♪ Christiane: Hello and welcome to "Amanpour and Company."

As Russia launches a new wave of missiles, what is the state of Ukrainian resistance?

The former governor of Virginia Terry McAuliffe joins me.

Then, five years after President Trump pulled the United States out of the Iran nuclear deal.

What is the path forward?

Plus -- >> It has grown into an industry that is so dominant that 7% of the American workforce works for private equity backed companies.

Christiane: The plunderers.

Journalist Gretchen Morgenson tells Walter Isaacson why we should be worried about private equity.

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Christiane: Welcome to the program.

Ukraine has once again come under withering barrages of missile and drone attacks by Russia.

Various cities have been attacked as Russia tries to wear down the air defense systems.

Moscow has ordered the evacuation of residents from occupied areas close to the Zaporizhzhia power plant, raising serious concerns about its safety.

For more than a year, Ukraine has defied expectations with its resistance, but senior leaders are trying to manage expectations about the much anticipated counteroffensive.

The key is support from nations like the United States, but there seems to be a sense that the NATO alliance is calling for visible results before providing more weapons.

Terry McAuliffe is the former governor of Virginia and a long-standing friend and ally of President Biden and he joins me from Kyiv.

Welcome to the program.

Mr. McAuliffe: An honor to be with you.

Christiane: You have gone in a private capacity, a former governor.

What are you doing in Ukraine at this particularly important time?

Mr. McAuliffe: I was asked by several organizations if I would come over to help and assist and try to get U.S. help for restoration and rebuilding infrastructure as governor of Virginia.

We led the nation in public-private partnerships, rebuilding airports and roads and we did a lot of work on the port good.

I came over in a private capacity.

I have spent seven days here, I have driven 1900 miles in seven days.

From Warsaw all the way through Ukraine.

I spent time on the front, I was in the battle zone.

I met with NGOs, government ministers to talk about rebuilding.

We have to plant the seeds now to get ready to rebuild.

They have lost 1000 schools, 600 hospitals, and they need help.

I wanted to come over so I can now go back to the United States and say, Here are the priorities given to me by the ministers and businesses.

I visited manufacturing plants.

I went to see Ukraine -- it breaks your heart to see children from displaced homes from the war zone.

They lost to their home, it had been demolished.

They are back in school after three years of not having any education.

But they have no home and they don't have parents.

I saw a child who had been abducted.

Christiane: We will get to that in a moment.

You are seeing with your own eyes this terrible humanitarian catastrophe but also you can see because you are there, on a day when Russia has launched another barrage, 35 drones.

It is relentless.

When you met with the commanders and I assume the ministers, what are they saying they need?

How are they saying they are doing with the current level of weapons and support they've got from you all?

Mr. McAuliffe: Sure.

I met with three different battalion commanders, I was on the front line.

I saw four Himars launched in the air.

We delivered some medical supplies to one of the most forward basis we have, a stabilization center for soldiers who have been wounded.

Part of our convoy got attacked while we were there.

I have seen it all in seven days that I did not think I would experience.

I want to say this -- everybody I met from the troops to the commanders, I've got to tell you, how much they love the United States.

They say universally they would not be where they are today pushing back Russia if it were not for the United States.

They were so appreciative to President Biden and congressional leadership that have come to the country.

But they are in a war, as they said, we need more.

You don't blame them.

These folks are dedicated, these Ukrainian soldiers, they will fight to the absolute end.

They want their land back and rusher out of their territory.

They want their lives back.

One of the reasons I came is here we are in a democracy.

Many nations today are moving away from democracies.

Here we have a young democracy.

We need to embrace Ukraine.

This is a country trying to get on its feet, to move forward as a democracy.

I personally happen to believe the fate of what we have as NATO and Europe is this battle in Ukraine.

Russia have come in here and committed so many atrocities against soldiers my children and families.

They need to be stopped and they are appreciative that America and other NATO allies are here.

So first, they are very appreciative of what has been done.

Two, they need everything we can give them.

I come from a place of give them everything we can.

We need to defeat Russia and push them out of Ukraine.

Ukrainians are some of the most dedicated soldiers of ever dealt with.

