And arrive at full understanding with this and should i be teclaird president i would be honored to consult very regularly, and put forward a common vision and implement that vision for our country. Rose we conclude this evening with jim chanos, an american investor who has provocative ideas about the future of the chinese economy. There is a saying in china the mountains are high and the emperor is far away. And all of the action, when the rubber hits the road in china happens at the local level, and thats where the technocrats in beijing, although they can direct things, theres a little bit too much faith thats put in the Central Committee in the planning committees, because at the local level, the intensives are still to produce numbers, produce growth at any cost. Rose a, and jim chanos when we continue. Funding for charlie rose is provided by the following and by bloomberg. A provider of multimedia news and Information Services worldwide. Captioning sponsored by Rose Communications from our studios in new york city, this is charlie rose. Rose on april 5, million of afghanistans took to the polls to elect a new president. It produces no outright runners, producing a runoff between ashraf ghani and abdullah abdullah. Abdullah rejected the runoff. Secretary of state john kerry intervened to broker a deal where all eight million vote will be audited by international observers. The audit has already been suspended twice since it began last week. The results of the runoff were scheduled for july 22. As of wednesday, only 4. 5 of the roughly 22,000 ballot boxes had been examined. Joining me from kabul is ashraf ghani. I am pleased to have him on the program. We had earlier last week, abdullah abdullah, so its a pleasure for me to have a chance and see and talk to someone who has been on this program before. Welcome to the program again. Its a pleasure to be with you. And with the public in the United States. Rose thank you. Where is the audit stand today . The audit has begun in earnest. All the criteria and indicators have been agreed. We hope that now it will acquire full speed, and every day, hopefully, will be a significant count. Unfortunately it will be suspended for three days because our major holiday is coming. Otherwise, both the Election Commission, the international observers, and the candidate agents are all geared and are looking forward to carrying out the full audit. Rose and when do you expect it to be completed . We do not know because i think its going to take a week to really see how many ballots can realistically be counted in a day and then on that basis, the u. N. , the united nations, which is supervising the process, will determine a date. This is to make sure that the public is not given conflicting dates, and that then expectations are built around that. Rose do you anticipate further disruptions . No, i dont. I think that all the rules and procedures have been worked out. We are all very keen to make sure that the audit is carried out in terms that were agreed. Its a major logistical undertaking of a significant number of the ballot boxes from our provinces. We have 34 provinces, some in fairly high mountainous areas, and some in difficult remote locations or in the process of being moved to kabul, and Assembly Line is being set up in hangars at the Election Commission so that all the vote can be examined and the results determined. Rose is there clear evidence that there was significant fraud in this election . No. The 5 that has been counted so far, does not show any major irregularities. There are allegations of fraud because the allegations had cast a shadow over the legitimacy, i proposed that a full 100 audit be carried out, which is unprecedented in elections, and this will put to rest any allegations. If theres any evidence, its going to be found out. Otherwise, it will be very clear that the people that participa participated, to be a day of celebration for all of afghans to make sure that the results of their participation have been register, understood, and honored. Rose but did you accept the audit on the basis of perhaps there was some fraud on either side . Or on both sides . I accepted no, i accepted the oughtid to make sure that full transparency was provided when any candidate or their adhere ents make allegations of fraud, i think its our duty in a democratic process to make sure that these allegations are fully investigated. I had repeatedly proposed to my colleague, dr. Abdullah, that we enter into a exact and understanding that we will not accept or condone any fraud in the elections. Now, that wasnt it did not happen during the election. Now weve joined hands to make sure that the afghan public knows how they voted, what has been the number of ball the ons, and that each ballot has been validly examined so that theres no doubt. Transparency is central to legitimacy, so that the next president of afghanistan will have the full benefit of legitimacy that comes from a transparent and fair voting process. Rose do you believe that the allegations of dr. Abdullah, that there was widespread fraud, and that explains the difference between the first election and the runoff . Or do you believe he has other motives . Lets put that behind us. Whatever the allegations, theres a full process to test them. So we have agreed to a Testing Process that would determine, and this is a matter of weeks. Its not a matter of months, and both the World Community and the afghan public will fully know whether there were any irregularities versus allegations of wide fraud, and should there be any, we do not condone it. Ive condemned any single act of fraud from one vote to as many as there may be because i believe in Public Participation, and in honoring the citizens of this country who really created an epic. They braved