Environment. Still am. Rose we conclude with Guillermo Del Toro, the mexican filmmaker and author. I think that the way to understand the universe is by sort of codifying hit in the dichotomy of angels and demons. You can call them monsters, superheroes, whatever it is but we have to mythologize the universe in order to apprehend it. Because if you dont its like digesting concepts that are so large, so super or supra human that you need mythology to understand it. Rose Stanley Druckenmiller and Guillermo Del Toro when we continue. Captioning sponsored by Rose Communications from our studios in new york city, this is charlie rose. Almost one in every four children in the United States of america lives in a state of poverty. Thats an outrage. One way to think about it of the top 35 industrial countries in the world, we have the second highest poverty rate. Rose stan drugen miller is here. For 30 years he maintained one of the best investment track records on wall street. He orchestrated a campaign at colleges across the country to educate and mobilize action on entitlement reform and other government spending. He says without a Major Overhaul soon todays young people will be robbed of the future benefits and standard of living they deserve. I am pleased to have Stan Druckenmiller at this table. Welcome. Good to see you. Rose can i just start with understanding you, you know, this remarkable record with duquesne and with quantum fund and george soros and the relationship youve had. You where are you in your life . Rose you mean what am i doing . Yeah. Im still moneying very actively. Rose for family or for for family and the family foundation. I go to work at about 6 00 and i come home at 6 00. Im still in love with markets. The only thing thats changed is im not competing anymore so im not managing other peoples money but i love markets and i love the intellectual challenge as much as i ever have. Rose is that what you love about markets . The intellectual challenge . Yes, also, im i like rose or you like being rich . Not so much being riched but i like to win. Its a competitive disease that i it gives me a thrill to win. Rose but does it give you a thrill also to win and to be better than someone else, which is winning. Well, i dont know whether youre better than someone else but it gives me a thrill to have better results than someone else yes. Rose and where did you get that . That where does the competitive spirit come from . Do you know . You cant remember when you didnt have it. I dont know. I remember being a brat when i was little. We used to play board games at our house and i really did not like to lose when i played board games. Just something i was born with. Its somewhat of a curse but it also has its advantages in terms of pushing you to perform. Rose and therefore and with success widening your opportunities to do a range of things. Rose yes. Yes. Rose but beyond that, what is it about markets thats magical for people who love the idea of what they not only represent but the challenge they offer . Yes. So id say theres two things. Number one i love trying to put a puzzle together, visualize the future, and particularly if you have a different view than other people and if you do that right, Security Prices in the future will reflect that. And theres a great satisfaction to having solved that puzzle and the nice thing is you get your grades in the paper everyday. Theres no subjectivety in the Money Management business. Its right there and if youre screwing up those numbers rose its in the paper everyday. And i love the objectivity of that. I always have. Rose george soros and the relationship the two of you had. You were there, turn guy when the great decision based on the devaluation of the pound happened. You bet right. Yes. Rose and you bet a lot. Yes. Rose and you made a billion dollars plus. In one day. Something like that, yes. Rose Something Like that. You know precisely. Okay. True. Rose so who has who has ill use the polite term. Who has the whos the bigger nerd . You or george . Oh, id say george rose who has more ice water . George has more ice water than i do. Id say if you look at our records, theyre very comparable. When he ran quantum and i ran quantum theyre almost within decimal points and id say george made more spectacular events and my record was a little more the vets were more consistent but the results were the same. Rose do you agree with him in that if you see an opportunity just go all in . Oh, yeah, if theres one thing i learned from george and what made me a better money manager because of george its exactly that. Its not whether youre right or wrong, its how much money you make when youre right and how much you lose when youre wrong. So rose and how confident you are that youre right. Yes. But up until that point i had a very good record but it was only i was the george i learned how much you should press it when your confidence level is extremely high. I did find that out before i was there, dont get me wrong, but it was amazing to watch that man when we had something we really believed in to see the way he would he would size risk and reward. Rose and you cherish the fact that the relationship is one in which i asked you when you sat down, you know, were friends, we have different lives but he once said, you know, not only a great money manager but youre also a partner. No, im i have very fond feelings for george. The best 12 years of my life. My three children were born. I learned a lot. It was an exciting time. Were still in touch. Were on different political sides rose