tv Charlie Rose PBS November 17, 2010 11:00pm-12:00am EST
>> charlie: : welcome to our program. tonight joe nocera and bethany maclaine lay out the narrative of how we got to the economic crisis we just went through. >> much of what goldman did in getting out and understanding they had a problem and earlier than anybody else and kind of getting out so they were whole i think they did a lot of things they should be ashamed of. >> charlie: well, list them. >> primarily this is a firm who's first core principle is our clients come first. our clients' interest come first. guess what, they took full advantage of their clients to shove lousy securities down their throats and basically did
not tell them what they thought of the securities and they did so knowing knowing they're whole goal was to reduce their exposure to risk and lay it off on their own clients. do i think that's wrong morally wrong, yes i do. >> i think it was ethically wrong of wall street to buy up mortgages, package them up and sell them off to investors saying they were doing due diligence saying they were investigating the mortgages that were as build when in truth they weren't. i think that's a problem. i think it was wrong of mortgage brokers to people to encourage people to lie on their applications so they could get mortgages. and i think it was questionable for regulators in d.c. to look the other way as they heard story after story in the mid-1990s that people were getting loans they couldn't pay
back. >> and start with jimmy wells on the anniversary of wikipedia. >> we keep the servers running, communications legal. all the infrastructure. >> charlie: why did you do it that way? >> partly a product of history. where we came from in the early days. we're a child of the dot com crash. there was no investment money just a group of people on the internet trying to do something cool. lots of volunteers wanted to put it in the non-profit and make sense to me and proud of it as a non-profit i feel when people look back on this era they'll say that wikipedia was remarkable. >> charlie: jimmy wells, bethany mcclain and joe nocera.
maybe you want school kids to have more exposure to the arts. maybe you want to provide meals for the needy. or maybe you want to help when the unexpected happens. whatever you want to do, members project from american express can help you take the first step. vote, volunteer, or donate for the causes you believe in at membersproject.com. take charge of making a difference. captioning sponsored by rose communications from our studios in new york city, this is charlie rose.
>> charlie: the financial chris that is paralyzed credit market is widely understood as an isolated event few saw coming. books have tried to understand what happened and the latest is called "all the devils are here." it traced the worse collapse since the depression. i'm pleased to have joe nocera and bethany mcclain. welcome. you two worked together for how many years at fortune magazine? >> over ten. >> charlie: is that the foundation for writing this book together? >> it really is. that and the fact that he edited the book i coauthored about
enron and we have a great rapport working together and we keep each other's spirits up and work well together. >> charlie: what is it about that joe, what makes two people work together each who have they're own identity on a common theme. >> well, she's smarter than i am. >> charlie: good. >> that helps. we both know what each other's strength and weaknesses are. she is so good at smoking things out and reporting and analyzing it, understanding -- it took me so much longer to understand how a synthetic ceo operates -- >> charlie: do you understand that? if it took you a long time it's going to take me years. >> i'm a better synthesizer of information and i would say most of the editing. bethany did two-thirds of the first drafts and we talk four or five times a day and understand where each other's coming from
and when we have a hard time we help each other. >> when i turn in the first draft he can say it's terrible and i can say okay i have to do again. that makes the relationship work. >> charlie: you both edit each other. >> absolutely. >> charlie: how did you get over the hump that said one more book about the financial collapse we do not need? >> we had tough moments. we really did. there were great books written about the financial crisis and had great moments of self-doubt but the book we wanted to write we knew were different. >> charlie: how was it different? >> we wanted to tell the story of what created the financial crisis not how it unfolded and the players at center as the collapse happened but what created the con flagation in the
first place. >> this is not about what happened that weekend in september 2008. we end before that. we start 30 yearyears earlier. we are saying all the various things that had to happen. all the regulatory mistakes and the mistakes on wall street and how they came together and interacted to create this basically disaster. >> charlie: where did it begin? >> well, we start -- >> we start with the invention the modern invention of mor mortgage-backed securities the moment when wall street and the government come together to create a new market for mortgage-backed securities and it starts with the best of intentions increasing the capital for homeownership and becomes something that endsed in the worst possible and ring bri
the ratings agencies and in the beginning they were involved in making it possible and fannie mae and freddie mack. >> charlie: how were they responsible? >> the governments and the rating agencies because built into the law enabling the mortgage backeds market was the dependence on rating and had to be given a rating by a recognized credit rating companies and the dependence on the rating agencies was caused by the government. and then over time you had the rating agencies that were publicly traded companies with the bottom line they wanted to get better and executive has it wanted bonuses that saw the money that could be made by rating them and giving them triple-a rating and it became a classic race to the bottom in the rating agencies. >> charlie: so the people that created these mortgage-backed securities, who were they?
