot of it - liability company
- isn't financial - and Lloyds of London.
But dad, listen.
- People get pretty...
- Everybody thought Bernie Madoff was a genius.
- Yeah.
Foreign investors looked at the United States
and said, "the United States they're the best.
"That's the safest place in the world I can put my money".
- [Woman] I mean, we've had, I don't know,
five, six biblical-like events.
We're continuing to have them,
so I need to question the validity
of the value of, and viability
of my land long-term.
(upbeat music)
- A little over seven years ago,
Hurricane Sandy blew through here,
causing tens of billions of dollars in property damage,
and since then, New York has built more,
bigger, taller and more expensive, because we, the people,
are on the hook for the cost of the insurance
if another hurricane comes and hits New York City.
(rain pouring)
(metal banging)
The National Flood Insurance Program
is a federally-run public program of insurance.
It's run by the Federal Emergency Management Agency.
It provides flood insurance for virtually all homeowners
and small businesses in the country.
So this is pretty unusual, actually.
Most other countries have private markets
for flood insurance, but the U.S does not.
(sirens blaring)
- It's a supplementary policy that is subsidized
by the government, and so all citizens are, to some extent,
footing the bill for coastal property owners.
- In order to build a huge condominium development
in a flood plain in New York City, you, of course,
need a lot of capital.
Municipal actors in New York City are very interested
in continuing to promote a version of New York City,
in which as much of the available land remains viable
for continued economic development,
because property taxes are so important there, as elsewhere.
- Well, the original program
of the National Flood Insurance Program
was supposed to stop construction in very high risk areas.
Areas where water moves with velocity,
particularly flood ways along the river,
where water moves the same rate as the river,
hurricane-zoned areas, where the storm surge comes in.
The building is,
it's almost impossible to build a really safe building
against a 14-foot wall of water coming in at you
in a storm surge.
There's a lot of vested interests that don't care,
construction industry, for example.
They'd like to build a house on a beach
while the tide is out, as long as they can sell it
before the tide comes back in.
(water flapping)
And once they've sold it, of course,
the risk is now somebody else's.
- The ways in which financial actors securitized mortgages
in the run-up to the last financial crisis
is still going on.
- So the building contractors all want
to minimize the flood program.
The town wants to minimize it,
wanna hold down the elevations on the maps
and fight that every map that comes out
by the National Flood Insurance Program,
that causes problems, delay in implementation,
maybe never implementation.
- The coastal communities
are on some of the most valuable land in the country,
And as a consequence, people are gonna fight
to protect their investment position.
- I thought, okay, the city's not requiring me
to have flood insurance.
My realtor didn't tell me I had to have flood insurance.
- Honestly, you don't look at the flood maps
when you move into a neighborhood.
You fall in love with the house, and 85% of the people
in my neighborhood were not insured.
- [Narrator] Shelter.
- The United States is uniquely vulnerable
to building into disaster-likely,
physically vulnerable areas, because of our reliance
on local rule, particularly for zoning decisions.
That's part of our bedrock of the United States,
state rights and local rights,
and it's actually has a lot of advantages,
but it has a major disadvantage,
which is that local governments depend on revenues
that are coming from their buildings, from their residents
who are building and living in their localities,
and that means that all residents benefit from development.
- The politics of provision are so tied up with land values
in the United States, that if property values go down,
then the tax assessments adjust to reflect that,
and you're bringing in less revenue for the tax base,
which means less investment in local amenities
and schools and local public transportation.
- In Texas, we don't have state income tax.
That's another reason why you wanna live here,
because it's cheap, but people are taxed on their land.
- The maps that are in existence for where a 100
or 500-year flood will happen are so outdated
and no longer accurate, the risk and the cost of that risk,
even within the insurance industry, is not as accurate
as it needs to be, in order for us to appreciate
what the cost of climate is.
- Insurance actors have found ways
to take an insurance policy and securitize that,
and transfer it to kind of capital risk markets,
so they're not really holding the bag,
which means that they're willing to underwrite more
and more property,
which means that people can kinda continue to build
in risky areas.
