tv Charlie Rose PBS March 28, 2013 11:00pm-12:00am PDT
>> corporate contributions to our treasury in the form of taxes is at an all-time low and it's only 9% now of the revenues coming into the treasury-- treasury come from corporations. a few years back it was double that. a few years before that it was triple that, it used to be, many years ago that half of the tax revenues that came to wasngton came from corporations. now it's down to 9% of our revenues. and in large measure it's because of the kind of deductions and loopholes which are used, some of which are perfectly legitimate because they've performed an economic function, some of which are not. >> rose: we conclude this evening with a conversation with a 17-year-old who just sold his company to yahoo! for what some people believe is $30 million. his name is nick d'aloisio. >> at the end of the phone call they're like how can we arrange meetings. i think they are like we want to do a phone call at 11 a.m. this had been a night mire. i said i can't do 11 a.m. i said why can't you step
out of the office. i said well, i'm at school. and they're like what, college, or post grad. and i'm like no, high school. >> and what, final year. >> no, 10th grade, 9th grade. which was weird. >> carl levin and nick d'aloisio, when we continue. funding for charlry rose was provided by the following:
captioning sponsored by rose communications from our studios in new york city, this is charlie rose. . >> rose: carl levin is the longest serving senator in michigan's history. earlier this month he announced we not run for re-election. i want to talk to him today about his thoughts of being in the senate for as long as he has been in the senate. talk about the issues that he wants to focus on for the next two years and get a sense of the history that he has lived. senato, welcome. >> charlie, great to be with you. >> let me start with your remarks as you said. i can best serve my state and nation by concentrating on the challenging issues i'm in a position to help address in the next two years, by doing my job without the distraction of campaigning for re-election. tell me what you hope to accomplish in the next two years before we look back at what you have accomplished? >> i want to focus on what i think is the greatest
challenge we have, which is how to get the two major parties to work togher here in washington to overcome this casm, this gulf that exists, where we've been unable to avoid these cliffs. these cliffs that just seem to come up every month or every two months, where unless we do something we're going to fall over the cliff economically. i think it creates huge instability in the country, both economically and psychologically. and we've got to find ways that we can get democrats and republicans to compromise. ound here recently, particularly with some of the new tea party folks that have come in here, compromise is a dirty word. you can't even get the republican leader in the house to basically get his own caucus to go along with his own leadership so that he could work out a compromise with the president or with us. so more and more i think
it's going to be up to the senate to have democrats and republicans figure out a way here that we can address these economic challenges that we face to do the deficit reduction in a way that does not make it difficult to come out of the recession. >> rose: do you think these presidential dinners have made a difference? >> i think they can make a difference. providing people go into it with a determination to find solutions. but the bottom line, i believe, is that in order to address the deficit situation that we have at the same time, we stimulate a recovery, we're going to have to do the deficit reduction in a comprehensive, in a balanced way. the word that we use here freqntly. and th means that three parts are going to have to all be there together. you're going to have to have some targeted spending cuts. not the kind that we had during the so-called sequestration fiasco but
targeted, prioritized, spending. you're going to have to do something on entitlement reformment and here's where the republicans are so far being unwilling to add any part of the third piece which is additional revenues. that's where i think i can make a contribution, charlie. because i'm chairman of this permanent subcommittee on investigations, which has looked into the lost revenues to thisountry by the way in which tax gimmicks are used, particularly by corporations to avoid paying taxes. and the way in which these offshore tax havens are used to avoid paying taxes. we've investigated that. there's a lot of revenue there that longs to the u.s. treasury and i think we can really make a contribution to the overall balanced solution by focusing on these lost revenues. >> let me stay on that issue for a second. many people propose that if we eliminate these corporate deductions and some of the things you're talking about, it will even be possible to lower corporate rates. do you agree with that?