>> one was lou eneri immortalized at the time by michael louis. he's one of the central characters and another is one of the most important figures in modern financial, larry fink who played such an important role in helping the government unravel some of the these toxic securities. and then we also say that david maxwell who was the man who saved fannie mae at a time when it was basically on the verge of imploding itself as a third major figure because what people don't quite understand is the creation of this market though it's viewed as a wall street market could not have happened without the support of the government and fannie mae and to a lesser extent freddie mack. >> charlie: how did they do it the government and fannie mae and freddie mac. >> they always had enough power
basically as primary guarantors of mortgage debt to in effect -- if you couldn't do this together as then the market wasn't going to work because fannie mae and freddie mac couldn't allow and it and wall street needed them because investors wanted that guarantee. as much as wall street didn't want the government entities involved they had to have them and the great irony is one of the reasons the subprime business became so big is because wall street was looking for a way, always, to create a securitized market and they wanted wall street to very the market by itself. having said that she is the world's greatest expert on fannie and freddie.
>> s n not the world's greatest effort. >> charlie: not on your tomb stone. fink did what? >> fink at that time was at first boston and ranieri was at solomon brothers and they were instrumental in creating mortgage-backed securities. >> charlie: these are smart financial people. >> they figured out how to package up mortgages and turn them into security has it investors around the world would invest in and there's all kinds of complexity has it make it difficult for investors and you had to find a way to make them simple and packaging them up and turning them into securities is how it was done and turned the mortgage market from the small localized market where if your local bank was willing to give you a mar mort gam a mortgage.
and it turned into a bank in china could get you a loan. it turned out to be an important point. >> charlie: because? >> one of the things that changed in america once you had mortgage-backed securities is the link between the barrower and lender was cut. the lender didn't have to care any more whether the barrower could pay the money back. he shipped the risk and then wall street didn't really care whether the barrower could pay it back because he was selling securities to investors and so the whole idea that the bank worried that you were going to pay the loan back which is the basis of barrowing. it's the basis of finance. it's been part of the way the world works for hundreds of years was broken and it changed the way people thought. >> charlie: go ahead.
>> and people saw that coming at the time. people worried at the dawn of -- they were worried that the very product will destroyed at its core. >> charlie: what about people at the time the secretary of treasury and larry summers and people at the fed. did they have a sense it was coming. >> rubin and greenspan is like a decade later. no, nobody had any sense -- what happened by then is you have this burgeoning market and the proliferation of derivatives and what you have in the 90s is the beginning of a push by some people to say they're dangerous
and ought to be regulated. something needs to be done other than just letting them go untrammeled in the market place. >> charlie: why didn't those people listen to those people? >> i think one is this ideology about modern finance that innovation is good and we shouldn't do anything that would stymie it. >> charlie: and the market is always right. >> and those two things combined plus lobbying money from the financial industry and it's implicit because everybody thinks the same way and explicit because there was money changing hands. >> charlie: so what happened when somebody knew what they had to lose knew what pay mess they were in. you talk about merril lynch and stan o'neal. >> they didn't understand what a mess they were in until very very late as was true of almost all wall street institutions.