security, they overcame the threats of violence. Men and women came out, stood in lines, long lines, twice, and that is the central fact of these elections. A Grassroots Movement that created the conditions of the birth of the modern saturday in afghanistan who citizen in afghanistan who is a fully empowered individual who votes on the basis of her or his preferences, so its important to celebrate that accomplishment, and theres a process to make sure that any allegations are investigated. Rose does this audit put to rest the idea of any effort to form a parallel government . Absolutely. Its Crystal Clear that both of us will abide by the results of the audit. And the reason we were insisting that it be a fully 100 audit is that a 50 audit, which was initially proposed, would still leave some room and doubt. And both of us have made this commitment and beyond that commitment, weve agreed to form a government of National Unity, so that people of afghanistan who voted for two candidates will again be united as one nation per suing stability and prosperity, which is our key objective and desire. Rose does a government of National Unity assume sharing of power . The government of National Unity assumes a common, wideranging program of reform to put an end to corruption, to lawlessness, to generate Economic Growth so we come out of dependency, to pursue peace, to provide the platform for Public Participation to make the government accountable to the people because its the people who we work for. And it would bring us all to focus on what matters to our people. Our people are poor. Theyre unwell. They need help. They need education. They need water. They need sanitation. But more than anything else, we want to overcome violence and dependence. Our people are dying every day. We need to overcome this and we need to give our country a clear sense of direction based on a vision that is credible and a system of governing that is effective and transparent. Rose im very interested in what you would do if you are chosen as president and i want to talk about those issues but let me stay with the election and the government of National Unity for a moment. Here is what dr. Abdullah told me in an earlier interview about a government of National Unity. I want you to listen to that, please, and tell me if theres any difference in how you two perceive it. , of course. Rose here is dr. Abdullah. Help me understand what is the commitment to a unity government upon have both you and mr. Ghani said that you will form a unity government and whoever wins will have a top post and the other will be Prime Minister . Thats right. We both agreed on the formation of the National Unity government in the presence of secretary kerry, and that is the essence of political agreement between us. And there is a Technical Agreement which is on the issue of the audit, and then its important that both agreements are implemented in good faith, and we are dealing with it as such, and we believe that both are important, while our focus is mainly on the auditing. At the same time, we think that the political agreement is also important for the future of the country. And it creates a sort of winwin situation, rather than winner take it all. And as much as emphasis we do, and we put on the fairness of the audit process. At the same time, we realize that there are neets of the country, which has to be addressed and the formation of the National Unity government will help afghanistan. Rose but my assumption is if you are elected president and he is, as part of a national government, Prime Minister, you will have the power. Am i correct . Our constitution is modeled on the constitution of the United States. So its a president ial system. And the president s authorities are defined in the constitution. What weve agreed to is to create an office for two years that would be the equivalent of a chief operating officer or a chief executive officer. The duties of this office for the next two years will be defined by president ial decree because the constitution allows for delegation of some of the authorities of the president when circumstances require. And weve agreed that within two years, the president would initiate the convening of the equivalent of a constitutional convention, to amend the constitution, to consider amending the constitution, to create an office of an executive Prime Minister, not a parliamentary, not a shift of parliamentary system, but one that is executive in many countries, ranging from france to others to russia that can do this. The circumstances of afghanistan require consultation, so while the authority of the president is clear in the accountability of the president to the country is very clear, our National Interests demand that we consult closely and we will because reformed are required in both national and International Experience shown is that carrying out intensive and extensive reform is best done when you consult stakeholders and arrive at full understanding with this and dr. Abdullah is an able man whom, should i be declared president , i would be honored to consult very regularly and push forward a common vision and implement that vision for our country. Rose it was, if the vote of the first round are duplicated in the runoff and in the audit of the runoff, a remarkable comeback. How did you do it . By taking a its a grassroots campaign. We reached every single group of stakeholders in the country through a painstaking process of identification of their issues and reaching them. One of the things that did not happen because there were choices, dr. Abdullah chose not to participate during the second round in nationally organizes debates. What we did was to take the town hall meet that can new england has made so famous, but thanks to television, broadcast