thats where i was going. Theres been a buildup to that. It doesnt matter in terms of our friendship at all. Rose youre on totally different political sides, arent you . Yes, but the respect is there. Maybe washington could learn something because we couldnt bt different politically but i think the Mutual Respect is there so rose so define how youre different politically. I think george in traditional terms he would be considered more on the left. Rose right. And i would be considered more on the right, particularly on the nonsocial issues, on the economic issues. Hes much more proregulation. He thinks markets go wild. I love free markets. Im antiregulations. Rose and are you beyond being on the right more libertarian . I think thats probably fair, yes. Im certainly not on the right on social issues and im certainly anticrony capitalism. So i have some strange views in terms of being on the right that normal corporations may not particularly like. Rose theres a lot of you sitting on the corporation that you like. Im sure everybody does. Rose thats where i want to go. What was surprising to me, i think to understand what youre arguing for is not necessarily predictable from where you come from politically. Oh, no, thats absolutely true. In fact, i think one of the problems of getting this message threw which is so obvious to me, its as often as the pound was and then some in terms of predictability, it has a longer time frame, is that it has been associated with austerity and the right wing and i dont look at it that way at all. Rose nor did i when i heard it. I think in many ways the left wing should be more excited or as excited as the right wing. And thats what we found out on the road with the students. The kids at berkeley loved it, the kids at brown loved it. Its the same conclusion but it a different messaging. Rose i wanted to set this up so we have you explain what it is that youre on the road talking about and what is the central idea and why youre so passionate about it. But i wanted to understand where you come from politically from the right, maybe more libertarian and at the same time the enormous respect you have im an independent who would be considered center on social issues and probably somewhere to the right rose what about with the present administration . Well, i voted for him the first time. Rose what was your problem with health care. My problem with health care were talking about obamacare . Rose yes. I believe chd it was a once in a Generation Opportunity to separate this thing from the corporation and make the consumer of health care actually have choice and have skin in the game. I think one of the big problems with the Health Care System is we go to the doctor, we have no incentive to shop, we have no incentive to see what the costs are and as long as your corporation is paying the bills and you dont see that bill, thats the way its going remain. I guess my biggest rose so theres no intelligence at the decision point. Right. Theres none whatsoever. Rose or selfinterest. Right. We we have taken away the market, which you could use, very much so, to solve this problem. Weve completely taken out of the equation. I guess my problem with obamacare, the more i understand now, is its all so dishonest. And by that i mean so were taking Young Healthy people and making them buy plans with stuff in them they dont need to subsidize people with preconditions and older people. Rose and unless you do that, the system will not work. And im okay if you want to tax Stan Druckenmiller and you want to tell him were taxing you to support people with preexisting conditions and sick people. Im not okay with messing up all this marketing and making me have maternity and all kinds of stuff inform there as some kind of hidden scheme to make that subsidy. If we as a society want to choose to implement universal health care the way they want, lets at least be honest about it and lets put a tax on all of us and say we choose to do this. Rose and youd be willing to pay that kind of tax . Would i be willing to pay for it . Id feel better paying for it as a tax than mucking up the whole incentives within the Health Care System. Would i be willing to pay for it . Yes, i think i would. Rose so when you go around the College Campuses and off central theory which i referred to in the introduction which is that you believe that its terribly unfair what we are doing doing to young people today. That were burdening them with circumstances that we didnt have so that they can take care of us. Yes. Rose thats very simplified. So you explain. So the way our entitlement system works is its not pay as you go. It was set up a long time ago so current workers pay for current seniors. And because of the senior lobby versus young people because young people dont vote and they dont give money to parties, they have other things on their mind. Rose and theyre not organized. The seniors in our society have been taking an increasing share for the better part of 40 years from money allotted to youth investment. And this is somewhat alarming has been somewhat alarming but now is extremely alarming because the baby boom which took place from 1947 to 1967 and that was 6 a years ago means the number of seniors is about to explode. So the share of the pie that has gone to the elderly is now about to be distributed to a lot more people. Specifically we are creating 8,000 new seniors on the entitlement payrolls everyday now. Thats because of the demographics, and were only producing 2,000 young adult workers to support them. That number goes to 