>> charlie: so there is an issue there. all of a sudden you trace this thing and the development of mortgage-backed securities and derif derivatives are there and people said no, there's too much money to be made and we're not going to listen something you called goldman envy. everybody said look how much those guys are making. we want to be just like that because we'd like to make that kind of money ourselves. >> but they didn't know how to do it. because they weren't as smart as goldman. ? >> and goldman recognized at some point the danger and reduced their risk. >> they did in ways some would say took advantage of their clients and wasn't particularly seamly but what happened is a machine got used on wall street that used subprime loans as their fodder and once this
machinery nobody could stop is it and a place like merril lynch what happened the last year before merril lynch realized it was in trouble was the mortgage department with these new people in charge of it they couldn't sell the triple-a securities any more. nobody wanted to buy them any more. they were saturated. >> charlie: they wanted a bottom because they had all their capital allocate order wanted to buy them because -- >> some people didn't want to buy them any more because they started to get nervous. aig stopped insuring them. >> charlie: why? >> aig figured out there was a problem. they knew. >> charlie: was this when hank greenberg was there had he was gone. some argue he would have recognized the risk and done something because he was an obsessive manager. >> we'll never know the answer to that. what is true is that aig smoked out there were problems with the
securities they were insuring quite early. they stopped insuring them but what they didn't do was hedge their risk. in other words, the risk they held they just kept. >> charlie: paid some of it with counter parties. >> none. not until it was way way too late. they were very -- >> charlie: asleep. >> yeah. very asleep. meanwhile so merrill lynch -- >> charlie: because they were making money. >> has it machine going and don't want it to stop and put triple-as on their own books and they built an exposure from $5 billion to close to $50 billion in the space of the year without any top executives realizing what was going on. that is astonishing. >> charlie: all this risk exposure was going and people at the top at citigroup or anywhere
morgan stanley did not know how much they were in for if something would go wrong? they had no idea of their exposure so therefore when they had meetings nobody said you can't do this because you understand the risk we're taking. th nobody said that. >> it's a mixture of self delusion, because people didn't want to see what would have been in front of them the other part of the story is the development on wall street of ris risk management tools where they could say our management tools say there's no risk there. >> charlie: why would they say that? >> because the securities were rated triple an and there's a great line in the book that saying wall street is quantitatively illliterate they're not capable of look at the numbers looking at the models they're spit outing make
sense. >> charlie: had they lost favor because of this or rating an against lost favor. >> the ratings have lost favor. nobody trusts them any more. the risk models are still around because so much of modern financial is built around they will. >> charlie: financial engineering and capitals at banks. nobody has a different model. the same physicist who said what bethany just said also said that's best line in the book i set at merril lynch saying we fell for our own scam. that's how he describes the notion of purchasing the triple as. >> charlie: he knew it was a scam. >> we weren't as smart as we thought we were. >> charlie: tell me about the meeting between stan o'neal and who played a leading role in risk management and calls him into his office. >> stan finally realizes, stan o'neal the ceo of merril lynch
finally realizes he has a problem and told by his mortgage guys it's a billion or so and hears this fella named john bright who's a risk manager basically shoved into a broom closet because they don't want him around -- >> charlie: they don't want to hear from him. >> they don't want somebody saying you guys are taking too much risk. he's been exiled to the broom closet. stan has no idea he's been exiled. he has no idea and calls him up and says i hear you have a different number and come up and talk to me and a bizarre meeting where two guys that have known each other quite a while have a meeting where john bright said my back of the envelope calculation and i haven't done the hard stuff is $6 billion and o'neal says well, how can this
be. and he says simple. triple-a wasn't a triple-a and he said why didn't our risk people catch this and o'neal is completely baffled that this is the state of affairs and -- >> charlie: i thought the exposure was way over that in the end. >> it was but he did a quick calculation and he says i won't be around. i said i don't think i'll be around much longer. >> charlie: does that mean the people like stan o'neal who i know and like and i say that simply because it's somebody i've met just didn't get the risk exposure rather than they were doing something that was incompetent. >> you can look at that in a couple of differenc different w.
there's a ton more incompetence in the financial industry than you would believe and the paychecks aren't right with the competence. >> stan did walk off with $160 million. >> charlie: because it was in his contract. that was his employment contract. >> right. >> charlie: so you chronicled enron. >> yep. >> charlie: similarities. >> i think in some ways enron was the canary in the gold mine and we all remember the heart of enron's fraud is where the vehicles called structure investment vehicles to a little more complex the rating agencies. they were wrong about enron and
in the wake of enron theres with a flurries of congress and what to do about the rating agencies and nothing happened and they went on to be at the heart of the financial crisis and the story is human nature. in the end the enron story is a story about people and a story about the complex mingling of this self-delusion and corruption and the story we tell is about a cast of characters and a range of fatal flaws. >> charlie: the flaw of greed or more? >> it's a mixture. it's a flaw of greed. it's a flaw of self-delusion and flaw of sometimes outright greed. everybody's incentive was to get paid. >> charlie: but greed not illlegal. >> no, it's not. >> and why you haven't seen many prosecutions coming out of the financial crisis. there is a difference between
what most of us perceive as ethically wrong, greed, self delusion and criminality. >> charlie: point out what was wrong. >> i think it was ethically wrong of wall street to buy up mortgages, package them off and sell them to investors saying they were doing due diligence and investing the mortgages they were as build and weren't and wrong by mortgage brokers to make loans to people to sell mortgages they knew they couldn't pay back and lie and it was unethical -- questionable for regulators in dc to look the other way after hearing story after story in the mid-90s people were getting loans they couldn't pay back. >> charlie: was it wrong to bet against your complaints clients?