- I don't think anyone would wanna come in
and look at the house and come through salt water
and wanna buy it.
(water splashing)
- This is my nest egg. - Yeah, this is your nest egg.
- This is how I'm gonna help my kids and my retirement.
- But now, because you bought it in an area
where there's rising sea level,
maybe that nest egg's not so secure.
In order to convert his nest egg to cash,
he's gotta be able to sell the house,
but now nobody will insure the next 30 year mortgage.
What happens to John?
- [Wesley] John's lost his retirement nest egg.
- Okay, so John is now literally John on the street.
- [Wesley] The nice house that we're gonna buy
in Florida to retire...
- This was their house in Florida.
They were gonna move to Alabama.
- [Wesley] Okay, well, they're not moving.
They may still move to Alabama.
They may be living in a trailer park.
- Flood involves the U.S government
in this really peculiar way,
fire is privately underwritten,
so it's private insurers
and what's happening with fire risk,
is that some of the primary insurers
are going out of business,
in events like the California wildfires,
that can put an insurer out of business,
if they have outstanding liabilities
that exceed what they can pay off.
- [Wes Jr.] Then we started talking
and you told me about buying a house
in Sausalito.
So what happened?
- So we call the insurance company two days before,
two or three days before
and let them know we're gonna close in a few days.
And they call us back and say,
" Hey, we can't insure that house"
And I'm like, "what?"
And they're like " yeah, it's on a list of neighborhoods
"that we don't insure anymore"
So these entire neighborhoods are gonna be uninsured
and they also told us,
they don't know if they're gonna reinsure
the current owner of the house either.
That's an entire,
billions of dollars of houses across the state,
that it's gonna have an insurance problem.
(jet engine roaring)
- The insurance companies are insuring for one year.
So as things get worse, the insurance companies
are definitely not going to be able
to come to the rescue of these homeowners.
- These latent, hidden climate risks
that might exist in different places,
in different housing markets,
should they burst, could take down
the entire financial system.
- And right now this house is listed for $49,000.
At the peak of the market, it went to about $250,000.
- It's not only the owners that lose their assets,
it's the financial intermediaries that lose
their claims against them.
It's those that bought the secularized mortgages
and other assets that are linked to them,
just as we've seen in the 2008 crisis.
- And unless we're prepared to continue to write
the same check over and over again,
we need to start to scrutinize,
are we hardening the utilities and the infrastructure
around these homes sufficiently,
so they can weather these storms going forward?
Or should we in fact not permit
the investment of capital, that is going to be subject to,
climate change conditions in a negative way
and we need to think about that.
- No, that's the really scary thing
because we're not, you know we're not hardening
any of our infrastructure.
(laughing)
I mean, not yet.
It's very expensive.
There's guys thinking about it,
but nobody's done it yet.
(train approaching)
- Well, from an oil company standpoint,
most of the major assets in the United States
and actually globally, are on the coastline.
From that standpoint, the facilities are as vulnerable
as people's homes.
So there's a lot of offshore infrastructure
in the Gulf of Mexico,
but that comes on shore to a lot of pipelines
that are right at the coastline.
And so as the coastline erodes,
those pipelines become noticeable and vulnerable
and have to be buried deeper,
or infrastructure put around it to protect it.
So indeed, yeah, hardening of infrastructure,
utilities and fires have been associated with that,
or the pipelines.
People are worried about how to protect those going forward.
- Nature's gonna be eroding the foundations
of our economy.
(waves roaring)
- So, sometimes I'm out in a place like this,
and I imagine what it would be like to come here
with no money in my pocket,
fleeing an economic meltdown,
'cause you know look, we do have plenty of land,
but if I had to survive out here
and didn't have the money
to buy something to provide me power,
some way to get water,
out of a fairly dry land,
while we love pristine nature
and we like to hike in it,
hunt in it, camp in it,
all those things we do
thanks to the technology that you bought at the store.