it nationally. So, for instance, when we had a discussion with the youth, six Million People across the country watched it. We had a meeting of our conscious scholars, 3,000 endorsed us, and after that there was a mosquetomosque campaign, that particularly in the insecure areas of the country resulted in creating peaceful conditions. And its the same. That urged our women to come out. You know, there is a family headed by a religious scholar, that whose women had not for 20 years had not even gone to medical clinic, and he rented a series of vehicles, many buses, and first carried his own wife and then the entire village. This was truly a Mass Movement across the country with the urban areas of the country. We engaged in a very intensive discussion of seeing how informal settlements, informal property rights, that are a burden on the people because of corruption and lack of certainty, would be turned into solsol solid property rights. Two women presided over a large public discussion again, and there were many such meetings. We campaigned in different parts of the country, identified key issues, and particularly in the last five days, there was a doortodoor Campaign Across the 34 provinces of afghanistan. The results are all now posted on the Election Commissions web site, and it shows that our votes in every single province of the country increased, some by significant orders of magnitude, and some significant enough to make a difference. Our voting pattern is a national phenomenon. There is no province where we have not succeeded in reaching the public, and creation of the centrist consensus. During this campaign weve shown that people who a year ago were not willing to talk to each other were brought on the same platform in campaigns, intensively across the country. And this has really been a very, very proud moment for us to have generated such a turn turnout ad such a scale of participation. Rose if you win, and the the president of afghanistan, im interested in several relationships. First washington the United States. Would you sign a Security Agreement . And what would you like for that Security Agreement to say . First of all, id like to thank the American Public, the american congress, and the American Government for their immense sacrifices in blood and treasure during the last 13 years. The relationship with the United States is a strategic relationship that is based also on the value of democracy. Our people have demonstrated that we like democracy. And we like our vote to count. I negotiated. I was one of the three key people involved in negotiations of the bilateral Security Agreement. I find it both in Afghan National interest and in the United States interest. Ill be signing it within days of taking office. The agreement has reviewed by consultants, representative counsel, across the board in afghanistan. They have recommended that it be signed. I find its signing and our interests and i hope that we can demonstrate that president prest obamas decision to scale down the number of american troops very significantly within two and a half years can be matched by a Major Program of reform of our security institutions, of our legal system, our system of governance, and our economy, so we can demonstrate both to the American Public and to the world at large that we can take charge of our destiny and afghanistan is a working and going proposition. We would like to broaden the partnership from just being focused on security to being an economic and cultural relationship. Wed like a universitytouniversity relationship. Mosquetochurch relationship, people to people. Rose do i assume you are saying that youre comfort that afghan can, as american troops withdraw, fill the void and, therefore, the schedule that has been proposed and committed to by president obama will be adhered to by all concerned . I had the honor to lead for three years the security transitition. When i began, people thought it was suicide to accept a job where most thought it was impossible to reduce the number of american troops pie over 100,000. I worked with some of the greatest military minds of the United States, general petraeus, general allen. In the process that i designed and then reached agreement was in phases. So instead of jumping straight to not knowing whether it was empty or full, we adopted a strategy of gradual testing in five phases. The u. S. Troops withdrew with honor, with full honor and dignity, having accomplished assistance. A very significant commitment was made to building up of the Afghan Security forces, and thank god, Afghan Security forceforces have shown their patriotism and their commitment. Now we are assuming that the process of building the Security Forces would be supported for 10 years. The United States administration is repeated this assurance, but we need to understand and acknowledge that it would not just be the administration but the congress and the American Public and the media, of course, that would review this. So given the decision that the president of the United States has made, we need to focus on these two and a half years. We cannot waste a moment. And we must make every effort, and then see where our American Partners will see the accomplishments and that we can make sure that the commitments of the 10 years are honored and support continues. Rose you think there are lessons to be learned from iraq . There are lessons to be learned from iraq. And one of the key lessons that from day one i entered as a candidate we insisted on, inclusion. A winnertakeall approach is counterproductive, and conditions of postconflict or ongoing conflict. We need to have a sense of the citizen front and center because it is the citizen that determines the stability of the government. And all parties must bring their differences