11,000 by 2029. So you have a combination of too much pie going to one sector and now that sector growing dramatically relative to the sector thats going to support them which should set up a big fiscal problem some time in the next 20 to 40 years. I guess whats different about rose probably not in the next 10 or 15. I dont think in the next 10 or 15. But let me tell you why i dont care if its in the next 10 or 15. Because everyday we wait is money that the next generation has to pay whether its 10 or 15 or whether its 20 or whether its 30 or whether its 40. If everyday you wait and the these obligations and these promises and these debts accumulate means that the next generation will pay that bill as opposed to seniors today. So theres a terrible unfairness about what were looking at today and as you probably know, one of the problems is we are allocating more and more resources toward transfer payments to seniors and away from things like head start, n. I. H. Grants, investments in education. So youre also having the seed corn eating problem. Rose okay, so there are lots of things that come out of all this. Number one, i hear you, you know . And i think other people recognize the problem we face, you know . But youre raising youre basically saying to young people youve got to do something. Youve got to get organized. Otherwise youre going to face a crushing burden. Yes, theyre going to. Rose and you will have to pay more and they wont youll have to pay more and you wont get out as much because people who are older are getting out what they were promised. Yeah. Its one of the things i bristle sat that ive read in some of these things that im antientitlement. Rose im going to get at that. Im not antientitlement. I want youth today to enjoy the benefits of the Social Security net and the that retirees today enjoy. And if we continue to share the pie we t way were doing it theres going to be nothing left for the youth of today. So its not that im antientitlement, its that im for sustainability of entitlements. Rose and for those who stand up to say look, weve just got the let the baby boom generation get through the system and then we can figure all this out. Well, thats where my day job comes in and thats where that is total nonsense. Because what happens is thats the rat through the python theory. Once the rat goes through the python youre fine. By the time the 20 or 30 years are up, the debt is so high that the Interest Payments alone start to become bigger than the entitlements were during the 20 to 30 year period. Rose are you at all encouraged about the fact that the debt is going down . Oh, none whatsoever. Rose you see that as temporary . You see that as small . You see that as what . Thats tiny potatoes. Thats a short term cyclical phenomenon that has nothing to do with entitlements. Nothing. We are right on the front end of a demographic surge that is going to cause investment spending to go crazy. Let me put in the perspective for you. So the next ten years and this is with the administrations optimistic budget. The growth the growth, not the spending. The growth in Social Security, medicare and medicaid is going to be 780 billion. The growth there spending on children is going to be 20 billion. Okay . Thats what youre looking at. Now, i dont know what kind of society you want, but this is just transfer payments to the elderly who, as i mentioned earlier, have already been increasing their share of the pie for the last 40 years. I think its unfair most of all, and secondly it will set up an unsustainable situation down the load. We cant afford it. Rose here is the alternative argument, too, when you look at this issue. Take larry summers, somebody whose intellect you have some respect for. He argues that all the talk about entitlement reform and understands down the road the fears that you are pointing to says what we need to do is create growth in the economy and the growth in the economy will take care of all the problems that stan is worried about. Okay, so, a, it wont take care of all the problems im talking about. B, im very sympathetic rose im simplifying that a little bit. Im sympathetic to what larry is saying, who i consider a friend. I hate to get too numbery here, stock . So 40 years ago and this is an argument larry would be very sympathetic to. 40 years ago we spent 32 of federal outlays on investment, government investment. That would include things like infrastructure, education, r d. Rose science exploration. Rose and we spent about 30 on transfer payments to the elderly. We now spend 68 on transfer payments but investments are down to 15 . So i think to larrys point, what did we get out of the investment . Well, we got the internet. We got g. P. S. , we got the human genome. Rose so thats where you agree with him. I totally agree. And if you look at the sequester rose that the investments are worthwhile and important and crucial to our future. Yes, but we are cutting the investments so we can continue to let transfer payments to the elderly grow at a very rapid rate. We cannot do both. Rose or were cutting the investments because we do not have a realistic look at where taxes which youre prepared to have a real itselfic look at. Yes . In other words, youre not coming here as a representative a view often expressed by the 30 members of congress, although you had reservations about the health fund, defunding the Health Care Even though you expressed riz reservations about it. My point is you did not you thought they were silly, maybe to use your own words, to try to attach defunding to medicare