The tent, the gun, the flashlight,
the lighter, these things are made in human communities,
in factories, not by people on the run,
not by people out of capital.
(gentle music)
It's all about capital.
So here's what happens,
capital is gonna flow to where it can make the most money
for the capital owner.
A town like this,
which was a silver mining town,
is a good example of foraging theory,
where if you're an animal or,
and these things translate into the human world as well,
and you've got a choice between two things,
one that's easy to get
and one that's hard to get.
If the easy thing to get is worth more,
that's what you're gonna go for.
So that's what produces boom towns,
because at one point the silver was really easy to get to
and worth something
and then when the silver market crashed,
well, it wasn't worth anything.
So they moved on, to find the next easiest thing to mine.
These patterns of capital do not change over time.
Capital is always gonna seek the greatest return
and as soon as that return isn't paying off,
it's gonna pull up stakes and go somewhere else.
- The way to define capital is the money
that is going to be used to create something.
- People are very myopic.
They are just looking at what's in front of their face
and the portfolio that's right there,
how they're gonna make money in the short term.
- How you doing Frank?
(laughing)
So look, we look around and it's like,
this is all the capital,
this is all the capital in the world,
headquartered right here.
- Right.
- And I'm assuming they all wanna live past 2050
and so we gotta change over.
Are they beating down a trail to your door to invest?
- No, they're not.
We have to search for the right type of investors
for our projects.
And when we do find the investors for our projects,
it's extremely difficult to create the value
or pull out the value for our projects that the investors
recognize immediately.
- If somebody can get 15% on their money doing derivatives,
why would they wanna get 5% on their money
doing renewable?
- Because they would be able
to use the investment tax credit.
Everybody wants a return
and everybody wants to maximize their return.
And the only groups that I know can maximize their return
for renewable energy projects today,
are the wealthy individuals that have passive income.
- And, what do we think of as like wealthy individuals?
So I think a lot of Americans think if someone has $500,000,
they are a wealthy individual.
- I'm talking about people who have
hundreds and hundreds of millions of dollars of net worth.
- So minimum, a hundred million dollars of net worth.
- I would say so, but there's not many people
maybe less than 1% of the population
that has that type of investment portfolio,
or investments generating passive income.
- Any more comments?
- That's pretty close all right, pretty close.
- Perfect.
- All right.
- So when there's not investment
in the market towards the technology
that would help for climate solutions,
and renewables and clean energy,
then that trickles down into the entire,
the entire life stream or life cycle,
you know, the whole flow of business.
- Lord Keynes, who was the founder of macro economics
asked the question, why do people invest?
And honestly, there's no answer.
He called it animal spirits.
I can tell you people are risk averse.
And after 2008, they're even more risk averse.
When I go to these business conferences
and I see my friends,
I asked the guy who's worth a hundred million dollars,
I said, what are you working on now?
He says, you know, he said, I'm just,
I'm pretty happy where I am
and you know, I've got the house in Mexico
and we're looking after the grandkids,
and I mean, he's not investing in taking risks.
He's not creating jobs for the rest of us,
at least not directly.
That's the animal spirits that are out there
in too much of the business community right now.
So the only way you can replace that
is with government leadership.
The Erie Canal, the Transcontinental Railroad,
the Panama Canal, the space program,
the interstate highway system,
in no case did a group of entrepreneurs get together
and say, hey let's build the interstate highway system.
No, it was a dream that Ike pushed in 1955
that came from a study done
during World War II that showed that
you needed these highways for national security purposes.
- This is no partisan policy.
No one has a monopoly on truth,
and on the facts that affect this country,
we must work together.
- The United States is highly dis-aggregated.
We have 50 states, one nation,
many counties, many regions,
tens of thousands of cities
they all have a voice in how things are done.
And it's hard to get us to collaborate on certain projects,
unless we all align and agree it's necessary
and we feel some urgency to get it done.