>> it may be possible to lower corporate rates. but the revenues which are lost through the use of these egregious tax loopholes, i'm not talking about normal tax deductions which are used by corporations, accelerated depreciation or things that have some legitimate economic purpose, i'm talking about the egregious kind of loopholes which are used. these tax gimmicks which are created to avoid paying taxes where there is no economic purpose. you know, shipping your revenues to the caymans or other tax havens to avoid paying taxes to uncle sam does not serve an economic purpose. you're not producing something more. you're not providing a service or you're not providing something which people can use. it's purely a tax avoidance scheme to shift the intellectual property, for instance, which you own to some wholly owned corporation that you create
in a tax haven. youtransfer tha intellectual property to yourself and you buy it back from yourself to use here, obviously. but in the process you're avoiding paying tens of billions of dollars to uncle samment that's what i'm after so these kind of gimmicks, these tax avoidance schemes which are put together here do not, they ought to be closed and they ought to be stopped even if we had no deficits. >> so if, in fact, is there the political will to do that before i consider the question of doing that in exchange for some entitlement cuts and the like, the political will to eliminate these kinds of tax avoidance schemes? >> yeah, as a matter of fact, i believe there is. and this is a worldwide problem. other governments are now facing the same problem. we have trillions of dollars worldwide which are lost to these tax avoidance schemes. people who are trying to
avoid paying taxes who find the tax havens are able to shift their assets or in the case of corporations, their revenues to these offshore tax havens. we have recently there was a study made of 30 of the largest corporations in america whose revenues and whose profits, excuse me whose profits are over 100 billion dollars together who paid nothing in taxes in the united states. so i believe there are some republicans who are willing to join just about every democrat to close down these schemes and stop these tax havens from soaking up money which really belongs to uncle sam. that's a different issue from whether or not we ought to persuade ourselves or persuade the public or the corporate world that we can give up legitimate deductions in order to have lower rates. it's a different issue. because we need additional revenues if we're going to do the deficit reduction in
a-- way. >> why has this not been done before, these are not new laws on the books tax avoidance legislation. >> because there's a lot of special interest folks around here who have been able to get these special provisions into the laws so that they can gain by not paying taxes. and on the other hand, and they're also complex. they're made intentionally complex. very difficult for the average person to understand how does it work. how does a corporate transfer its patents and its copyrights, its intellectual property to its wholly owned corporation overseas, transfer that, to that corporation and then, in effect, lease it back. pay itself royaltieso ift money which is earned in the united states off to a tax haven. now i may have already lost your audience just in describing it that way. because these are complex kind of avoidance schemes.
and that complexity is what some of these special interests count on in order to avoid us correcting this kind of a problem. >> rose: so what will you do in the next two years. >> we have a bill which is aimed at stopping the tax avoidae schemes. and to use the revenue for a purpose, a legitimate purpose of reducing our deficit or protecting some of the major cuts from taking place that we saw, for instance, in sequestration. we got to protect education in this funding. we've got to protect the environment in this country. we've got to protect our national security. we've got to do things for ourselves that the federal government does. we can't just simply continue to cut out programs which give us food inspectors, which give us the kind of safety that we need for our airplanes. we can't just keep cutting
that. we've got to find the additional revenues which have been lost to the government to do this so. so this is what i am going to continue to do. we have a whole bunch of democratic supporters. i believe that we are going to find that there are some republican supporters who are willing to close down these tax avoidance schemes in order to produce revenue. not just to cut rates but to produce these additional revenue which has been lost to uncle sam. >> rose: and you believe you can get it through a republican house? >> no, i think c gett through a republican and democratic senate which is now controlled by democrats, of course. but i believe on a bipartisan basis here in the senate we will find enough republicans who will join this effort. and then with the president signing on, that then the public will pressure the house of representatives to go along. >> rose: american tax-- corporate tax rates in america, how do they differ to those corporate tax rates around the world and other industrialized nations? >> it depends on whether you look at the rate that's on
the books or you ok defective rate. the rate that's on the book says up to 35%. the effective rate is about 12%, after all the deductions and all the loopholes are used, you get down to what is the real, actual or effective rate of 12%. but corporate contributions to our treasury in the form of taxes is at an all-time low. and it is only 9% now of the revenues coming into the treasury come from corporations. a few years back it was double that. a few years before that it was triple that. it used to be, many years ago that half of the tax revenues that came to washington came from corporations. now it's down to 9% of our revenues. and in large measure it's because of the kind of deductions and loopholes which used, some of which are perfectly legitimate because they have performed an economic function, some of which are not. >> rose: when you look at the debt, the debt and you look at a debt that is 74,
73% of gdp, and people say, and many people say, that we can sustain that level for nine or ten years, do y agree with that? >> well, i'm not an economist. but i believe we have to reduce our debt. and i think we have to, in order to do that, i believe we have to reduce our deficits. >> rose: and can we -- >> the question is how we reduce those deficits. in my book it's not whether we can do it, if we do it in a balanced way. >> rose: is the sequestration hurting the defense department or have they planned for it? >> i think it hurts the readiness. it hurts our national security. it hurts our readiness because it's so mindless, so unpry pore-- prioritized. it's so across-the-board there are very few exceptions allowed to it. so that means instead of being able to pick and choose where you make cuts in order to make whatever needed reduction you make in the budget, it applies to every single program across-the-board.
and that doesn't make any sense it makes no sense in a household budget. if you had to reduce your spending in a household you wouldn't say we're cutting education by 10%, cutting health care by 10%. we're going to cut food by 10%. and cut recreation, going to the movies, going on a vacation by 10%. would you pick and choose. in my house we protect education and health care. we would cut down if we could on food and then we wouldn't go on a vacation or wouldn't go to the movies. you prioritize as a family. but you can't do that with sequestration because it's so across-the-board. it's so unprioritized. >> if you, this is what the president said about you. if you have ever worn the uniform, worked a shift on an assembly line or sacrificed to make ends meets then you have a voice or a vote. no one has worked harder bringing manacturing job back t our sre, work to close unfair tax loopholes and make sure everybody plays by the same set of rules. what kind of manufacturing base can we have?