>> i think so. i think much of what goldman did in getting out and understanding they had a problem and earlier than anybody else and getting out so they were whole by the time the financial crisis took place i think they did a lot of things they should be ashamed of. >> charlie: well, list them. >> primarily this is a firm that whose first core principle is our clients' interests come first. guess what they did not -- they took full advantage of their clients to shove lousy securities down their throats and basically did not tell them what they thought of these securities and they did so knowing that they're whole goal was to reduce their composure to risk and lay it off on their own clients. do i think that's morally wrong,
yes i do. >> charlie: they would argue they're making marks. >> they would until they're blue in the face and we document it in the way they deal with aig and our recounting of the structures that their behavior was if nothing else unseemly. >> charlie: and do you have a case here in which the government did not do their role all along, the s.e.c. and everybody else and when it came time to negotiate, the negotiation wasn't there. >> i think that's unquestionable. one of the things -- there were many surprises to me in working in the book and the most surprising is going back to the 1990s and finding consumer advocates were warning that subprime loans were a huge problem and people were getting loans they couldn't pay back and in the face of this the federal regulators did justbout nothing.
>> charlie: give us the heroes. who were the people warning them? >> consumer advocates from groups in cleveland to groups in california including the california reinvestment coalition and groups of consumer advocates across the country going to congress knocking on doors and saying this is a problem. >> charlie: who understood it are john paul. they understood it. >> the consumer advocates understood it. >> charlie: and they in part led them to it. >> you hear the word consumer advocates and people think they're a bunch of liberal and partly why people like allen greenspan didn't list then to them and bethany had great insight as we were working on the book which is it doesn't matter really in the end whether it's subprime lenders making pretttory loans or whether it's barrowers trying to take advantage of the lenders to get money they can't afford. all that matters is thousands
and millions of americans were getting money they could never pay back. who cares who's at fault? is that a systemic problem and cause this country a heap of trouble? and guess what, it did. >> charlie: what do you say and how do you assess that. people were of their own knowledge making commitments beyond their means to pay back. they should have understand that but they went ahead and they were encouraged by other people to do that. so on the one hand you have people who should have known better on the other hand you have people who should have known better who were encouraging them to do it. >> i sympathize with that question. i have a huge belief in personal responsibility. another shocking moment for me in the book was finding internal books at washington mutual on how to convince consumers to take out an option-adjustable rate mortgage instead and
somebody who said i want to pay my mortgage back and taking in a newer products and you tell them prices only go up and then could then turn around and sell the loans to wall street for mory and than the fixed-rate mortgages. i believe in personal responsibility. it's at the core of life. on the other hand when financial institutions have no shame and scruples should it be all on people to defend themselves. shouldn't it be a mixture of responsibility. >> charlie: now we have financial reform. all this is taken care of, it will never happen again? >> ha! the frank bill is well meaning but does some good things but so much is still for regulators to write the regulations. so much is a wish list of regulations. >> charlie: they acknowledge that. >> sure.