- If the Australian military study,
the U.S military study,
and the British military study are all correct
we've got about 30 years
if we don't do anything until civilization collapses.
Which I'm guessing doesn't have a good rate of return.
- Correct?
So Wes there are actually those
who would tell you that we may be
beyond the tipping point already,
I don't subscribe to that, by the way.
If you do subscribe to that then
it almost makes the investment in,
you know wind and solar, not pertinent.
- [Wesley] What's the most valuable thing in the world?
The most valuable thing,
it's oil reserves in the ground.
It's worth more than the GDP of the United States,
more than the stock market,
more than the stock markets of all the Western countries,
it's oil in the ground,
and the people that have that oil, they want it to be used.
Whatever you hear about Saudi Arabia
saying they're going to, you know
move beyond a petrol based economy, yell, yell,
but they're going to move at their pace
and they need those petro dollars to get there.
The societal costs right now are much greater
than the economic costs of taking it out of the ground.
So you have to recognize the societal impact
and you have to make the people
who are producing it and selling it,
and the people who are buying it
pay the full cost of using it.
And that, that means a tax.
- But we didn't even do that with security though,
because I mean, realistically
we've subsidized the oil industry for 50 years
by knocking over governments,
by protecting shipping lanes for it, oil lanes,
so we couldn't even do it when it came to like
having them pay for their own extraction and security.
- It's true.
But one of the reasons we couldn't do it is because,
we didn't really have the alternative.
- What's the sound?
- We didn't really have the alternative technically.
(jet engine whirring)
(fire blazing)
- [Narrator 1] Engineers worked under fire
to douse oil pipelines set ablaze
by retreating Iraqi troops.
Animal fats, and tallow could no longer supply
the ever growing need for candles and lubricants.
Whale oil, which had long been the chief illuminant,
was becoming scarce.
Yet the demand for artificial light was increasing.
In 1850, a lamp capable of efficiently burning
a refined product of petroleum was invented.
- Oil!
- Early oil production, they used steam power
for the drilling, for the riggings
of different pieces of equipment,
and that steam power probably was produced
by burning wood or coal.
So you'd use wood or coal to get oil.
Today, we use electricity to get oil.
We use gas to get oil.
So we use one form of energy to get another.
And that's one of the interconnected aspects
of energy that's kinda surprising for people
is how interdependent is.
We don't have an economy that runs on one form of energy,
we have an economy that runs on many forms.
(water splashing)
(soft music)
- Part of this equation,
certainly in the short term
to this time period you're worried about,
is modulating consumption and adjusting cultural behavior.
But people aren't talking about that,
no one wants to blame anybody.
If you wanna blame industry,
well, industry exists because people buy their things
or use their things.
So they're the ultimate consumers.
Are we gonna carbon tax them? Are we gonna punish them?
Or maybe part of the equation is,
we all accept responsibility
and we get a cultural change to take place here
to go back to where we were 20, 30 or 40 years ago.
- We might, but that's hard.
- The vast majority of our individual impact comes from,
housing, transport and food.
These are kinda big structural issues
that can't really be addressed adequately
by changing the brand of paper towels you buy.
- We live in an energy consumption society.
And the way to look at things,
we have to be aware that nothing comes for free.
We have to be aware that everything costs energy,
whatever you do.
(soft music)
- This is not what public space looks like in the U.S,
but I noticed here in the Netherlands,
everybody's riding bikes everywhere.
- Yeah. Yeah.
- And that doesn't strangely require gasoline.
- Nope.
(upbeat music)
- The question is, can we replace
fossil fuels with renewable energy?
And this is a very tricky question.
It raises enormous debates
and people get angry when you asked them this question,
because it is not clear what you mean.
If you mean that you can satisfy people's greed
with renewable energy,
then the answer is no.
If you mean renewable energy could produce
a sufficient amount of energy in order to survive,
then the answer is yes.