within the government, the lincoln type approach. Bringing people within the tent, so that the country at large can be secured from the disputes of the elite is a very important lesson. In iraq they practiced exclusion happen. They did not bring everybody together around the common table. They did not create the trust that is necessary for assuring people that the government is not an instrument to be used against them, but an instrument to Work Together for realization of common goals. Rose what is your assessment of the taliban threat . And are you prepared to negotiate with them . And how do you see the nature of those negotiations . A government of National Unity means an end to all parallel governments. We must create the condition that there is only one government in afghanistan with the full legitimate mandate of the people that speak for the country as such and looks at every afghan as being equal to another one. One of the slogans on the base of which ive run. The taliban and we acknowledge the political reality of afghanistan they cannot be wished away or eliminated through use of force. All conflicts must end at the negotiating table. We are committed to ensuring that those issues that are grievances, that are about participation, that are about paving of Political Solutions are brought forward. The key to this is that Afghan Taliban who believe in being separate themselves from larger regions of violence that are dedicated from nothing but destruction and would like to use our country as a battle field for halfbaked ideas. This means serious engagement. This election has already created a major platform for peace because in the insecure provinces, previously conceived, widely unsecure provinces of the country where participation was possible, our religious scholars and our people have created the conditions of engagement. Rose to achieve that, would you sit down with mullah omar and talk about the conditions for Taliban Forces to lay down their arms . Peace requires sitting down with those who are engaged in conflict. One of the key advantages that i bring is that ive not been a participant in conflict o. The country largely responded to my appeal of clean hands. One of my hands is free of blood and the other is free of corruption. We need to engage in discussio discussions, and discussions must be based on preserving the gains the last 13 years, the same way that weve insisted on formation of government for National Unity and the taliban and i both conditional our constitution is our key framework but theres a constitutional mechanism for changing the constitution, not the fundamental values of the constitution, but specific arrangements that could improve governance and bring people together. Rose you have the support of president karzais brother. It is said that you had the support of president karzai. He is, as you know, among the American Public, a controversial figure, and among members of the u. S. Government who have dealt with him. There have been consistent allegations of corruption. He would not sign a Security Agreement. So what is it that you think is Hamid Karzais legacy . First of all, president karzais elder brother endorsed abdullah, campaigned for him, and very actively engaged with him. The karzai family endorsed different candidates as individuals. Ive not had support from the president. Weve maintained cordial relationships, but dr. Abdullah, thanks to the legacy of the very large political party. Is a major presence in government, ministries, governorships, police posts, et cetera. I have no one in the government. I have not appointed. So i have not had backing from the government. The president president karzai took power in a very difficult time and his legacy will be both a person who has managed to maintain an umbrella under which various afghans with very different outlooks and backgrounds and persuasions have managed to cohabit, and also a legacy where corruption became a cancer that could not be contained. We are determined to build on the positive legacy and deal with corruption in a really determined manner because without tackling corruption, our people in general and our youth and women who have been the key drivers of this campaign will not have a place under as a keen student of america, american the american economy, as well as american politics, you know that we have here a kind of standard of looking at president s and measuring the first 100 days of their time in office. What to you hope to accomplish in your first 100 days after you are inaugurated president , if in fact you are . Within the first 100 days, the first is to set a course. And that means our partnership with our people will be firmed up to a set of reforms. So we will evaluate every ministry in a public participatatory manner, define its objectives, allow for honest, capable people to come to the top. This will allow us to deliver on the promise of good governance. We have promised to transfer 40 of the National Budget to the provinces because our system is centralized. So our provinces do not have fiscal resources on the basis of which to be accountable to the people. The reform of the Security Sector will start in the same 100 days. The office of the commander in chief, that is the third defined function of the president of afghanistan, has not been turned into an office. I will be turning this into an office so that each eight hours, we will have a security report given that security is the number one desire of our people in very concrete ways on the basis of measures and evaluation. Then we have a very busy international calendar. Our first action internationally would be renewing our partnership with the United States by signing the bilateral Security Agreement and by making sure that both the Strategic Partnership agreement