>> a very good one, number one, technology is more and more part of that base. and u.s. is great at technology. we got to make sure that our intellectual property, by the way, is not stolen. and a lot of the cybertheft going on particularly from china has got to be stopped. nonetheless we're great at techlogy. this is our strength and technology is morend more a part of the cost of production. secondly, what we finally are doing is realizing that we need to have a partnership between the government and our private sector and labor. that has been a long time in coming. ten years ago it was said that if government got involved in being a partner with business, that that would be something bad called industrial policy. we no longer call that kind of partnership a bad name because now we reale that every single country that wants a manufacturing base has got to have a
partnership. the support. whether it's tax credits. whether it may be grants for advanced research and development, whatever it is, you need to have government and your industry and your labor working together. and that's now been doing, it's being done in this country. we have a lot of combined research and development. back in michigan, for instance, where we do a lot of our research and development on commercial vehicles, we now have linked the military world with the commercial world so that the business and the government and our academia and as well as labor are working together and that's critically important. it's been a painful learning process but we learned our lesson. >> as you know republicans say, the administration that they're prepared in a sense to do different things on the revenue side, even though speaker boehner has said he's done all that he's prepared to do on the revenue side. other republicans say they're prepared to listen
to change in the revenue side if, in fact, the administration is prepared to lay out its casheds on what it would do about reform of the entitlement programs. do you believe the president has done all that he should do in laying out what he is prepared to do on that front? >> i think he is prepared. the reason i think that they probably have not come up with specifics is that they have not found a partner who is willing to truly negotiate in a balanced way. in other words,-- in other words, to consider all three legs to that stool. to consider additional ending cuts as well as entitlement reform and revenue. once your speaker of the house says revenues are off the table, he's doing nothing more in the area of revenues, that means there is nobody there who you are able to negotiate with. unless you start with a willingness to look at all three parts of the solution, then it seems to me the president has done as much as he can be expected to do in saying he is willing to look at all three legs to
that stool. so i don't criticize the president here. i think with the missing, the missing feature here has been the lack of moderate republicans, particularly in the house. they've been caught up in this tea party crossfire where a moderate republican has trouble in a republican primary getting nominated, even republicans such as dick luggar and olympia snowe have problems getting either nominated, mainly getting nominated in a republican primary. and as a result you have a greater divergence between a republican group that is farther to the right and is under the gun of the tea party, and the, whoever the democrats happen to be here. so i don't fault the president at all here. i think he has shown a willingness to compromise. but you got to have folks that accept the assumption that the solution here has got to be a balanced one. >> you've also investigated, i want to talk about economic issues and come back to national security
issues. an op ed in the michigan times, you recommended policy changes to address derivative trading abuses which had something to do with the crisis of the subprime crisis. you said requiring major banks to disclose to regulars trading portfolios such as the ones in the-- prove claims that that derivative reduce risks rather than increase them. stop using derivative pricing practices to hide loss, enforce risk limit breaches by ending risky trade rather than silence the alarm, insist troughe trougher-- taxpayers won't be on the hook for a bank bailout. do you not believe the capitol requirements as they are now are sufficient? >> well, i don't think they're sufficient. but the world community, the gulars around the wod don't either. that's why they have come up with this thing called basal 3. it would increase the amount of-- . >> rose: i'm including what is proposed bypassal 3 and also what is proposed by
dodd frank. >> is that sufficient to you. >> no, then i think-- it is, providing we implement dodd frank. right now some of the big banks are opposing the implementation of dodd frank. they're fighting the regulations which would implement what we put in place in law. for instance, what we have seen with some of the big banks is that they take these very risky gambles, some of them, in fact a lot of them are in the so-called derivatives area. and if they are so-called synthetic derivatives and this really gets complex, where there is no asset that backs up the bet, in other words, where it's not a mortgage-backed kind of a bet where if you lose it you got a mortgage to pay off, then what you are doing is having these pure bets that these major banks are making. for instance as to what direction the economy will go. and if you have bets like that, which do not have solid assets behind them, en you' not doin hedging, you're doing betting. you might as well just go to a gambling house.