- We are in an energy efficient home now, that we've rebuilt
that our household use alone is twice the size
of the average American,
that woke me up,
I can't count the number of trips
that I've taken around the world for business,
but that two international trips,
was equal to one year of utility energy in my home.
And that really had me thinking about travel.
It had me thinking about what I eat.
- [Michael] Another surprise for many people
is how much energy we use in the food system.
- [Narrator] And complete dinners.
- [Michael] In the United States,
we use 100 quadrillion BTU of energy a year.
A BTU is our British thermal unit.
One BTU is about the energy content of a kitchen match.
So in the United States, we use
100 billion million kitchen matches of energy per year.
10 quads, 10 quadrillion BTU is for the food system.
One of those quads is in the food itself.
Food is a form of energy.
We're ingesting at one quad of food energy into our bodies
for 330 million Americans every year.
The other nine quads is for the rest of the food system.
This is in the agrochemicals, the fertilizers and pesticides
diesel for tractors, the energy for refrigeration,
the energy for drying crops at silos,
warehouses, transportation,
plus the energy to cook at our homes.
- [Narrator] Pies are done.
- [Michael] Three or four quads of that
is just for the cold chain.
That's the refrigeration system:
refrigerated trucks, refrigerated warehouses,
and refrigerators and freezers at our homes and businesses.
The energy embedded in the cold chain
of the food system in the United States
is more energy than entire countries
like Switzerland and Sweden consume in a year combined.
The energy embedded in the edible food we throw away
is also enough to power entire countries elsewhere.
Sadly, we throw away like
a fourth to a half of our edible food.
(upbeat music)
- [Wesley] Okay so Michael, here we are.
We're surrounded by water.
- [Michael] Yeah.
- [Wesley] And what's the relationship
between water and energy?
- [Michael] The water energy relationship is twofold.
One is we use a lot of water for energy.
We use water to cool power plants,
we use water to irrigate biofuels,
we use water for oil and gas production,
we use water to make steam at refineries.
In fact, if you look all up and down the energy supply chain
water's at every step.
- Our well went dry.
- Dead.
- Yeah, that's dead.
- This is where the water, that would be the full mark.
It's not a fantasy apocalypse movie landscape.
It's now and it's real.
- So the grid might be strained
if you don't have water available for cooling,
at least the way we have most power plants today,
where they use heat,
they then need a water for cooling.
Modern forms of like solar panels or wind turbines
don't need water coolings.
- The average life for PV panels is what, 20 years?
- 20, 25 years.
- Maybe 30 years, yeah. - So the people who say,
well, it takes seven years of energy
to produce this PV panel, but then you're getting,
that means you're getting 18 years of energy free.
So you've cut down.
- Even then you're getting 18 years of energy for free.
- So me John Q Public,
I'm like, hey man,
I wanna put some money into your solar farm.
- No, not until the government gets involved with things,
puts us into a pari passu position with fossil fuels.
- I've got a lot of friends
who are in the renewable business,
and there's a really big problem in terms of,
you know, you've got the power purchase agreement,
you've got all the permitting done,
You've even got interconnect agreements,
except what's happening is,
grid companies are delaying
and not letting them on the grid.
What's going on with that?
- I think one of the challenges we have is,
who has access to the infrastructure
and democratizing the infrastructure
is a way to open it up so that
more solutions can be brought forward.
This is something that we did
with telecommunications in the 80s with AT&T,
AT&T had built out all the wires and poles,
and they were required to open up
their infrastructure for other companies.
And that's why we have so many phone companies,
and long distance companies now that we didn't have before.
The same thing could happen
with democratizing the electrical infrastructure.
More solutions would be plugged in more wind and solar,
and we have more technologies along the way.
And this is where long range planning,
stable governance really matter.
- Kind of what I'm hearing is,
it's not a technology problem.
- No, not a technology problem.
- It's not an engineering problem.
- No. - It's a financial engineering problem.
- [Luka] Energy poverty, lack of food, income inequality.
So it's up to us now to form the policy
that is going to help bridge this gap.