>> charlie: they said look we couldn't get into all that stuff ourselves. >> i knew that but now we have republicans have the house and part of what they're going to try to do is make sure those regulations are as minimal as possible and still don't know how transparent a derivative is going to be. >> charlie: we want transparency and a clearing house. >> and how much power is the consumer protection agency going to be. >> there's a big difference between regulation and good regulation. and in the end the people who say all that was necessary to prevent this was already in the power of regulators, they've got a point. there's a difference between -- >> charlie: it was enforcement was the question. knowledge and enforcement. >> and ability. a reg later has to be able to spot the problem and have the willingness to do something about it. are those things that were in
short supply during the process in place now? i don't know. >> charlie: the boker rules. >> i think it's irrelevant because goldman will tell you 90% of the trades prior to the rule were done quote, unquote on behalf of clients and people think they're a huge pr propriey trading. >> so much of their business is helping a client do a trade and goldman has to trade around that position in order to mitigate its own risk or make money for its own account. or making money for its own account. the idea there's a clear line between proprietary trading there's a big fight about the blurry space about when a firm
that's getting in the market to satisfy a client can do once they're in the market. >> charlie: once we talk about risk and risk management and all that had to do with leverage. it had to do with capital requirements and all that. has that been changed in a way that therefore people think more about risk and they cannot take those risks unless they have more capital in place. >> that is in process. >> charlie: that's good? >> absolutely. you would solve a lot of problems -- >> charlie: some good things have come from this, yes? >> yes. you would solve more with stricter requirements. >> charlie: that was a bigger issue than some separation of activities? >> i basically agree with that. >> i do, absolutely. >> charlie: there was too much leverage in the system. >> when things went bad there was not enough capital.
>> charlie: and with short selling you're in trouble. >> i don't think short selling had anything to do with it and when everybody got in trouble i don't think short selling had a darn thing to do with it. were they in trouble with short-sellers or because people were worried about their capital after watching all the capital get locked up in lehman. >> charlie: do you agree? >> i have pictures of short-sellers with knives at the executives throats and maybe then i'll see short-sellers are to blame. i firmly believe in the role of skeptics in the market place. and short-sellers are sceptics. i think if we had listened to skeptics in this crisis and with
enron i think the crisis would have been mitigated if not averted. >> charlie: now was anybody saying when the short-sales were making the points and paulson was there was anybody saying oh, boy, he's just stupid >> people were saying that. there was such incentive in keeping the machine going. >> charlie: jop paul not henri paul. >> and the belief in the sanctity in the rating and saying they can't be wrong. >> charlie: so go back to this wherever this 30--year period took place and you're saying if the rating agencies had done their job we would wouldn't have had the problem. >> going back 30 years i agree. >> charlie: going back 15 years? >> i agree with that. >> charlie: 15 years is '95. >> the greatest volume of buyers in the world are buyers in search of triple-a and triple-a
paper and do the least amount of work because by definition they're the ones least capable of doing the work so by stamping the paper with triple-a they guaranteed if there was a problem it would be a big problem. >> charlie: foreclosures. the government seems to believe, secretary of the treasury should go forward. >> they're mad at me for making that point in print and backed their fists on the table that it's not true that they want to help people. >> charlie: they were on the program addressing that issue. >> i'm glad. i'm off the hook. there's a core belief that you're not going to get price stability until the wave of foreclosures are done. and the problem for the people who believe that is that the
banks have now been caught red-handed doing things they shouldn't be doing like this robo signing scandal and it's given lawyers a lot of leverage to go in and say stop -- you can't foreclose on this house until you prove you have the right to do it. >> charlie: and your argument is the state attorney general has the case. >> this is exactly what state attorney generals are supposed to be doing and further i have no sympathy for the banks on this. i hate to sound like such a hard guy but due process is supposed to be at the core of the american judicial system and if they feel they can go over due process and get away with it that's a bad thing for the country. >> charlie: what should banks be doing >> they don't want to do it
because they take hits. look, the bank -- i think one of the things we document in all the devils are here is the extent to where the mortgage industry persuaded people to buy houses they couldn't afford. and now they're saying fine, we'll take them away. something's not right. >> charlie: some barometer in you says this is not quite fair. >> that's how i feel about it. yes. >> charlie: what about the bailout of general motors now that they're facing an ipo. >> well, there's a big argument that not just the bailout of general motors and tarp that it all worked. people paid back the money. everything's fine. how can people across the country be so mad when we got all the money back. >> charlie: but unemployment is at 9.6.