to the debt ceiling. On the other hand, youd be prepared to attach Something Else to raising the debt ceiling in order to have some sanity to address the problem youre talking about. Am i right or wrong in interpreting that . I was 100 against tying obamacare to the Government Shutdown. Rose that is defunding obamacare. Yes. That argument was decided and as much as i didnt like the conclusion, i have never been for defunding obamacare once it was voted for and certainly linking it to government to the Government Shutdown. Insane. Rose are there circumstances in which you would think a Government Shutdown is satisfactory if, in fact, for example, say well shut down the government rather than raise the debt ceiling. If i thought there was a big enough carrot and to me that would be entitlement serious entitlement reform at the end of the road i would be willing to flirt with a Government Shutdown. There was no big carrot at the end of the road. Both parties agreed. The one thing we werent going to do is cut growth in payments to seniors. We werent even talking about entitlements. We were talking about other things. Well, basically were talking about obamacare. Rose well, the president has said whether you believe him or not that theyre certainly prepared thats what the budget process is about right now is that theyre prepared to look at some changes in entitlement reform in contrast to changing the tax structure and the spending the president says a lot of things. The first thing that set me on my media tour and the college tour was the president when the budget battle started back in the beginning of last year stated on television the one thing we are not going to do is balance this on the back of seniors. That was his initial position and, by the way, i havent heard a lot different from republicans. Rose how do you want to balance it on the back of seniors . Okay, so in this is where my role as a philanthropist and my day job work. Were cutting n. I. H. Grants, were cutting head start in harlem but were not even touching this other stuff . Rose so that brings know this point. How would you touch the other stuff . Okay. So rose thats the point. Yes. Now im going to give you an answer but rose i think thats also larrys point to a degree. Rose im going to give you an answer but the first thing i want to say is the first thing ive been trying to do is identify the problem. I dont have a monopoly on the truth. So i have my own opinions and i have some suggestions but i really think the answer to your question needs to be fought out in the political arena. If youre asking me for what my suggestions would be, the first thing wed have to do is the really lowhanging fruit. You can means test to a greater extent medicare. You can certainly means test Social Security. We havent even done that. Rose so people like you who dont needed me care would not get medicare. Correct. I would look at it philosophically. This was an insurance safety net we paid into 40 or 50 years, we bought fire insurance, the fire didnt happen, lets give the insurance to the people that need it. But thats not a whole lot of money. I guess where i also differ even from the republicans is i would not exempt people over 55. When i looked at the share of the pie that the current seniors have got in the last 40 years, the chain weighted c. P. I. , that wouldnt go far enough. I would freeze the thing. Freeze it in terms of Social Security. Now, i will say 30 or 40 of the people really need Social Security and this is where the means testing comes in they should be provided for. I do not want to see seniors in poverty. I also dont want to see rose you dont want to see seniors without medical care and without all the things they had a social contract to receive. Yes. And theyre receiving it. Then you get into the the elephant in the room, which is the Health Care System. And here it gets very complicated but let me just say that the first thing you have to do is put incentives at the consumption level and its already happening to some extent through more copayments. And that should start to push down the cost. The second thing is i think the extent that we have malpractice in this country is causing a lot of testing to be done that dont need to be done c. Y. A. Policies for hospitals, and so forth. But then you get into very controversial issues. Like the end of life. If you have a terminally ill patient who has a 0 chance of living more than two months and its going to cost a Million Dollars to keep them alive for two months, how much should that family pay versus society . I give you a horrible story. When i talk to the university of North Carolina, a crying mother came up to me because her 93yearold mother had just been put into a hospice and she was getting thousands of dollars which she didnt want for the mother in the hospice but her sevenyearold daughter couldnt get the money for an operation she needed and the woman was literally crying. The just position of the 93yearold mother who had probably two or three months to live getting thousands and thousands of dollars but there was no funding for the seven. This is why i say Stan Druckenmiller cant do this but its a conversation and were not having it. Were saying okay, as long as we can keep them alive, lets keep them alive. Rose in order to understand where you are and this is why some of this is surprising we obviously have Capital Gains tax and we have ordinary income. You basically want to see the Capital Gains tax rise to the rate of the ordinary income. I think theres a different way to grow the