- In 1941, when the United States went to war,
and people saved tin cans and aluminum
and gave up, women gave up buying nylon stockings,
and everything was done for the war effort.
But the war was there, was right in front of us.
And young men were being drafted and sent overseas,
and casualties were coming home.
And this is different.
It requires the same type of reorganization or commitment.
- But why didn't they call on me?
I could have done something.
(jazz music)
- That was then, and this is now.
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- Michael, you are now in charge of the United States
Energy policy and you have free reign.
How would we make the transition?
- For national security reasons and for economic reasons
and for environmental reasons
there are many reasons to do this.
We need to harden, improve and expand our grid.
Maybe even using the interstate highways.
We already have the rights of way and put lines
above ground or below ground, create a national network.
And then it will span and reach to the sunny windy areas,
and already connects to the urban areas.
And once we have the network,
we can plug in whatever we want,
build the infrastructure first, then the energy will follow.
But we have to put a price on pollution.
We'll take the money from the price on pollution
to clean up the trash.
So let's take the United States
6 billion tons of CO2 a year,
put in the atmosphere.
And let's say we're willing to pay
I don't know, $30 a ton to remove it.
That works out to if I do my math correctly,
$180 billion a year.
Sounds like a lot of money.
That's less than what we spend
on just dealing with trash from cities.
Why not spend another couple hundred billion cleaning
up the waste in the atmosphere.
Let's take the CO2 and put it into the soil.
Like, let's pay farmers to take the Co2
out of the atmosphere into the soil.
(soft gentle music)
We need to get more of that national security mindset.
- If you have a built to last strategy,
then you do want to look at
what's happening in these longer horizons
and it's absolutely critical.
- It's gonna take all forms of energy
and all people to move us through this transition.
- Otherwise, I don't think we actually stand a chance.
(jazz music)
- I'm trying to get rid of this car,
but it's like quitting smoking, it's not easy.
You are so used to certain things
that it is very difficult.
- The Romans had done a lot of bad things
to the ecosystem.
- Yeah.
- But, they had not destroyed it as we could do.
- FEMA estimates for every dollar spent on hazard mitigation
you save $4 in disaster recovery costs.
So we're already spending the money.
There's the sense that it's perhaps too expensive
to prepare for climate change,
but we are already spending the money.
We're spending it after every disaster hits.
(airplane humming)
(jazz music)
- When I was growing up, there was the draft.
So everybody thought they had an obligation to the country.
If you went to a land-grant college you were drafted.
Now it's different.
The trust in government's gone,
the obligation to government is gone.
If we could take some of that spirit of patriotism
and service and rebuild it into doing something
for the environment.
- This entire thing is built out of carbon
that comes out of the atmosphere.
- We need a hundred thousand young people
to give up part of their summer
and form up and really work this.
We could control these pine beetles
that are destroying the forest.
We could plant new trees, but it should be done not only
for pay as a guaranteed job, but it should also be done
for every citizen's obligation to take care of the land.
That's what I'd like to see.
- It sounds like you're trying to inspire a whole generation
of people to pay for it.
- Well, it sounds like something that old guys would say.
(laughs)
- Whoa.
- Baby baby.
Can you smile for us?
That's a good noise.
It's made me want to be more of a fighter for her sake.
The transformation is potentially exciting,
because we can think not only
about losing things that we have always wanted
but also letting go of things
that we perhaps don't benefit from.
We can lose in order to transform into something else.
It's not as kind of confident that things will be okay,
but it finds possibility in a ways that
things will have to change
in kind of really dramatic ways.
(speaking in foreign language)
- And so we are looking at diversifying the types
of crops that we are wanting to plant,
and also work with conservation type programs
to help preserve species and habitat.
And let nature take it's course
and bring back species that we need
and that the crops actually need to be productive.
(jazz music)
- [Warren] We don't want a hurricane or a tropical storm,
they're already geared up the crops are turned in.
They wanna go ahead and get finished.