They are here, several of them year on the ground, no rotations out, and they are not going anywhere, they are fighting till the end until they get the country back.

Christiane: That's interesting you are seeing that.

A lot of what has been reported, but you seeing that with your own eyes and listening to that determination.

What do you make of a defense minister who said in an interview, in countries that are our partners, our friends, the expectation of the counter offensive is overestimated.

Most people are waiting for something huge, I would say, that is my main concern.

Did you get the impression from people on the ground or those in the ministries, that there seems to be a lot of pressure from the U.S. and NATO for these very soldiers to show results and keep up the kind of support you are talking about them needing?

Mr. McAuliffe: No, I didn't feel that from soldiers or commanders I met.

I think they in Ukraine are the ones that want to do this offensive.

They want to push Russia back.

They've been dealing with them for a year and I think they've had more success than people thought they would have.

It is generated in Ukraine I think, they are very dedicated.

America come up President Biden has said we are standing with you through thick and thin until the end, and the other NATO countries.

I'm not here talking military strategy, although I am talking to soldiers.

They want to push Russia back, to push them out of their country and they will do what is most effective.

They know that NATO in America -- I cannot say it enough, it made me so proud of our country, that we are here in they are appreciative that America standing side-by-side with them.

Every American watching the show, I want you to know that Ukrainians love you.

Christiane: That is absolutely true, because we see that and reported that when we are on the ground very grateful for all the support they are getting.

But I want to ask this -- you know your country better than anybody there.

You have run for election, you have been elected, you are a fundraiser for the Democratic party, and you have another election coming up quickly.

Do you feel the people of the United States, the congresspeople of the United States, need to see more results like we saw on the ground in the fall when physically the last major time Ukraine pushed back Russian forces?

Or do you think no matter how it goes, the U.S. people and politicians will maintain this support?

Mr. McAuliffe: I think, as President Biden has said, we are with you to the bitter end and I think that speaks for all Americans.

We are fighting for democracy, fighting for a nation that has been attacks.

We are standing up for our friends.

That's what we do United States of America.

So put the politics aside and elections.

We will be here and stay here.

America is a superpower and that is our responsibility.

Being a superpower means we have to stand with fellow democracies and stop horrible aggressions like we have seen here I Russia.

When this war started a little over a year ago, everybody thought, a lot of people wrote that Russia would come in and get Kyiv and they would have Ukraine back.

That did not happen.

They push them out of Kyiv.

I've been traveling around and I've seen buildings that were hit.

They pushed them out.

The vast majority they have been able to regain that back.

I think a lot of people didn't think they would have this success.

Everybody said Bahkmut would be gone months ago.

These Ukrainians are fighters and not giving up.

We will stand with them absolutely.

This is the future of the world as we know it, the future of Europe and NATO and who we are as a country and who do we stand up and fight for?

This is the right fight and Americans understand that.

We've done that through the history of the United States and we understand what is at stake.

Christiane: You would say with confidence that the Kremlin's belief that they can out out-wait the United States would be displaced?

Mr. McAuliffe: Yes, I would invite others to come over here and expand what I've experienced.

Talk to mothers and families and children and soldiers.

They are in this for the long haul and they are not giving up.

And we are not giving up.

This could be a long battle.

I don't know.

I am not here doing military strategy.

But Ukraine has had more success than anyone originally anticipated they would have feared I can tell you this, they are not giving up.

I have been with, I've talked to them, I've seen what is going on in the ground.

I've seen Russian tanks being taken out.

This is a tough fighting force in Ukraine.

They've had great success against Russia.

They have to keep that going and we have to win.

America and democracy has to win.

We've got to get freedom for Ukraine.

Christiane: Can I ask you something closer to home?

There's a lot of talk in the press in the United States that the Biden Administration may be considering you, adding you to the cabinet.

What can you tell us about that?

You are very robustly out there- [laughter] defending the administration's point of view.

Mr. McAuliffe: Listen, I love Joe Biden.

I've known the president for four decades and I will do anything he wants me to do.

I will leave it at that.

Christiane: All right.

We will watch this space.

Mr. McAuliffe: I want every American -- Christiane: Let me ask this next question and you can add what you are thinking.