and then if these banks fail, then if we have to bail them out again, and that's what we're trying to avoid, then you've got a major major hit to the economy. and if you don't bail them out. you got a major hit to the economy. we don't want to be put in that position ever again. and so you've got to have tighter regulations. you've got to have the cop back on the beat on wall street. you cannot allow the so-called proprietary trading to continue unless there's a legitimate real hedge which s an asset which is identified as the thing being hedged against. >> but my point is that is addressed by dodd frank or not? >> it has been addressed providing the regulators finish the regulations. right now they're about halfway through the regulations. and they are being fought every step of the way by the big banks. >> it has taken so long. is it the part of the resistance of lobbyists or is it simply the fact that the regular laition was so many and we're so long rather than more precise and
specific and efficient? some of each but these are complex rules that have to be devised, there have to be hearings. proposed regulations, opportunities to comment. but the opposition here is huge. there's just an incredible amount of money which is going into fighting these kind of regulations and it's a pitty because it seems to me that the banks are going to be a lot more, a lot better off if the public has confidence in them once again and if they would stop and there was a wonderful article in the american bankers associationmagazine as a matter of fa urging that the banks, that people who subscribe to that magazine quit fighting every thing in terms of getting regulation that is reasonable and moderate, bank in place so that the banks can gain the confidence to the public again. >> looking at syria, and you got leon panetta and others to respond to the idea,
whether we should have done more and there were recommendations to the president to do more. does carl levin, the chairman of the armed services committee believe we should have done more in syria? >> i think we should do more now. i think the president has been properly cautious because of the difficulty of knowing who, for instance, any additional weapons would go to. we have to make sure that we don't support the wrong people in syria. and there's some elements of the opposition here that we would not want to strengthen. there are other elements we would want to strengthen. so i think the president has been properly cautious. as of this point i think this has gone on now so long. the slaughter has been so intense. and there seems to be some coming together of a political compromise among the opposition. it's not done yet. but at least there's progress in that area. so that it looks as though when a saad falls and he will-- assad falls and he will.
he not only should but he will fall that then there would be something to take his place other than chaos because if it's chaos it's going to be the wrong forces, including some of the extreme forces that are likely to take over. >> rose: i hear you saying that it's-- that you don't look back at this and say we would have been bet ferr we had done more earlier before all these outside forces came into support the free syrian army. >> that's correct. i do think now there are some things that we should do. and i would include supporting turkey if they are willing to have a zone, along the border, inside of syria, inside of syria which would be protected by the turks. that we ought to help the turks to protect that zone. we could use our patriot missiles, for inance, to enforce a no-fly zone above that zone along the border. and i think that we also in addition to that, should at
least consider seriously doing two things directly against the syrian air force. one is to knock out some of their air defense and the other is to knock out some of their airplanes, their military airplanes because i think that would be a very powerful message to take those steps, even if they were taken in limited ways. it wld up the ante. up the milita pressure on assad. >> rose: should the united states do that unilaterally or in conjunction with other nations or should we wait for u.n. resolutions to that effect? >> well, we don't need a u.n. resolution, i don't think. but we do need other nations to be with us, including arab nations. the arab nations did have a meeting recently and it was the opposition that was seated there, not syria. so that we know there is a lot of support inside the arab world to take on assad. and so we would have the support of many, many other countries even if we couldn't get anything through the u.n. because of russia. >> rose: so in other words,
russia has a veto in the security council. so even though you couldn't get something through the security council because of a veto by russia or china, you would considering argue that you don't need the united nations or a united nations resolution, what you need is action to take out a syrian anti-aircraft embankments and other kinds of military hardware there could impede their shooting down american or nato or other airplanes. >> well, you don't need the u.n. here providing you have the arab world and a lot of nato countries supporting turkey, for instance, because turkey would have to be the one which would create that zone along the border between turkey and syria. it would be inside of syria. so you would need nato support for turkey. you would need the arab world to be supportive of what would happen there. but i would say that limited air strikes against syrian air defense and against some
of the syrian air force, limited ways, would send a powerful message to assad. you don't have to wipe out all the air defense all over the country. you have to just wipe out air defense which might come to challenge that zone along the border and to make it less safe. you want a zone along that border that is safe. you don't want any syrian planes to come in there to attractive it. so you would want to be able to knock out their air defense and make sure that if any of their military planes have an inqurtion-- incursion into that area that our own patriot missiles would then be able to take them out. >> rose: is this what you and senator mccain recommended to the president in your letter? >> it is. >> rose: and did you get a response from the president? >> we have not yet gotten a response. it's about a week, maybe ten days. >> rose: how long do they need? >> i think they are actually
giving a lot of thought not just to our letter but i think they're also giving a lot to thought of trying to up the ante militarily. so ian't tell you how long they need but i think it'a very serious issue. and the use of military force always is and i think they're also recognizing that this would be a step away from what they have, where they have been. which has been a much more cautious. that this would be an upping of the ante and so before they take that step they want to be comfortable that they're doing the right thingment and by the way, i think you indicated that some of the military leaders had favored taking stronger measures against syria before. and that is true. but a great deal of the military leaders in this country ha not recommended doing something more aggressive than we previously have. which is mainly supporting the opposition on a humanitarian support. >> rose: my impression is -- >> and on refugees. >> rose: you obviously know what i was talking about. my impression was secretary of defense panetta, clinton