>> and the thing it misses the havoc it wreaked on the country in the form of unemployment and the necessity of low interest rates have wreaked on the country in terms of the returns savers are earning on their savings and the weakness of the u.s. dollar and potential repercussions in terms of inflation and the thing that's all cost-free and worked out in the end, i think it's an enormous fallacy. >> charlie: having access to the people you have acces access to think there's a long time in getting back to 2006, 2007. >> it's i in disputable and peoe want to say to was about putting people in their homes and it was about allowing people to use
their homes as piggy banks by refinancing. if they hadn't done that than consumer spending wouldn't have been what it was for a long time. >> charlie: because we were a consumption and spending society. >> and spending beyond our means. >> charlie: we couldn't have done that unless somebody was willing to take your debt. >> there's a new normal and it's not 2006 and 2007. >> charlie: all the devils are here the hidden secret of the financial crisis. have a movie in thiin this? >> i don't know whether to say i i hope so or hope not. >> >> >> charlie: so listen, of all the things you've written the one that i just jumped at me -- you don't just write about
finance or education and whatever strikes your fancy. my impression at the new york times is just write. so you -- somebody, tell me the story of the column you wrote because i asked you to read part of it. >> i -- >> charlie: who he is. >> he's one of the great russian oligarchs that was jailed by putin and his goons, if i could be so bold, and spent the last seven years in jail. >> charlie: not just end jail but siberia. >> that's right. as he and his partner were preparing to be eligible for parole new charges were brought to help get them another 15 or 16 years in siberia and -- you know, it's one of these things. i've had it in the back of my mind and knew about but never really focussed on it or thought about it and at the end much his
year and a half trial which was earlier this month i got an unsolicited e-mail from some committee that sport supports ht just had a closing statement at his trial and i was moved to investigate more deeply and to write a column about his plight and also about what that said about the rule of law in russia and about how one man has really turned himself, i think, into a heroic figure standing up for democracy and the rule of law in a country that's seeing less and less of it every day. that was the genesis of that column. >> charlie: characterize it as how you feel about columns you've written. >> i've been writing this column in the new york times every week for the last five years and thought it was the most important column i've written in five years because if shined a
light on something that needed to be shined on and it is the new york times. it has megaphone and i want people to be aroused and woken up about his plight and what's happening with the rule of law in russia and i'm hoping our government and other important figures will get involved. >> charlie: could he -- does he, is he another saccarov? >> i think he's a heroic figure but i've been surprised in the letters i've gotten in the aftermath to the extent people are not saying he's a heroic figure and made his billions in unseemly ways. i say a augustin was a sinner before he was a saint.
he was a billionaire and his come was taken way and the paragraph that hit me hard was when he said i am not a perfect person but i am a person with an idea. for me as for anybody it is hard to live in jail and i do not want to do there but if i have to i will. the things i believe in are worth dying there. that's powerful. >> charlie: the book is called all devils are here, the hidden history of the financial crisis. bethany mclean and joe nocera. thank you. on the next charlie rose, russel crowe on the new film "the next three days" and the craft of acting. >> i like to know we'll start on time and finish on time. >> charlie: are you prompt? you're always there? you're there and ready to roll? >> i work the way the director works. if the director shows me in the
first week he's not capable of beginning at 8:00 in the morning then you know i'll like, you know, because otherwise you create a strange tension you know. if somebody's regularly half an hour 45 minutes later than the game that said i work towards that and one thing that's soul destroying as an actor for me is sitting and waiting. >> charlie: wikipedia bills itself as an free encyclopedia that anyone can edit. there are more than 90,000 active contributors. the company announced last month plans for an office in india. its first outside the united states. i'm pleased to have him back.
>> january 15th, 10th anniversary. >> charlie: how is what it is different from what you imagined it to be. >> before i started wikipedia i had a previous project that was top down and very controlled and we've stayed true to the basic vision and well, it's bigger than i ever imagined it would be. >> charlie: where you do you see it going? >> for us the big in the is opening an office in india. the first time outside the u.s. and focussed on the languages in the developing world and all the european languages. big in chinese and japanese and hindi. >> charlie: what's the biggest complaint about wikipedia? >> the biggest complaint is we're not sure if it's accurate or not. that's the real question. >> charlie: early on there were
things that were wrong. >> there's always going to be things that are wrong in every reference work. we want to make it as good as it can be. sometimes i think we do ourselves some damage because we tell you the following session doesn't site source or the neutrality of this has been indispute and you can go to our article, called criticism of wikipedia. >> charlie: what's the difference between that and the foundation. >> that's the charity i set up. we're a 501c3 foundation and we keep the servers running, communications legal. the infrastructure. >> charlie: why did you do it that way? >> partly a product of history. where we came from in the early days. we're a child of the dot com crash. there was no investment money. just a group of people on the internet trying to do something
cool. lots of volunteers wanted to put it as a non-profit. and i'm proud of it when people look back 200 years on the era they'll say that wikipedia was remarkable. >> charlie: you continue to raise money rather than get other resources. >> because we're a charity we don't run advertising. we don't want to and mostly exist from donations. every year we run a campaign and this year they slapped my face all over the site so i'm getting a lot of people saying stop staring at me but it's all part of what we're trying to accomplish. >> charlie: what's the relationship with the british museum. >> we did a project and had a volunteer go and work with them and then it's wicki loves art to do high quality photographs and get high quality information from museum curators.