economy. Rose i also want to know what your conservative friends think of this. Okay. So first of all rose your wealthy conservative friends. Lets go back to larry summers. Rose all right. I think taking the Capital Gains rate and the dividend rates to ordinary income while you simultaneously lower Corporate Tax rates to 0 would make the economy grow dramatically and revenues to the government would actually rose and that puts you where larry is. Would actually increase. But he likes to do it through spending, i like to do it through tax reform in that regard. Rose so you Capital Gains would go to the level of ordinary income. You reduce the Corporate Income tax to 0. Yes. Rose you would assume there wouldnt be double taxation as some people like to argue. You would pay tax on corporate profits because youd be a shareholder, right . Yes, corporations have presented its like living things to people. Theyre not. Corporations are owned by shareholders. If you tax the shareholder youre taxing the ultimate rose at ordinary income rates. Yes. And theyre clipping coupons, theyre not hiring people, theyre not engaging in spending. Rose and corporations are doing that. And take their trite 0. By the way all this money they talk about overseas, if the corporations take that money and buy back stock and issue dividends, that money comes back at a 40 rate. Theyre not even bringing it back to the 35 rate. Rose can you think this has a chance in hell of being politically viable . First question. Second question, is the reason youre sitting at this table going to campus is is because you want to create some kind of Political Action that might result in it having a chance in hell . The second question i want to shine a light on this issue and i am desperately hoping the young people will start a movement. Do i want to start the movement . I dont think im capable. Do i think i can articulate the facts and have i seen them respond that somebody out there could start a movement in yes. In my opinion they were instrumental in getting marriage passed. Theyre moving the needle on the environment. This thing is very similar to the environment, by the way. Rose on both of those issues you were on their side. Yes. Rose on the gay rights and the environment. Still am. Rose okay. Im trying to lay out a set of facts and hoping that when they look at those facts they will start to put political pressure and consider this issue as important as they do the environment and the gay rights. Rose do you think youll find more receptivety in the Republican Party or the Democratic Party . In the youth . Rose yes. I know what ill see, which is enthusiasm on both sides. When jeff ken and i have gone not only have we spoken an hour, theyve asked questions for a half hour and there are 40 hands when we leave and it doesnt matter whether were at berkeley brown, u. S. C. Or North Carolina or right or left. Theyre all there. Rose explain who jeff canada is. You both went to bowdoin college. Secondly he runs rose jeff canada runs the harlem childrens zone. I have been chairman of the harlem childrens zone since its founding. Rose and they do what . Good question. Theres 100 square blocks up in harlem. They take children basically from birth all the way through college threw a bunch of what i would call social antibiotics at them, education, baby college, prek, try and get them through college so we can bryk the cycle of intergenerational poverty up there. And as you know, charlie rose inter i didnt hear the word. Intergenerational poverty. And as you know theres a bunch of pilot programs, some inspired by the president , to try to copy that model around the country. Thats what jeff canada does. He runs that. Rose and you have been his big supporter from since the two of you rose i was on the i was on his preboard his preorganization which was the breedland and when he founded the harlem childrens zone i became the chairman and have been at his side throughout. You dont have to do much. Rose okay, i understand what youre doing in terms of washington i mean in terms of young people in campuses and also looking to create a movement that has some other has the kind of legs that seems has some success in the environmental world. When you go to washington and carry your message, what kind of response do you get there . Whoever. Whether its a finance committee whether its i went to washington rose rand paul, paul ryan. I went to washington in 1994 and argued to raise the retirement age in 2007 because thats when i knew the demographics 2011. I had very little success. I havent even gone to washington this time because its my view until the young people show them that theyre concerned on this issue the people in washington will not give a damn about this. Rose do you think that we i mean, government is dysfunctional, obviously, in terms of being able to do some things to address problems as it ought to be. Do you think we can overcome that . Is this in a sense where people say they can be dysfunctional in washington but were going create something whether its this kind of issue for you or other people in which were going to affect elections and were going to affect the public mind. Rose i know we will overcome it, but i dont know what the timeline on that is. We have these phases in america where crazy things happen economically and politically. And whats going on in washington now will not be sustained. I dont know when it ends. We all pray it ends some time soon, maybe the next five or ten years. I happen i have great hope that maybe the right president could bring