and then cia director pat rayus all had recommended that kind of action. >> they have. but there was a number move did not including the chairman of the joint chiefs of staff who recommended to the president to do what the president did do. so there's-- thevion inside of our military leadership. >> rose: but what is interesting now is you think that to the side of doing something, that whatever the factors that have come to the forefront, they have-- the president is rethinking it and you believe he may be leaning to doing something. >> i believe so an hope so. >> rose: let me turn to drone warfare and use of drones. there's also a debate in washington. and do you have reservations about drones? >> reservations against-- . >> rose: when never's used, how they are used, who pcks the taet, ether the should be used against american citizens. all the questions that were raised, have been raised about this, the issue of drones and whether there is
now, you know, an increased concern about how we use drones. >> i think it's important that the use of drones, particularly if they are in use against an american citizen even though that citizen has joined al qaeda and there is good evidence that that person has joined al qaeda has got to be done very carefully. and i think the president has done that, as a matter of fact. however, if there is an american citizen bhoo who is sitting somewhere in a desert in yemen who is part of al qaeda and who is actively engaged in designing attacks against the united states, i think we have a right to go after that person. we ought to obviously try to see if we can capture him. but we also have a right to go after him. i don't think you could give an american citizen or anyone else immunity to be part of a group that has declaredar on the united states. and that is planning and
engaging in aya tacks on the united states simply because he's overseas. he shouldn't be sitting there in a safe zone in a desert in yemen attacking us, planning to attack us, declaring war on us. i think we have a right to respond and hopefully find a way to capture him if we can. but if not i believe that the president is authorized under our resolution. and any president has a right to go after that person using the appropriate amount of force, again hopefully capturing but if not eliminating that perso who ha declared war and actively engaged in war on us. so yes, it's worth a heck of a lot of thought but it's also worth a heck of a lot of thought as to any weapon we use against an american or anyone else anywhere. i mean that takes a lot of thought. it ought to be whether it's a drone or whether it's an f-16 hitting somebody with a missile or any other weapon. it takes alot of thought. the drone world is a slightly different world. they in principles, it's not all that different frankly
from shooting a missile from an airplane. >> rose: with respect to the withdrawal from afghanistan, do you believe that the targeted timetable is the appropriate one or do you believe it should be accelerated and do you believe there should be some troops left behind? >> it's the appropriate timetable for the removal of almost all of our troops by the end of 2014-- 2014 we are i would urge the president to review a timetable is on the pace of reductions between now and 2014. where i have suggested that there be a steady pace of reduction from our troop level now through the end of 2014. rather than a kind of a pause or a, for the most part pause that is now in place until the end of this year. i think it would be better to have a steady pace for a number of reasons, mainly because the ticket to
success in afghanistan is to transfer responsibility to the afghan army that we have helped to train it is a very large army. it ia pular army. and i'm including other parts of the security forces beside the army of afghanistan when i say army. because they have police forces which are popular now. they weren't a year or two ago. they also have local defense forces which are very much supported by the people. but i think the way in which the best course of action to achieve our goals in afghanistan is to transfer responsibility to those afghan security forces. so i would have a steady pace to continue that. >> rose: that's always been -- >>e should lve a modest-- well it's never been the real focus of our mission. our mission has been too often, i believe, what we can do militarily rather than what we can do to train the afghans to take on the taliban. the taliban is des pieced.
they may be feared in afghanistan but they are des pieced in afghanistan. so it seems to me that we-- this has always been my mission, what i thought the right mission would be would be the training and equipping of the afghan forces. and giving them more responsibility to protect the afghan people rather than having us with a major share of that responsibility. >> rose: back to economics for just one question. a lot of people look at the defense budget and see a lot of programs that they don't think are necessary. and you know that budget inside and out. and you know our national security needs. how much fat, how many programs, how many weapons programs are there that you, that cost billions of dolls, you d't belie are necessary. >> well, what i would focus on is what i believe to be the excess expenditures and excess numbers of nuclear
weapons. i think that the cold war being over, the fact that there's no other country that has more than a few nuclear weapons, there's no reason for us to have thousands of them. and we can negotiate and that's the way to do it, with the russians, to significantly reduce the number of those weapons and the kind of supporting falities which are necessary for those weapon i believehat's the major, that's the major program i would go after. can we also remove some troops. i believe we can remove some troops. >> where. >> not just from afghanistan by the way where i would move them more quickly. and there is a huge cost in maintaining our troops there, but also from particularly i would bring home some troops from the pas civic, particularly from okinawa, where it's not just important for us to be able to save those funds but it's also important to the okinawans that there be less pressure on their land. so i would notusthi arnd some troops in the pas civic, i would also
remove some troops as well from okinawa and bring those troops home as well. is there weapons systems where we're spending far too much money, of course there are. anything which is as large as some of the weapons systems that we're building is going to have huge amounts of expenditures. what senator mccain and i have done with the support of our committee is to get passed a reform law about two years ago now, which is called acquisition reform. and what we've donand put in place is a procedure now which hopefully is going to reduce some of these cost overruns which have cost us literally billions of dollars with some of these systems. we're doing that by avoiding these additional technologies being constantly added on as these weapon systems are built which increase the cause very, very dramatically. we also, are going to, by the way we've seen some huge