People wanna know where their food came from.
Well, at some point maybe people will wanna know
where their banker lives and who he is.
And do I have a relationship with him
that when I need some money to fix something
I can maybe find somebody to help me?
- Yeah, I mean, it's not a matter of
the government telling banks what to do,
or telling us what we can do.
No, I mean, there's still lots of possibilities.
We should have smaller banks basically split them up,
and not make them too big to fail.
If they make mistakes, they should fail without causing
a total systems crisis.
And probably what also needs to be done is introduce rules
which make it impossible for the financial sector
to create within the financial sector itself
so much additional debt.
- We have to somehow correct this market imperfection.
- If you want to have a derivative,
if you want to hedge your risk fine,
but you must have exposure to the underlying asset.
- [Robert] I remember I was watching on TV
after a major flood down in Florida,
and they were interviewing this guy and he said,
"My father rebuilt twice, my grandfather rebuilt twice."
And he says, "And I'm gonna rebuild again".
And the reporter turned into the camera and said,
"That's the American way".
Well, I thought the reporter should say, that's stupid.
You can't keep doing it over and over again
that's the definition of insanity.
- So it's basically trust in the monetary management
and trust in the future productivity of a country
that gives us trust in the currency.
Not the idea that there are some gold barons hidden
in the federal reserve.
(jazz music)
- And so there is a point of resistance
at which governments aren't going to be,
have access to capital to address the problem.
- We're rich.
(thunderstorm rumbling)
- You know, the fear is,
if we cannot bail out the system anymore
it will come crushing down with huge side effects.
The hope and that sounds a little cynical
but I think the hope is we probably can reorder
our system only after a crash.
And I think that human history is such that
we are unable to make really fundamental change
in the way we live and the way we organize ourselves
without such a crash.
Nobody wants it, and I'm the last person who wants it.
And if I think back to the 1930s, and I'm German, right?
And you think about what the repercussions
of a major crisis can be.
We just don't know how we would get out on
the other end of the tunnel.
I think without this crisis, I just don't see
enough political leverage to fundamentally alter
the way we organize our financial system.
- When climate change happens,
there will be real problems and it will be real,
as you said, there will be real scarcities,
and it will be real migrants coming, and there will be an...
- And that's what I,
and then will really be broke because it'll be
after you've had that collapse of the inverted pyramid.
And then it's like, then it's
like asking Somalia to fight climate change.
- Yeah, yeah.
- [Wesley] So your criticism would be
that we're not facing reality
and not adapting to it?
- That's correct.
- My answer to that is, I still have faith in democracy.
I believe we can do it as a people.
I believe we can do it as a society.
And I believe we can take the institutions
of the United States that have served this country very well
for over 200 years, and move into the 21st century
and still help lead mankind forward.
It's an article of faith, but it's the faith
that motivates action.
We have almost all the tools
and all the financial resources,
and all the institutions that could solve this problem.
It's the kind of challenge that could bring mankind together
in a way we've never been brought together before.
- I wish there was more conversation,
more guys on the opposite side talking together.
Because everybody as we feel,
there are people feeling opposite from us
that are just as righteous and all of that stuff.
But we ought to get together to see...
- The thing if you get together with people like this,
what you find is the disagreements
are pretty narrow actually. - Yes, that's what I mean.
- The people are mostly agreed on like 95%.
- Yeah.
- But, but there are forces in the culture
that want to sharpen and popularize those disagreement.
- Yeah.
- It's a human nature issue.
- Okay?
- So what sells?
Tell me, what sells?
What do you pay attention to
when it's happening around you?
- You gotta find people--
- Conflict, conflict, conflict.
- It's true. It's true. - That's it.
- To create that kind of a dialogue
between a father and a son,
that love thing, I mean, this is my kid.
You guys must have some wild conversation man.
- It's what gets me.
I totally... - This is the basis
- disagree with that. - of democracy and capitalism.
- No, I disagree with that.
(wind blowing)
(gentle jazz music)