them together. I dont know whats going to end it but it will end and the United States will be fine in this regard. Rose so we started talking about george soros and hes on the left and youre somewhere on the right but on social issue are in the center. What does george say about your ideas . I havent talked to him about it. Rose why not . Havent gotten around to it. Both his sons came to me and they really like it. Rose come on. Youre smarter than this. Why havent you talked to him about it . I probably will in the next this is pretty new for me, charlie. I didnt even know i was going to do this. It will probably happen in the next month or two. I dont know how hell think about it. I have been very pleasantly surprised by the reception ive gotten from the intellectual left on this issue when i got to sit down with them and explain my case to them. The stuff thats been written about objecting to what im saying, im not saying. So i dont want to speak for george, there will be a time in the next few months where i will sit down with him and see what he thinks about it. Rose thank you for coming. Thank you. Rose back in a moment. Stay with us. Rose Guillermo Del Toro is here. He is the mexican director and author best known for making fantasy and horror into an art form. He once said on this program if theres not a monster on my call sheet i wont show up to shoot. His films include pans labyrinth and the this summers pacific rim. Heres a look at some of his work. Rose what is inside of your mind . laughs the things that are in the book. Rose but youve already put these things on film. Why do you need to put them in a book . Well, the book actually, what it does is it collects my notebooks. It collects about a fifth of the images in my notebooks for each project and for some project i have that not made. So people can see not just the sleek preproduction art that you put in a making of art book. They can see my process. Like the pale unanimous pans labyrinth. It was an idea 10 years before pans labyrinth. Then it evolved. Rose let me see your notebook. This feels like its classic. It is. I bought them in 98 in a tour of venice with Meara Sorvino doing mimic and i found this guy that that did these notebooks by hand ai bought seven of them and filled three of them. I think a couple are going to stay vacant. Can i show you one that i love . Rose yes, please. I think you may like this one. This is one of the rose describe this to me. Its the girl in the main flash back of pacific rim. Its a moment that started the whole movie for me when i understood that the girl as a kid had lost her heart and i symbolized it with a little red shoe in her hand and thats when i understood the movie. This is one of the first images i drew of pacific rim. Not a giant robot be but a little girl with a red shoe. Rose and what are you writing here . I write ideas. I can be writing about several projects at once. I can be writing a piece of dialogue that i heard somewhere. I can be writing about a novel that i read, a movie that i saw, a piece of music. Its really theyve been for many, many years quite rose in spanish . Spanish and english. Rose but mostly spanish, snow depends on the project. And what i like is i keep my pen in my pocket. I keep the little book and its sort of a low tech rose yes, its very low tech. laughs but as i said, the stuff that has a rubber band is stuff that i already did and i mean, i like the sort of 1940s rose whats the nature of a monoer . A monster by definition is solve i involved or extra out of nature. So the fact is you can make the monster in natural forms when you have to magnify them a way. And the nature of a monster is something that represents something. It can represent a concept like the vampiretor dragon. Or it can be simply a force of nature like the giant monsters in pacific rim and japanese movies that represent the force of nature. Or in the case of godzilla, the power of destruction of nuclear energy. Things like that. Rose could you make a nice little sweet him . A love story . Im doing it but it has ghosts and murder. Rose i know but can we do it without ghosts and murdered . When we talk about it, one day i will love to do the heart is a lonely hunter. The Carson Mcculler it has no supernatural but it spoke to me in my youth on a very personal level. But i havent im still busy with monsters right now. Rose i know. Can you explain it to me, though other than the fact that youre influenced by bradbury and ackerman and you had an unhappy childhood, whatever. I think whenever youre born with sensibility and intelligence youre going to have an unhappy childhood. To some degree youre not going to fit in the outdoor sportsman world. Youre going to channel it somewhere. And as i kid i was 70 years old. I was a hypochondriac. I read the Family Medicine encyclopedia in my house and diagnosed myself with every disease known to man. Rose well you know you were interested in monsters. Always. When i used to go to a church i was raised catholic. I would be looking for the gargoyles and the teeth. Rose that appealed to me, too. The idea of the gargoyles. Its in all of us. I think the way we understand the universe is by codifying hit in the dichotomy of angels and demons. You can call them monsters or superheroes but we have to mythologize the universe in order to apprehend it. Its like digesting concepts that are so large so super or supra human that you need mythology to apprehend them. To understand them. Rose do you remember the first show we did when we looked at the new creative artists in mexico . Yes. Rose youve been in very different directions, havent you . We have. At the same time we have all remained very close. Like alfonso rose you read each others scripts . Yeah. Alfonso and alejandro both came to the editing of pacific rim. I was in the editing of gravity. Rose you were . The whole process. And we got together to watch alejandros movie, give him a critique and idea, we all read the screenplays. We are perhaps even closer now than we were when we did the first interview. Rose but youre doing very different things. Very different things. Rose but you collaborate even though its different . Alfonso came up with the final line of pacific rim and if you remember i came up with the final kiss of rose yes, i know. Its a constant retro rose whats the final line of pacific rim . Its when he says youre holding me too tight. The guy looks like hes dead and he says youre holding me too tight. And alejandro is the same. He came in and took eight minutes out of a film with me. Rose took it out. Yeah. Rose was it hard for you to take it out . No, no, whatever these guys come in its like visiting the doctor. You dont want to stay dressed, you dont want to look fine. You want him to poke you around and tell you whats wrong. Rose so whats bleak house bleak house is in 2006 i was hanging one of my paintings in the kitchen in the house and my wife said to me you cant hang that. Thats too weird for the kids. Rose even your wife thinks youre weird. Oh, yes. And my daughters. And then i said you know what . Im going to buy my own house. Ill live with you guys but everyday im going rose you can go to my house. Yeah. And i bought now its two homes. Its 10,000 square feet. Thousands and thousands of books. Books that are from the 1800s rose and that picture i showed you theres a few pictures of that. Rose this may appeal to a lot of men and women. How does this work . Well, i think its fantastic marriage idea. The. Rose it has appeal. It that has appeal because then you know, one of the greatest fights in a marriage is for space and it doesnt matter if its twobedroom apartment, one room. As long as you know its yours. And you can do whatever and the irony is when you look at the house i do the cleaning, everything. Its perfectly organized. Its not a hoarders rose she would not be embarrassed if she saw it . No, no, she likes it. Rose you allow her to come . Oh, yeah, she comes over. She likes it. The daughters are a little less keen to visit. Rose and she has the home where you live . To oh, yeah, every morning i kiss them all, i leave for the day. We have dinner, watch t. V. , go to bed. I spend eight hours on my own. Rose just like going to the office for you. It is my office except my office in the house is a room where it rains 24 hours, seven days a week. I call it the rain room. Its a room that has artificial rain and artificial window looking out into a thunderstorm. Rose laughs whats that about . I like thunderstorms and i live in california. I had to create one. Rose laughs you should have gone to seattle. I could have. But i like the weather. I just like the thunderstorms when i want it. Rose lets look at the people youve created. Lets start with pans labyrinth. Pale man. The pale man came from the idea that i thought i needed to create an ogre, a childeating creature that was the ultimate sort of nightmare for a kid. And i came up with the idea of this emaciated figure and then i removed the face from the figure and i gave him eyes on the hands because i thought rose so whered you get that . The eyeballs in the palms . The first thing a did displaces in a drawing is the eyes when they are creating monsters. Gives the monster four, five eyes, whatever. Rose they change the eyes first . Because one of the eyes is the soul and thats one of the first things you attack. And it happened by accident because i was removing the face, then i told my wife we were having dinner. laughs this is a dinner conversation with my wife and i. I say do i give him eyes on the palms or do i give him wooden hands that he can screw on and theyre on a platter. She says i like the eyes. Rose i do, too. Lets look at the reapers in blade 2 the unhinged jaws. Same thing here. When they open the jaw opens like a snake. It disengages the jaw. I think what you do with the human face is you break it down into elements and then if you play with an element it becomes a very one single element, it becomes a very scary image. Im hopeless. Rose laughs you are hopeless but happy about it. You know after 40 something you start realizing that you are all about specificity. You become who you are. And then you just distill that and distill that and distill that. Style is specificity and reputation. Rose he also said a glimpse into the world proves that horror is nothing other than reality. And its true. But reality i think filtered through imagination. Because even hitchcock knew that you needed even though he was working in a realistic fabric, except perhaps in the birds which as close as he got to Science Fiction or horror, really you need a dethat i will is extraordinary to trigger. So you need the filter like the lady vanishes. He needs the lady vanishing to guarantee an adventure will occur. Rose you have said that horror has been given a Bad Reputation and it isnt really considered real art. Yes, i think now is coming to a place where i think that what i want is buried enough that people know that no matter what size of movie or genre or variation or genre im doing its sincere and from my heart. From the beginning it was hard to start certainly with