The debt issue, huge issue, tomorrow morning, there will be an anticipated and important meeting between President Biden and congressional leaders.

The treasury is warning of economic catastrophe.

The U.S. has never defaulted, correct me if I am wrong.

It's more than just a domestic political issue.

People like Hillary Clinton and others have called it a matter of national security.

Presumably all of the people in the region are waiting to see if America keeps its international and national obligations.

What do you think will happen?

Mr. McAuliffe: I agree with you.

People around the world, especially the region I am in, they pay a lot of attention to what is happening in America.

They pay attention to what American politicians say and what American politicians say about what is happening in Ukraine.

It reverberates for the entire country.

That's why I am here and I was so glad to be here on a fact-finding mission.

As a private citizen.

But to convey my personal opinion, this is the fight for democracy here in Ukraine.

We've got to raise the debt ceiling.

I hate to see the politics that is played with this.

When President Trump was in office, there were no issues, Democrats joined in to raise the debt ceiling.

Now you have Republicans in Congress I think trying to do politics with this.

We need to raise the debt ceiling, I could not agree more with Secretary Yellen, we will run out of money.

This could be catastrophic for families at home.

This will affect everybody at home, every person who has a credit card, everybody with a mortgage.

If United States of America default on its debt, as we know this is debt that has already been incurred, it is past spending, we are the United States of America -- we pay our bills.

That's why we got to quit the politics playing with the debt ceiling, we've got to raise it and move on and get the focus back to helping people at home and making sure their lives are better.

We just had gigantic job growth in the U.S.

The economy has made great progress to getting people back to work after COVID.

That's what we should be focusing on, not this debt debate that is sending a horrible message in America.

I can tell you over here, it is not a good message and they are wondering if America default on their debt and doesn't pay their bills, what happens to us?

They are in the middle of fighting a war here against Russia.

As I say, we need to stop them.

I spent an entire day here meeting with children who have lost their home.

Christiane: I want to put up some of the pictures of the children.

Tell us about that because that is a huge problem for Ukrainians.

You got this lovely picture of you and a young boy who has been reunited with his parents, as you said.

Ukrainians have been desperate to get back many who have been abducted.

Thousands and thousands, they say.

Mr. McAuliffe: We have a group that spent eight hours with, Save Ukraine, it has 11 facilities in Ukraine where they basically bring in people who been displaced, their homes have been demolished, and they give them temporary housing and they provide education for the children.

I sat and talked to a child three days ago and this child lived in a bomb shelter in a basement for six months.

The only time he got out of that shelter was to go to the bathroom and to try to find some water.

All of these children.

The director told me we have 11 but we could use 150 of these facilities.

They took us to a Save Ukraine facility, the next step in housing where families are put in I wanted to meet some of the children who had been kidnapped.

I spent half an hour in one room where you have three children and the mother and father.

This mother explained what happened to her child.

15 years old, taken for six months.

He was rescued.

Save Ukraine has rescued about 100 children but they have thousands more they have to do it.

This mother was forced to have her child put on a bus.

Supposedly it was going to be a couple of weeks of fresh air.

She knew it was going to happen.

She told her son, don't give them any documentation.

The Russian officials said you need to put your son on that bus or we are taking all of your rights away from you and he will no longer be your child.

He went on the bus and for six months he was taken away, he had to listen to the Russian national anthem for two hours a day.

There are thousands of children like this.

This is what we are fighting for.

That's why America is here, to make sure we are helping.

This is such an important fight for democracy, a fight for who we are as human beings.

Christiane: Thank you so much for joining us from Kyiv.

Five years ago today, President Trump pulled the United States out of the Iran Nuclear Deal.

There have been attempts to resurrect it but they have failed and the Biden administration has not made it a top priority.

Thence Trump abandoned the deal, Tehran's nuclear program is more advanced than it has ever been.

Is there a path to a new deal?

The director of the Iran project at the International crisis group is joining me from Washington.

Welcome back to the program.

>> Thank you, great to be with you.

Christiane: Remind us where we were this time five years ago in terms of controlling the Iranian nuclear program and where we are now.

>> On the eighth of May, 2018, Iran was under the most rigorous monitoring regime that has ever been established by the U.N. nuclear watchdog.