expenditures which have been wasteful in the areaof formion technology. we have just not been able to get our hands around some of the new systems which are in place to give us much better control over costs and much better audits. s there's been a huge amount of money wasted on those as well. but it's mainly the cost overruns which have been a huge source of the lost money in the defense budget. and we've got this new reform program in the area of acquisition which we believe is going to reduce the number of those cost overruns. >> rose: this is a personal question. you have been in the senate how many years? >> 34. >> rose: 34 years. who has impressed you the most among fellow senators? >> i wouldn't want to single out a name but i would say generally who am impressed by the most are senators who do two things. number one, who do their
homework, work real hard, know what they're talking about, and aren't show horses, but are workhorses. that's one oup. the other gro are pople who ar willing to ta risks, who will cross the aisle, who will do some things that are unpopular. who are willing to gore some objections and step on tomorrow toes and puncture some balloons who are little to work on a bipartisan basis even if that means they're doing things which are either unpopular in their own party or maybe even unpopular with their constituents. so i admire the folks who show independence and guts. >> rose: what will you do when you leave the senate? >> i don't have any idea. it's a year, almost two years away and i just want to focus on the next two years and be able to work here kind of free of the distraction of running for relux. that's the main reason i'm not running for re-election is i think our country is at a crossroads and i want to
be able to spend 100% of my time on the job and not be out raising money or running for re-election at this time. i think we've got to find a way to bring our parties together here on capitol hill, the public deserves it. and that's what we're sent hereor. >> senator levin thank you so much for joining us. >> charlie, great being with us. you. >> nick d'aloisio is here, on monday yahoo! bought sumly, a company that he created t has an app he developed, the price was said to be $30 million. here is the interesting fact. he is only 17 years old. the app which is no longer available for download soum arized news stories for smart phones. yahoo! says they will use its code in their efforts to gain a greater share of the mobile market. e young developer will work i yahoo!'s london office by day. he has to do that. you can't work for yahoo! and work at home. and will study for his exams by night. i am pleased to have nick
d'aloisio at this table. >> thank you. >> rose: good to see you. so tell me what is sumly and how did you come to create it? >> so sumly is a technology that i have been developing for about the last two years. and what if does is it automatically condenses and summarizes long form text into summaries and snip oats. now the idea behind that is when are you on a phone you are rushed for time. are you busy, you have to st lk do and see what's the gist of something. i want to just get what is happening in the world right now is so it provides this medium where you can skim through 50 summaries and get an idea of what is happening. and so you know, over the last three, four years, i had been teaching myself to program. and was very fortunate to have worked with the standford research institute over a period 20612 to develop this algorithm and that is what yahoo! is buying. >> are you a self-taught programmer. >> yeah, well, i'm still in the process, it's kind of self-teaching. i always had a fascination for technogy a design and so when i was 12 the app store was announced in kind
of march 2008. and this is a true story. i went into an apple store, one of the retail stores a few days later and was like i want to learn how to program. >> rose: you were 12. >> 12 years old, true story. and this is in london because that is where i live. and the people at the retail store said we don't even know what a program language is so i was a bit disheartened and spent 6 months waiting for the app store to go public. and when it went public there was enough resources on-line to teach myself a bac lel of programming. so ieleased my first a in that summer. it was one of the first 3,000 apps on the app store. >> rose: you had like a mac pro. >> mac book pro. there is, i wrote, my parents made me write an agreement, a contract because the mac book pro is 1,000 more expensive than the entry level. why do you need all this computing power. i was trying to explain i wanted to do 3-d rendering softs ware. they didn't even know what that was. and again, this is self-taught, i bought a book from a book shop called
foils, one of the big technical book shops. so i managed to persuade them to get the computer and began the journey of teaching myself to program. >> did it take a lot of time. if you had a 12 hour day would you spend 8 hour doesing this. >> unfortunately hi the dilemma of school full-time education. and homework so it was really in the summer holidays that would you have that four, five week period. and i remember some nights i would do like see apps as a project, so spend four or five week doesing one app. and sometimes my time zone had gone strange. i would get up at 123 p.m. -- midday, work to 4 a.m., sleep. and obviously my parents at first re concerned they were like well, you're 13, 14, you shouldn't be taking these hours. but they began to see that i guess i had like a natural talent. >> they knew this was serious and you knew what you were doing. >> it was enjoyment, like play time for me, entertainment. >> rose: and so tell me how the yahoo! deal came about. >> sure. so we were, as we were hearing earlier, we launched the app sumly november 1st
of last year. and we received, you know, a great response. we had almost a million downloads. >> i think that say combination of things. number one it works, as a product, as an application. secondly it's because of you. people, you got a lot of attention for this because of your youth. >> uh-huh. i think fundamentally without the idea and the technology behind t this wouldn't have happened. >> rose: clearly that's true. >> and the way i emphasize this point is that when i started the application about two years ago it was under a different name, called trim it. and it was an iphone app, one of these sum procedure jects after my revising for exams, sort of the idea. took about four weeks getting the original code, released it. about a month later these investors from hong kong who represented the private fund of the hong kong billionaire-- they reached out to me. >> rose: how did they know about you. >> so what had happened is i had released this application. and i had gotten fortunate in that apple had obviously seen this as being distinct
novel idea. >> so tech crunch and a few wloing-- blogs began to write go it, with the tech crunch article this is the article that the hong kong people read. i stayed up in london for it to come out. and i ended up staying up until 4 a.m. london time. now the article was originally meant to come out at 8:00 p.m., the night prior. now 4 a.m. london people is perfect time in hong kong, about lunchtime, right. and my-- i would say it was funny but my theory is if it had gone out when it was meant to hong kong would have been asleep still and probably wouldn't have got then front of-- and it really is one of those moments where that event of that person reading it and reaching out changed the whole course of sumly and basically my life so again it was one of those weird, fade or whatever. so fascinating jurbee. they reached out to me not knowing my age and we had a phone call. and i was not trying to put on a deep voice by trying to talk technical and serious and didn't let on it was just me who had done the coding.