kronos the first movie saying im going to make an art movie with a vampire or im going to make an art movie with a ghost. Thats why its so satisfactory to see them, for example, now on the criterion collection. Rose tell me about that. At some point we started with kronos and quickly followed by devils magnum and theyre so beautiful, the presentations, we spend weeks polishing them and for them to take a place in that collection which is some of the best films ever made is very satisfactory and beautiful. Rose the penguin series, whats that . I was asked by penguin, the publishers to cure rate a collection of horror titles and write a new introduction because the genre is ultimately the fantastic general have very well storied and if you look back you are going to stumble upon oscar wilde and henry james and Charles Dickens and i wanted to show through this collection some of the best examples of the genre, mary shelley and so forth. But i also we were also introduce or reintroducing an author that is very neglected ray rawson with a title called Hunter Castle that was out of print for a long, long time and i wanted to reintroduce the audience toe that and iy very good introduction i think as a primer for people buying that collection for the first time. Rose you look around and probably see everything you can possibly see because it provides a kind of it provides an experiential quality to you as a creative person. I remember a quote by jerry lewis that said a director reads everything he can and watches everything he can. You can be reading an article for a magazine and you should always be voracious on that and be curious because you dont know where the next great idea is going to come from. So i watch t. V. All the time. I watch movies all the time. Rose and you know what else you do if you do that . You can put ideas together. You can connect the dots so theres something here and there. And through your eyes you make it unique because you see how the two connect. The novel is a collection its like kid when youre a kid and youre given a great plower or insect and you press them in the book. Thats what this is. Im collecting them from all over the world. Rose frankenstein was the book that influenced you to host . Perhaps. I think frankenstein is my autobiography. A very strange creature born in a world that he doesnt quite understand. Rose yes, i agree. I was thinking about whether you and alfonso and you guys might make a film together like the coen brothers work together. Rather than just collaborating and looking on the editing process. You can make a great mexican film. Or we can create a great story of murder because we would murder each other. Rose laughs i think beauty of collaborating is that every time i visit his editing room its his editing room. But if we have our editing room rose wouldnt work . Directors are like piranhas. You dont put three in the same project. They can visit the tank but not theres only one director. Brothers can do it. Alfonso did it beautifully on the screen gravity with his son. Rose what are you working on the future . A gothic romance story with jessica chastain. Rose i love her. Its a period piece, rrated movie so its and for the first time this is funny because normally i do my adult concerns i do them in my Spanish Language movies and my teenager child concerns i do them in the american movie. Like hell boy and pa terrific rim. This is the first time im doing an adult theme movie with adult concerns there an t english language. So it will be interesting for me. Rose so if you look forward to 3d and all of the kind of imagery you can create now, whats the future of film making . Where do you think its going . I think that the future of film making is a big Assessment Division with very small stories going into a different Delivery System and it can be a marriage between cable, video consoles and internet and the bigger stories at the center. Rose i think youre right. It seems to me that with the story today is how it will be distributed in the means of distribution and that will change everything. Rose and whether its streaming or whatever it might be. And because of the video world today you can really send it worldwide at one time. Rose youre right about distributions. Right now we are on the threshold with someone coming to an alternative to distribution that will change it. Because right now thats why pirating is holding, distribution is still being done in the same basic way that was done in the beginning. Thats what needs to change. Rose great to have you here. A pleasure always. Rose the book is my notebooks, collections, and other obsessions my notebooks, collections, and other obsessions. You can buy that in the bookstore. Thank you for joining us. See you next time. Captioning sponsored by Rose Communications captioned by Media Access Group at wgbh access. Wgbh. Org explore new worlds and new ideas through programs like this, made available for everyone through contributions to your pbs station from viewers like you. Dr. Joel fuhrman is a boardcertified physician whose groundbreaking work has been acclaimed as a medical breakthrough for weight loss, disease reversal and prevention. The american diet today has 62 of calories from processed foods. How many of you would like a promise that you dont have to have a heart attack when you get older . Hes a New York Times bestselling author and a widely published nutritional researcher. And i see people putting this into practice every day, transforming their lives. Never forget that your health is your greatest wealth