Iran was fully complying by its obligations under the deal.

And of course by the time President Biden walked into the Oval Office, that timeline had shrunk and right now, according to Pentagon officials, it is at 12 days instead of 12 months and Iran has roll back a lot of mechanisms so the transparency of the program is way less than what was in the past.

We are blind about a lot of their activities.

The Trump Administration managed to take Iran's nuclear program out of the box.

Christiane: Thus dramatic the way you say that.

Just to be clear, the Trump Administration said we could get a better deal and they lost a process called maximum pressure where they tried to squeeze Iran with more punitive measures thinking you would cause them to act in a different way.

What did maximum pressure achieve?

>> It has been an abject failure across the board.

This has brought Iran to the verge of nuclear weapons.

Iran has never been closer.

It has also rendered Iran much more aggressive in the region.

In 2019, you remember the hot summer of that year, when Iran started attacking shipping lanes and tankers and energy infrastructure, including in Saudi Arabia.

It has rendered Iran much more aggressive and repressive at home.

We have seen that every protest that has happened since maximum pressure has been met the brutality we have all seen on TV screens in the last few years.

I want to add, let's not forget about the fact that the Iranian people have been living under not just pressure from their own regime but also from the United States, and research suggests at least around 600 people have died as a result of shortages of medicine that the U.S. sanctions have caused.

Christiane: What is the option?

We know there have basically been in direct negotiations between Iran and the United States, the Europeans and other signatories to the nuclear deal.

President Biden was caught off mic not long ago saying this deal is dead.

Is it completely dead?

Is there any attempt?

I know you and other experts, Israeli activists and Jewish activists, have called for a different kind of engagement.

Can you walk us through that?

>> First, let me say as a proponent of the nuclear deal with Iran, it's hard for me to admit that the Biden Administration, the hardliners in Iran succeeded at what President Trump failed out, killing the JCPOA.

There's plenty of blame to go around.

The original sin was committed by Donald Trump but the abided administration hesitated in 2021 and in any 22, Iran miscalculated and lost multiple opportunities to restore the deal.

As we speak, I think the White House preference is for some kind of more narrow agreement, an interim deal, it would not become a problem in a campaign year.

Iranians are not interested in anything less than the JCPOA because even the deal itself did not benefit them economically as much as expected and a more narrow deal would not do that.

We are currently in a situation I described as no deal, no crisis, that I think the abided administration would want to extend until 2025, but there are two problems.

It is unstable and we are at the mercy of a single incident if Israel, for instance, commits another sabotage of an Iranian facility.

We might see significant escalation in ways that would cross a U.S. or Israeli redline, if Iranians enrich to 90%.

The second problem with the strategy is imagine we can keep a lid on it until 2025 -- then what?

In 2025, Iran would have 200% of the leverage it had in 2015.

It will not agree to a deal tilted more in the interest of the United States and it will probably ask for more concessions than even the next administration would be able to afford.

That's why think the time has come for new thinking, a different kind of thinking.

What we are suggesting right now is if you look at the current situation compared to 2015, in 2015, Iran had good relations with the West and was on speaking terms with the United States, but bad relations with neighbors in the Gulf region.

Now it is the other way around.

In that is an opportunity to make sure Iran can benefit from an agreement by encouraging economic incentives to go through Iran via the golf rather than from Europe and the United States.

In return, Iran and the Gulf cooperation Council countries could come to an agreement they would all except permanent limits on the level of enrichment, processing plutonium, and ratification of additional protocol, which ensures a high level of transparency in a permanent fashion.

Christiane: Let me put this to you, I've obviously interviewed quite a few people on this because it's getting, as you say, to a threshold level and rapid breakout level.

I spoke to the former Secretary of State, Hillary Clinton, not long ago.

It was also at a time, which is still the case, when many people around the world are very concerned that what happened in violating the human rights of Sony people in Iran during the women's protest, the dealings, sham trial's, crackdowns, none of this is conducive.

This is what Hillary Clinton told me about the possibility of negotiating.

>> I would not be negotiating with Iran on anything right now, including the nuclear agreement.

I think frankly that the horse is out of the barn.