>> rose: backed up by smart and brilliant team. >> tan was a team and we are in london. they said how can we arrange meetings. and i think we were like we want to do a phone call at 11 a.m. this had been the night prior. i said i can't did 121 a.m. why can't you step out the office. >> i said i'm at school. >> and they're like what, college or post grad. >> no, high school. >> and they are he like what final year. >> no, 10th grade, 9th grade. which is a bit weird. they ended flying out from hong kong to london to make sure it was legitimate, met my parents. understood i had a natural fascination for technology and said right let's back this, let's start. >> rose: what are you going to do for yahoo!. >> so i'm going to be working out of their london office, they're developing a mobile hub in new york and london and my role will be trying to integrate this sum arization technology into different facets, of the mobile organization so i will be work on the mobile team. and really what yahoo! is doing and this is why i'm so excited by the opportunity is they have these assets, these verticals, they call them daily habits, weather,
stocks, fantasy football, news is one of them. so news applies to sumly. and the idea is that they want to create these personalized experiences for mobile phones like an app for each one of these verticals. and obviously news is going to be one of those apps this is where i am going to be working with taking that sum arization technology and integrating it at scale for the mobile device. >> rose: at the same time will you be getting a degree from cambridge or oxford or somewhere. >> hopefully. i haven't been accepted into any university yet. look, yeah, i would love to continue my education. and oxford or cambridge would be a great place to do that. >> rose: and so when they said the valuation we're going put on this is 30 million. >> yeah, that's-- i condition confirm that. that's reported. >> rose: right. >> take it as you will. >> rose: we will take it as we will, let's is a assume we take it at 30 million, without knowing. >> sure. >> rose: but we hope it is in the ballpark. >> i can't say. >> rose: i know you can't. so what are you going to do
with all the money, no matter how much it is. >> look, the money just isn't coming into it from my mind. and look we were approached by a few companies. >> rose: so not the only offer. >> wasn't the only offer. and the fascinating thing is that when we got, we began talking to yahoo!, it just became clear immediately, i spent some time on the campus and realized that this is a company that has such opportunity on the mobile landscape. you look at the mobile landscape. >> rose: which is the future. >> which is the future, as i said, you know, i think it is a billion smart phones today n 2, 3 years there will be multiples, 12, 3 billion. so every one is consuming content now on a phone. people are busy, if i'm waiting in line for starbucks or something, i want to just get information. an sumly can be the future of that information. if you think about t if you like a summary and i want to read that full story with the press of a button you can. you can get the full story but at least you have that context. >> rose: what are you summarizing here, stories in "the new york times" or -- >> so in the previous
version of the app, which is now being removed off the store because we're only getting the technology, in the previous version we worked with news corporation, we had a contract with them, so we had the "the wall street journal" for example and we were takin rrs feeds and automatically summarizing them into these snippets. now going forward we can apply it to news but we can also apply it to other forms of information. it's kind of our choice. >> like what. >> wick pedestriania, for example. >> rose: steve jobs was a hero which understandable but why for you? >> it is the persistence, steve jobs, it's his persistence, tenacity thing. i think what happened is after he died there was an interview that came out from like the '70s. and de this quote and i can't remember the exact words but it was something along the lines of most peopleon't ask. it's just-- i thought about that, right. >> rose: most people don't ask. >> most people don't ask. most people don't ask things, so they don't even-- so let's say i done know are you a person you want to do an app. and you release the app and you want apple to feature it
for example. 90 whatever the percent is won't e-mail someone at apple or try and get in touch say check out my app. but there is the small group of people that will. and the famous example with steve jobs is he phoned up the founder of hewlett packards in the phone book a when he was 15 and said i want to get an internship and he got the part it is that kind of idea of -- >> either david packard or-- i think it was bill hewitt. >> one of them. so it's that idea of just friday, do it. like have a go. because there's nothing to lose. will you learn from it. >> yeah. >> and did you phone up somebody. >> yeah, i mean i, what happened is i had the iphone app and i began kijd of talking with a few journalists and again it was specifically to apple. and for a number of years i never got any response. i used to e-mail, there was a generic e-mail at apple where you develop relations and for years i would e-ml, send an e-mail, never respond and one day when i just launched sumly they featured it as app of the week and that was one of the biggest moments from my