and the bilateral Security Agreement are firmly in place. Simultaneously, in these days, 100 days, we will be engaging the region. China has become very interested in the peace process, in this, and also the new chinese president has opened up an initiative, a Major Initiative is that the region, the surrounding neighboring countries, should benefit from chinas development. So seeking these relationships and ensuring that both the region and the world at large sees us moving and moving the stalled engine of government to full speed is going to be sped up during these 100 days, and we very much hope that the public would see the results of its massive participation in terms of accountability to them. Rose i thank you for this time. We look forward to watching the audit. We look forward to the political and economic developments in afghanistan, as you suggested earlier. I very much thank you for the opportunity and to thank the American Public for the engagement. Rose jim chanos is here. Hes president and founder of kynikos associates, the multibilliondlaer Investment Fund specializes in profiting from bets of publicly traded companies to decline in value. He gained prominence on the lucrative wairnlg on the denies of enron. While a housing bubble has yet to occur in chine dispa beijing, it is warned doing business in the city is like doing business on the eve of the financial crisis. You were bearish the last time you saw you. Are you still bearish . We were bearish four years ago. Not much has changed except the credit bubble has gotten bigger. Everything we talked about in 2010 is just basically doubled. When its the amount of credit outstanding in the chinese economy, the amount of vacant real estate. Rose but some people argue that the chinese appreciate the threat of a bubble, and that they are doing more in order to address it than other inactions have. And because of the nature of their political system, they can do it. Well, these same people didnt see it four years ago, and now they believe the authorities have it under control. The problem is that data, and we take it, of course, with a large grain of chinese salt the data just shows that the credit spigot is just completely wide open, and that more and more credit is going to support less and less growth. The chinese economy, based on construction, charlie, is really manufactured growth. The minute you stick a shovel in a ground and put up a building or bridge, that counts as g. D. P. The problem with that model is when you finish building it, you have to put up another one. It is not based on ongoing consumption. This reform that the chinese felt was coming four years ago still is elusive. Rose and many of those buildings are still advocate apt. A lot of them. And a lot of them will not be economic. Rose you have seen an economy that has gone from a g. D. P. From 10, 11 , down to sevenplus percent. We have to color this with the idea that chine is the only major industrialized nation that knows its annual g. D. P. On january 1 of that same year. Rose because . It is what they stay its going to be. Rose they make it what they say its going to be or whatever they say its going to be is what they will report . We have a cartoon in one of our presentations of all of them, seven of them sitting around the table the standing committee. And saying okay the growth is going to be 7. 5 . How do we get there . Rose, of course, i know some corporations that do that, too. I think there are a lot of corporations that do that. Rose clearly theres a lot going for that economy. They have an emerging middle class. They have social tensions. Yup. Rose they are making a serious effort to deal with corruption, a serious effort to clearly a serious effort on corruption. Very much. Rose clearly a serious effort to try to deal with pollution. It is a priority for them. And the third priority, they say, is a sustainable economy. Again. Rose serious people with serious skills. They absolutely are very serious people, and the technocrats in beijing are not to be underestimated. Rose exactly. However, there is a saying in china, the mountains are high and the emperor is far away. And all of the action where the rubber hit the road in china happens at the local level. And thats where the technocrats in beijing, although they can direct things, theres a little bit too much faith thats put in the Central Committee and the planning committees because at the local level, the incentives are still to produce numbers, produce growth at any cost. One other point the anticorruption drive, which is something weve been focusing on for the last year and a half, since ji ping has been in power is actually much more than that. It now appears to us too be a far more serious effort to cleanse the party. And if you look at the peoples daily overnight announcements i mean, there are four or five head shots put up on twitter and on their web site, of people who have been taken away every night. Its almost as if youre seeing a soafstyle 1930s purge through social media. People are falling out of buildings. Im not exaggerating. Rose but i know i mean, i think we know all the prominent people that have been there are a lot of people below that level. Its having an impact on the economy because a large number of things like apartment sales, highend luxury products, were bought with basically dirty money. Rose is there some sense that ji ping is becoming more an authoritarian . I think so. Rose hes consolidating his own personal power. In his own way, in his own personality, he is a lo like putin. Although he is a communist, and part of the communist party, he is a nationalist. I think two years ago, we would have said he will be first among equals. I think its very fair to say now that hes first and that hes going to be much