When Trump pulled us out, we lost the eyes we had on what they were doing inside Iran.

I believe they started those centrifuges spinning again and I think it is unlikely that any agreement would be agreed to and I don't think we should look like we are seeking an agreement at a time when the people of Iran are standing up to their oppressors.

Christiane: That's a compelling case for not dealing with them at this moment.

You think that still stands?

Is that kind of feeling, and I understand it exists in parts of the EU as well, is it going to sort of rule the day at the moment.

>> The West can choose not to negotiate with Iran but it would not resolve the problem.

Iran's nuclear program is still advancing at the speed of light.

At some stage we would be once again faced with the dilemma of whether we can live with Iran with a bomb or, Iran.

We will get to that stage and less we can find a solution.

It is true that it is difficult to deal with unsavory, murderous regimes.

If we want to apply that logic, for instance, to the Soviet Union and say as long as the Soviet Union was engaged in relations of human right or a foreign policy that was problematic from the Western perspective, we would never agree to arms-control deals with them, we would be living in a much more dangerous world right now.

A regime like the Iranian regime that cannot be trusted even with pellet guns, as we have seen, it has blinded hundreds of peaceful protesters in the past few months, how can we trust this machine with the deadliest weapons out there?

I do believe that regardless of the nature of the regime, there is a need to find a solution to this nuclear crisis.

Christiane: Again, just to put it out there, Iran, everybody says, Intelligence says, providing drones and other lethal weaponry to Russia for its war against Ukraine, despite Iran's denials of that.

Seems that is going on.

You had very visceral protests like here in the U.K., this young man has been taken to hospital after a very lengthy hunger strike outside Whitehall, trying to get the Iranian Revolutionary guard named by the British as a terrorist organization.

You have quite a lot of resistance to any kind of dealings with Iran at the moment.

By the United States.

You've just explained why you would be more productive to do so, but how much do you think or how successfully do you think the new Iran-China-Saudi rapprochement can affect the current situation?

>> That's absolutely right.

The political price of dealing with the Iranian regime has skyrocketed the past few months as a result of the crackdown on protests.

As a result of Iran's provisional weapons for Russia's war of aggression in Ukraine.

No doubt about it.

But again, this was a murderous regime when the deal was signed in 2015, negotiations started in 2003, and the nature of the regime has not changed.

It is precisely because of the nature of the regime that we need to be able to curb the most dangerous activity it is involved in, because all of those other areas of concern you mentioned will be much more difficult to deal with if Iran has weapons of mass destruction.

In terms of the deal China has brokered between Iran and Saudi Arabia, I think the immediate effect is it could shield the gulf from another round of escalation between Iran and the United States or Iran and Israel and that is probably one of the key motivations on the Saudi side to finalize this deal.

And it is an opportunity to start looking at this issue from a very different Perspex if.

It is 20 years since the nuclear negotiations with Iran started and I am afraid the core bargain of the deal is starting to no longer be viable in the sense that Iran's nuclear program is to advance for temporary restrictions commit to alleviate concerns.

It is also 20 years we have failed in the West to deliver on effective and sustainable sanctions relief to the Iranians.

The permanent members of the Security Council plus Germany, that group is gone because of tensions between Russia, China and the West.

The idea of compartmentalization, of just tackling the nuclear issue and not touching on anything else, that idea is also gone.

It is really time for a strategic rethink in order to find a durable solution.

Christiane: One of the terrible victims of this, Iranian and American hostages wrongfully detained in Iranian jails.

I know you know one of the people involved.

You believe there is any appetite or deal underway to bring these Americans back home?

>> For the same reasons we talked about, there is a big price tag attached to doing a detainee deal with Iran I fealty Biden Administration is reluctant to pay.

We are entering into the electoral dynamics in this country and it will be hard to defend a deal like that.

I think what the Biden Administration is overlooking is there's also a price associated with not bringing Americans home.

By this point even the Trump Administration had an edged to do a detainee deal with Iran.

I think it would be very unfair to someone, like one person who has spent almost eight years in prison, to leave him behind just because the president is reluctant to pay a political price.

Christiane: You have talked about the viability of this regime, many during the women's protest believed it was the beginning of the end.