it's a change for us. we used to have a bit of an adversarial relationship with museums. >> charlie: they're not credible like we are is their attitude. >> and lots of museums used to think we don't want pictures of our art on the web and then no one will come. they find having an article brings people in. >> charlie: i love it because it's such an instant and quick reference for people that reads like i do and i can go to wikipedia and give me and my complaint is not as easy to read because it's annotated so much. give me a nice complete reading. why is that? why can't you do that? >> what we want to do is have good footnotes. that's important so when people say how do i know it's true. our policy is we want everything to be footnoted. where's the reference.
we want to be transparent so people can find out. >> charlie: and do that and present another one where we can read the clean version. in terms of social media give me your own sense of the explosion of social media from you and facebook and everything else. what is going to be its near and long-term impact? >> well, i will think there's a lot of different ramifications to that. i think one thing that's beneficial is the world is smaller and people are connecting across continents. you begin to understand the humanity of other people around the world rather than thinking them of others. it's got to be good for peace and people having an understanding of others. i think there's still a lot of innovation that's going to happen. facebook is very young. we're not as young any more but
still fairly new and i think we haven't seen the end of what communities can come together to create. >> charlie: here's what's true about facebook you can clearly see there an ambition to play a larger role. they announced they're going to get into e-mails. their going to call them something else not to be an e-mail killer but providing an alternative they think will be bigger and better. >> yeah, well -- >> charlie: what do you think of that? >> i think it's interesting having not seen enough -- >> charlie: interesting is not be an opinion. >> it is an opinion. i'm interested in what they're doing. one problem with e-mail is spam and you get junk mail and the nice thing about facebook is everybody's identified and there's a way to identify if people are spammers are not and it's interesting when you talk to young people these days they
hardly use e-mail. it's a dinosaur thing to some extent. it's remarkable. >> charlie: what happened? how did they come to that? >> i think they're using facebook to communicate with friends and using instant messenger to chat and e-mail didn't seem useful. i use e-mail. i'm a dinosaur and the thing with facebook messaging i can move towards doing that more and more offline. >> charlie: being able to do it offline. >> because i travel so much. >> charlie: what about wicki leaks. >> that's very interesting. it's that an opinion? >> charlie: same answer. have they gone too far you think? >> i have mixed feelings about wickileaks first thing i should say is i think it's an important feature of any open society
there's an opportunity for people who have information about wrong-doing to come forward with that information though they're at risk of getting in trouble. fine, that's perfectly good. at the same time i think if i had some information i think the last thing i would ever do with it is send to to wikileaks or a responsible organization because the concern i have is the same concern that's been expressed by amnesty international and are you putting people at risk that are not the wrong-doers. people may be named that can be interpreted as wrong doers and killed by the taliban. >> charlie: do you know them? >> a little bit through e-mail. >> charlie: what do you do two
e-mail about. >> this and that. >> charlie: what do you e-mail about? >> the domain name. >> charlie: in other words, you weren't happy he used wikileaks? >> in the early days when it was announced as the wikipedia of secrets. we didn't know what was going and we said don't use the name wikipedia and we transferred the domains to him and the technical transfer hasn't been completed and it's complicate and boring. >> charlie: if you wanted to could you have stopped them from using the domain name? >> no, because wiki is a ge genc term. we have control over wikipedia but wiki whatever is generic. i'm not sure we want to stop
him. i think it's been a little uncomfortable there's been confusion in the public eye we have something to do with each other and i have some criticism i think they should be more careful. i think they need to be slower about what they're releasing. >> charlie: will wikipedia ever become a for profit company? >> asking like the red cross good brand name maybe you should turn it into a for profit. we consider ourselves to be part of the infrastructure a humanitarian project and we won't change a thing. >> charlie: thank you for coming. jimmy wells of wikipedia. captioning sponsored by rose communications captioned by media access group at wgbh access.wgbh.org