more firm, much more aggressive, and much more muscular in the way he looks at the world. Rose and eliminating opponents. Well, i think thats happening as well. Rose i mean by that not doing away with him, but in a sense, consolidating his power, and those people that might be a challenge to him. Exactly. Rose or not as powerful as they were. Exactly. Rose when you look at both in terms of things that they might want to do, what is it that is essential for them to do if in fact theyre able to deal with this possible bubble . Well, again, navigate, the credit issue will be the issue, and reforming the economy so its less reliant on investment and more reliant on consumption, in a more traditional, developed economy. Rose which is exactly what theyre trying to do. Theyre trying to do, but since you and i sat down four years ago, investment has increased, not decreased. For all the talk and optimism about reform, the results still show in fact its not happening. And thats the troubling part. Rose let me understand. There are a couple of things here. Number one, is it the dramatic shift theyre trying to achieve is going from an export economy to a domestic demand economy and they hope they will have a rising middle class that will enable that and theyll manufacture all these things and that will provide jobs and it goes on and on and on. Youre saying what, you dont think theyll be able to do that within any reasonable amount of time that they might expect to have a deliverance of results . First of all, its much less of an export economy than most people think. Net exports exports minus imports last year of only a couple of percent of g. D. P. This is down from double dinlitz four years ago, five years ago. So this is still basically a bifurcated economy consumption and investment. And theyve got to flip it. Theyve got to flip basically so that ongoing consumption services, so on and so forth are a recurring form of growth as opposed to more projects because ultimately, you end up with enough projects. And thats still the issue that they cannot seem to navigate. Every time the economy slows and i liketo joke that china is the only economy where when growth slows there from 7. 5 to 7. 4, all the stops have to come out. What does that tell us . It tells us that again theyre worried about stall speed. Theyre worried about hitting the brakes, and growth going from a Reality Point of view from 7. 5 to something much, much lower, even though we will will never see that, of course. I think the real challenge looking at china from the outside. Rose you also want to know what their longterm ambitions are. The consolidation power often has a reason you want to consolidate power, and you have a vision of what you want to do. Do we have any sense of what jiping wants to do with china, wants china tow become. Clearly, this administration, or this leadership in china is pursuing a more shall we say muscular strategy externally. Thats new. The dispute with japan. The claims in the south china sea. The american pivot to asia all is sort of, again, bringing forth a more i wont say bellicose but a more firm chinese response than weve seen in previous decades, even. So i think thats something thats new. Or whether its just resurgent nationalism. As any country grows it exerts its power politically and militarily i think remains to be seen but thats a new development. And i think chinas ongoing outreach to other countries, whether the other socalled brick countries or other countries in asia, theyre building very quietly a port facility, for example, through pakistan, with a highspeed rail to get a port on the indian ocean. All these things are new developments and will have major, major implications for our strategists and political leadership. Rose turning the subject to japan. You have said, i think, that the biggest threat to asia is not china but japan. Is that simply because you think japan is shnging the own attitude about its place in the world. What i meant by that is the change in japan is suddenly, i think, becoming a new destabilizing in asia. In asia, yeah. The fact theyre getting to renounce their constitution there seems to be some pullback from that most recently. There is certainly pull back in the country but the leadership is very intent on basically bringing forth a new look japan. That new look japan is scare scaring china, and i think it basically brought two countries that peacefully coexisted for years in the region, back to butting head. And weve seen that in the last few years. Rose whats the role of the u. S. . Clearly, we areoon asian power. Wheeler we have relationships with vietnam and south korea, where we have an alliance as well whats our role . Well, thats a good question because the 64 billion question is what happens if japan and china flash. I dont mean a fullpledged war. I 19 someone miscalculates on the open sea, a boat has sunk what happens . Do we pledge the full faith and support of the u. S. Military behind japan to fulfill our treaty if theres an incident . I dont know. A lot of strategists feel we wont. Will we send american boys in harms way over that . Again, i dont know. This is a new calculus that we havent had to worry about, but in fact our alliances in the pacific are very much open and active, and with with whats going on with china and others, i think the Obama Administration is right to consider the need to refocus on asia. Rose but has that pivot taken place . Not practically. Weve opened some bases and moved some marine units and, of course, strengthened ties with countries like vietnam, and reopened and strengthened some ties with the philippines. But this is also the early moves in a chess game. Rose do you teach financial fraud at yale . I teach the history of financial fraud, not how to commit it. Rose