You have written and you compare Iran to the Soviet Union in the 1980's.

Here is how you describe it -- ideologically bankrupt, at a political dead end and incapable of addressing its troubles.

Fine, but it seems to have been like that for many years and yet it persists.

Where do you see any crack?

>> Correct, because I say this is a regime that is like the Soviet Union in the early 1980's and not the late 1980's in the sense that it still has a will to fight and a fearsome capacity or repression.

Tipping points could be around the owner because the Supreme Leader is 84 years old.

When he is not there I think we can have a very different set up at the top of the political structure.

The country is also dealing with problems that have accumulated for years if not decades and it's just not a sustainable formula.

But this is not a sprint, it might be a marathon.

The question is, what will happen to the Iranian people during this time?

If they are to continue to live under sanctions from outside, from under isolation and brutal repression from their own regime.

That is the question I think is as much the responsibility of Western countries to think about as it is the responsibility of Iranians.

We've had this experience before in Iraq, even when there was regime change through force from outside, the fabric of Iraqi society was torn apart in a way it was not easy to put back together.

Christiane: And still hasn't been.

Thank you for joining us.

Our next guest says elite Wall Street financiers are undermining the country's economy for their own benefit.

In her latest book, the Pulitzer Prize winning journalist Gretchen Morgenson traces the history of corporate takeover in the United States and the private equity firms that load new companies with debt.

Walter: Gretchen Morgenson, welcome to the show.

Gretchen: Great to be here.

Walter: Your book is called "These are the Plunderers."

Let me read something you wrote.

You say this is a book about modern-day plunderers, a relatively small group of financiers whose unrelenting pursuit of profits extract wealth from the many to enrich the few.

It is about a business model that is pernicious and growing and widens the wealth gap.

Pretty tough words, "plunderers, pernicious."

What is your goal, why are you so tough?

Gretchen: Trying to get people's attention.

In this day and age, it is tough.

What we are trying to do with the book, my co-author Joshua Rosner and I, is to open people's eyes to a business model that for the past 30, 40 years, has been growing in dominance and problems for the vast majority of people that come into contact with it.

This is now called the private equity industry.

Previously it was known as the leveraged buyouts.

Corporate raiders from the 1980s, of course.

It has grown into an industry that is so dominant that 7% of the American workforce works for private equity backed companies.

You have it in the retail industry, you have it very big in health care, which is extremely problematic.

You have it in fast food.

It is really very pervasive.

Walter: Explain to me what they do.

You said leveraged buyout.

These are people who buy troubled firms, is that approximately right?

Gretchen: It used to be.

In the beginning they were buying undervalued companies, companies the market was not valuing properly that were perhaps troubled, had maybe gotten into a financial scrape.

Nowadays they really are just buying companies with the goal of improving them, streamlining them, and selling them within five years.

Walter: You say improving and streamlining them, isn't that a great thing?

Doesn't that make the economy stronger and more nimble?

Gretchen: That is the concept and in concept it does make the economy more nimble.

With many cases in private equity, what they end up doing is taking a company that is not really all that inefficient and making it more efficient by firing workers, by stripping it of assets.

For instance, real estate under nursing homes is a very traditional tactic these firms to extract money from the deals they do.

Walter: Doesn't that reduce the value of the nursing home, at which point it would seem no reason a private equity firm would reduce the value of a holding.

Gretchen: Because they took the money out.

They get the money from the sale of the real estate.

That is them and their limited partners.

When the company bails, they don't lose anything.

Here is an example.

This is a perfect example, Carlisle bought this company, a very big nursing home operation.

A couple of years after the transaction, they sold the real estate under the nursing homes and got all of their money out pretty much.

They were now free and clear.

Then the company goes bankrupt.

They really don't pay the price if they do those kind of transactions.

They end up getting their money out, but the people who are left, the workers, the patients, the residents are harmed.

That's where you are seeing the first aspect of this business model that I feel really needs to be questioned and examined.

Walter: If there is a problem with nursing homes, isn't that the responsibility of regulators to make sure nursing homes are safe as opposed to depending on the kindness of investors to say we won't make as much money as possible?

Gretchen: Wouldn't it be nice to depend on the kindness of investors?