professional kind of perspective. and i finally got an e-mail back. i tried. >> this is adam kay k you know him, don't you. >> yes. >> he says nick represents a generational shift in the kind of things he is thinking about. and what it means to be truly mobile. that generation is not just mobile first, they are mobile only. that is a different point of view. he's right about that. >> yeah, definitely. i think the exciting thing if if i talk specific about the sum arization, if you think about publishers they have been writing content for hundreds of year, starting off for print and on-line. if you think about from a spaition perspective the size of a piece of paper, a kind of like a desktop screen. so if you think about when the printing press invented in the 16th century for about 400 years it hasn't really been a change in the form of content people bright. until the mobile phone. now with the mobile phone you basically take a piece of april, cut it into fifths, you take a fifthat is the screen real estate we are
talking about. so how do you go about changing the content and information for a generation of readers who only consume on that small screen. and that's where i think there is so much power with a sum arization solution because it means the preexisting content has been written for hundreds of years can continue to be wrichblt you don't have to ask a journalist or a writer to write snippets. they can write full story but if you can come up with a smart automatic way of then basically refining them for different screen sizes, so you take an android phone at might be one sumry, an iphone that might be another summary,that is a really versatile solution. >> does the programming algorithm do the sum ar sgliz shall asi summarizing s that what it does. >> yes. not to get into too much detail but the way it fundamentally works is this thing called machine learning. suggest set of artificial intelligence. what you do is get a lot of human abstracts, so you get humans to sum ar sgliz-- summarize text but
you get them to summarize it the way the algorithmism does so the computer is only taking preexisting words, so it's saying you know sentence number four phrase number 15, sentence number 20, and that fit them together to form a summary that is what the computer is doing. similarly you get a human to think in that same constraint. then basically you have what you would call perfect summaries. and you call this like a training corpus and what you do is you say each article that comes along you get the computer summary, the human summary, you compare them. and the computer then tries and changes the way it forms a summary to adapt to get to as close as possible as the human summary. do that over time long enough you begin to see patterns. and it is those patterns that form the basis of the algorithm. >> this is what i was trying to remember you said quote talking about sumly, you said i see myself doing other companies. and the sumly version of what i do in the next 20 years, this what you have just done, will only be the first half.
>> that is one quote. >> i think it is more met for call. >> are you walking away from your own quote. >> no, i'm not. look,opefully wha is going to be a long career in technology and business in general, i think i'm going to hopefully come across other ideas that i feel are really big. and similarly to sumly it could be game changing in the sense that it's a brand-new form of content and the exciting thing is with mobile and technology you look over the last five to ten years a lot of these big brand-new companies are in the technology space. and so it is's just a really exciting time to be creative, i guess because you can think up a brand-new idea and with the app store you can release it and tomorrow your app can be alongside some of the biggest and well-known companies in the world. that's h it happened to me and i'm sure will happen to others. >> there is this which every entrepreneur faces. do i sell or not sell. you know, famous case you take from groupon and supposedly, andrew mason, hi an offer of $6 billion.
>> wow. >> he chose not to sell. some people say that that was a mistake. mark zuckerberg had an offer, chose not to sell and went on to create facebook in the market value that he is, or the market cap that he has. y did you decide to sell rather than to do it yourself? >> it's a fundamental question. i like to see sumly as not a game changing technology but something that has a lot of potential. and you know i started this as a 15-year-old kid, i'm 17 now. i didn't want my inexperience or the fact that we were a small company to get in the way of that technology becoming an integral as i think it can be. and i realize that with a company like yahoo! that's encouraging, is hiring new people, en couraging entrreneurs to join the, it would be like the perfect environment like literally to take the idea of sum arization, the technology we have today that we've been
developing over the last two years and accelerate it like faster, better, quicker. and get it in front of hundreds of millions of people. that excites me because it means that my original idea that i had in my bedroom is suddenly going to get in front of hundreds of millions of people. and that audience and scale is only possible at a company like yahoo!. and so the money didn't come into it because if the money did it might have been like well, i wait two more years and i can get it at the whatever the price it is it is actualljust a once in lifetime opportunity to really have a stab at fundamentally changing the way they consume content on a mobile. let's do it. that is the approach i will have at yahoo! as an employee. >> thank you for coming. >> thank you so much. >> great to see you. captioning sponsored by rose communications captioned by media access group at wgbh access.wgbh.org