no, i know. I do. Rose how did that come about . It came about a number of years another i was joking with rick levin, the president , my fantasy was to go back and get my doctorate in history. And he joked, its interesting you should say that because we have something we want to talk to you about. And they asked if id be interested in teachath yale school of minimum. So i jumped at that chance. Its one of the best things ive ever done. Rose why is that . Well, the ability to actually teach graduate students a framework about thinking about corporate wrongdoing, which goes back as long as there have been corporations. We start the chorus its really a history class back in the late 17th century. The first ipo meeting in england. When you teach the frameworks as well as the cases and the wonderful rogues that you come across, you begin to realize Bernie Madoff was just one in a long timeline and this has been going on for 500 years. Rose the frooct cry you would hear after 2008 is nobody has gone to jail. We had people going to jail for Insider Trading, although the most recent case came back with an acquittal. Should there have been more people indicted . Well, personally, i think so. But we know now with what lanny Brewer Justice and attorney general holder has said that in fact the Justice Department took in economic factors and financial factors in deciding whether or not to prosecute individuals. And theyre on the record saying that. Thats in my view a very questionable form of justice in this country that if you in fact work for a too big to fail institution that in fact you can get away with all kind of criminality that the average person couldnt. And i think it still to this day rankles most people in the United States to an amount i think that the sort of cortorfrom boston to washington doesnt appreciate. Rose in other words, people who live in the corridor dont appreciate the fact that a lot of people across the country believe there was an unfairness about what was necessary to do in order to yeah, and that theres a twotrack system of justice in this country. If you hook at the response in the 30s, and even in the response in the savings and loan crise in the 80s, as well as what president bush did postenron to clean up the markets. There was a firm response, and there was aggressive use of the Justice Department to ferret out wrongdoing. That is not what weve seen. Weve seen Insider Trading cases, which are important, but its not policy is there exactly, and its not central to the company. This is individuals taking advantage of information, central fraud on the part of the country in terms of their own accounting. To take it to its logical and horrible extreme, i pointed out you almost get to a point if youre the Management Team or a board of a significantly large financial institution, and you know that by and large, the only penalty you might face is just simply financial fines, you might have a fiduciary duty to skito the line or cross the line in you think the cost benefits are worth it, and thats a scary thought. Rose i was at a Conference Last Week where several people made the case for bit coins. Do you believe thats going to have a prominent place . Well, i dont buy gold, and if i was to worry about another currency outside the realm of governments which is what bit coins is being as old as i am i think i would prefer gold or diamond or Something Like that to a digital currency. Deep down im worried about the idea that jeepuouses that developed the algorithms, to create mined bit coins might have a backdoor that you dont know about. Rose thank you. On the next charlie rose a conversation with artist jeff koons. Its been nice for me to look at some of the images. I dont live with all those pieces, so a lot of them are kind of just fresh to me again. Rose owned by collectors. Owned by collectors, and i tend to live with other art, art by other artists. Im in my studio all day long, im around my work, so i dont live directly with my work. But it shows to me that its been its been fun. I think ive been doing exactly what ive been wanting to do. And it makes me feel more ambitious. I mean, i really would like to do something. I really want to put something on the table. And i think ive been having a dialogue, but i want to do more. Rose is it a thing or is it just simply many things . In other words, are you waiting . Are you inspired . Do you have something that has been there that you just cant wait to get on with the creation and you know what it is . Yeah. Its its to exercise the freedom that we have for gesture, to, you know, experience the kind of the greatest amount of enlightenment that we can, and to do the things that know what i really want to do in life. And to do it. The things that you really want to do are the hardest things to do. Rose but havent you been doing what you really want to do for a while . Ive been trying. But i think you can get better at it. You can get freer at it. You can give yourself more freedom. I think picasso gave himself the most amount of freedom, you know, when he was 88, qiep, 90 years of of age. I mean, its astounding how much freedom that he gave himself. Captioning sponsored by Rose Communications captioned by Media Access Group at wgbh access. Wgbh. Org rose additional funding provided by and by bloomberg. A provider of multimedia news and Information Services worldwide. Man its like holy mother of comfort food. Ion. Woman throw it down. Its noodle crack. Woman you have to be ready for the heart attack on a platter. Man okay, im the bacon guy. Man oh, i just did a jig every time i dipped into it. Man 2 it just completely blew my mind. Woman it felt like i had a mouthful of raw vegetables and dry dough. Sbrocco oh, please. I want the Dessert First [ laughs ] i told him he had to wait