I know that is a dream.

Regulators are always behind one step or two steps, the very creative minds of Wall Street, I don't need to tell you that.

Regulation in nursing homes is very spotty.

You have state authorities involved, we have seen a tremendous number of problems with nursing homes that the regulations that exist have done nothing to prevent.

One thing I will point out about nursing homes, private equity has gone into them quite substantially.

An estimate of 11% of nursing homes in the country are owned by private equity firms.

That is probably low because you don't always know, these are secretive organizations and you don't always know who owns it.

But there was a profound study by academics at NYU, UPenn and University of Chicago that did a longitudinal look at mortality rates in nursing homes.

They found residents of nursing homes owned by private equity had 10% greater mortality rates over time.

Walter: Is there a cause of that or is that just a correlation?

Gretchen: They attributed it to a decline in staff, lower staffing, meaning lesser costs.

These people are looking for a profit orientation so they can sell the company after five or so years at a profit from what they paid.

They attribute it to lower costs given over to staffing.

Which doesn't translate to problems for residents.

Walter: One of the surprising statistics I saw in your book is a 40% -- am I correct -- of emergency rooms are owned by private equity.

Why would they go into that and doesn't it show a problem with emergency rooms?

Gretchen: It's not that they are owned by private equity firms, they are operated by them.

The hospital hires a staffing company to run the emergency department.

There are two very large staffing companies running emergency departments in this country.

One is Team Health and the other is Envision.

They are both private equity owned.

You have, along with smaller private equity owned companies, 40% of the nation's emergency departments are operated and run by private equity.

Why would they want to get in there?

They tell the hospital we will streamline this process, we will make more money for you and you should contractually us to operate for you.

The emergency room is a surprisingly profitable area of the hospital.

That is where you see private equity really honing its focus, where there are profits to be made.

That's why they are in health care to such a degree.

70% of gross domestic product.

It is a very large pool of potential money they can tap into.

Walter: You say health care is 17% of gross domestic product.

That is way larger than most other nations.

Isn't there some systemic problem with the inefficient, bloated way we do health care and maybe private equity is homing in on it because it is indeed a problem?

Gretchen: No one will argue with you on that.

Anybody tries to see a doctor, go to a hospital and it gets the bill will agree with that.

There are problems with the health care system in this country.

The problem is private equity is not making it better.

You may remember the surprise billing problem of a couple of years ago that both sides of the aisle in Congress actually reached together and did something about.

It was so outrageous that both Democrats and Republicans said we've got to fix this.

That was the creation of private equity.

Here's how it worked.

You go to an emergency department in your local hospital.

You think the hospital is in your insurance network.

You go thinking that because you are not going to have to pay as much pit you then -- as much.

You then get a bill from the emergency department, run by a separate private equity company, that is out of network, that ends up costing you way more than had you been in network.

That was a creation of a private equity company.

It was exposed by Yale, academics at Yale, and people were outraged.

So no, they are not generally making it more efficient.

Walter: In your book you write that "private equity firms would emerge from the pandemic and greater billions."

You say that COVID-19 made it easier to see.

What did the pandemic reveal about these private equity firms?

Gretchen: One of the things it revealed I think was the devastation in our health care world, in hospitals.

Hospitals were so unprepared for COVID-19 and the pandemic.

It is a really good microcosm of one of the problems with private equity.

Back in the mid-2000s, Congress asked for a study about what might happen in the country if there were a pandemic.

We write about this in the book.

The study, I think it was CBO, the Congressional Budget Office, said it would cause havoc.

We need to invest in ventilators we need to invest in hospital beds, we need to invest in equipment.

Protective equipment for staffers.

Of course, nothing happened.

We did not make those investments.

One of the reasons hospitals may not have made those investments, and health care companies, was because that was the moment when private equity started to go into health care, two do the streamlining they do so well.

To cut costs.

Not to invest in ventilators that would sit on a shelf.

These folks don't like money sitting on a shelf.

When you invest in ventilators and PPE and that sort of material, that is money sitting on a shelf.

It really was an interesting moment.

When COVID-19 strikes and we see there are not enough ventilators, we see there are not enough hospital beds, you look back at the study and say what happened?

Private equity is one of the things that happened.

Walter: Let me read you for the record, just statements they have provided to both of you since you have written the book and maybe you can comment on it.

One is from the Blackstone Group, one of the firms featured in your book.

It says "the false narrative underlying your book is based on the 1980s character of our industry contradicted by facts.

We are proud of the positive impact we deliver for investors, portfolio companies and communities, including adding 200,000 net jobs to our portfolio companies in 15 years."

They say their companies rarely fail.

Leon Black, his firm or what used to be his firm, Apollo, says it illustrates a misunderstanding of many of the facts surrounding transactions.

We strongly encourage you to not publish misleading information.

Tell me what you feel about that.

Gretchen: What is interesting about the Blackstone commentary, these firms say they create jobs they are not job destroyers, they add value.

That is their argument they create, they create money for pensioners that invest with them.

Let me go through a couple of those so we can talk about reality.

The spin is -- Blackstone says it created 200,000 new jobs over 15 years.

I asked Blackstone for the data backing that up.

Just as they asked me for the data backing up the questions I asked them.

They declined to provide it.

If you want to tell me you created 200,000 new jobs, give me the data, give me the numbers so I can verify it.

I thought that was interesting.

As far as the pensions and returns to pensions.

In the early stages of private equity, pensions were making more money through their investments with these firms.

They were outperforming the Dow-Jones, the S&P.

Now they are not.

What you have is a situation where you might be better off buying an S&P 500 index fund and paying a tiny fraction of the fees pay when you buy into a private equity firm.

Walter: Let me ask you a more general question as someone who has covered the economy and I mean this is a genuine question.

One way of doing it is hoping for corporations that are nurturing, that are good to not only shareholders but to employees and communities.

They don't worry too much about trimming every cost and making sure they have a skeletal staff.

It sort of creates that sort of enlightened capitalism we sometimes talk about.

Where all stakeholders benefit.

Another way is saying the American economy is stronger whenever we make things more efficient.

Companies that spend too much time focusing on things other than return on investment are making our economy weaker.

How do you balance those ideas.

Gretchen: I think the first idea you described is the goal.

I don't see why we can't try to make that a goal for American capitalism.

For the past three decades, we have been working under the assumption that if the stockholder benefit, that is all that matters.

That is what the CEO has to worry about.

The CEO will be paid if the stockholder benefits, and it has been a shareholder centric approach to capitalism.

I think you can agree that in that period of time, the gulf between rich and poor in this country has vastly increased.

I don't think that is a benefit.

I don't think it's the only motivating -- I don't think it's the only cause, but I think it is a cause.

During the earlier 1970s up to about 1985, the middle class in this country was growing in its wealth that it held.

It had a growing percentage of wealth.

That all changed around about the time that these takeovers started, pensions began to be obliterated.

You had to do your 401(k) yourself, which is very hard to do.

I think we look at that trajectory and say what has changed over that period?

A lot.

We had offshoring, companies escaping the tax system in this country by going overseas.

I think this is a piece of a puzzle and that's why I think it is really important to look at it.

Why can't capitalism improve the lives of all stakeholders?

Walter: Gretchen Morgenson, thank you for being on the show.

Christiane: Why can't it indeed?

Finally tonight, a coronation concert for the planet took center stage for a while.

20,000 people including the new king and queen gathered in front of an illuminated Windsor Castle last night for a show of music, theater, comedy and light.

Lionel Richie and Katy Perry had the royals dancing in their seats, and 1000 drones brought nature to life the skies around the nation.

It was the UK's largest ever multilocation drone show, a symbol of the King's devotion to protecting the environment.

A huge cheer went up one a massive blue whale appeared over Windsor Castle.

Celebrations continue today with a nationwide volunteering initiative called the big help out.

As you can see, even five-year-old Prince Louis has been getting stuck in during his first ever real engagement.

Tune into the show later this week for our conversation with the maid of honor to Queen Elizabeth.

She has attended two coronations.

We will hear about that and her amazing personal story.

That's it for the program tonight.

If you want to find out what is coming up on the show every night, sign up for our newsletter.

Thank you for watching and join us again tomorrow night.