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CNBC’s Andrew Ross Sorkin discusses how to get the economy back on track, with KKR co-chairman/co-CEO Henry Kravis, the man behind some of the biggest corporate takeovers in Wall Street history.

Video and transcript below:

henry kravis answering a question put to him by andrew roz sorkin whether the trust is broken between main street and wall street. he says, yes, it has. the worst financial situation since the great depression but still optimistic. let’s listen in. the financial community has to improve the image. the financial community has to be much more transparent than ithink they’ve been. that’s everybody. venture capital, you name it.and it’s only then when you start working in partnership andinstead of everybody pointing fing earls that’s how we get it back on track. is it deserved, though? is the blame deserved? you think of the inequality. something that worry you or overstated?look. there is an inequality in this country. no doubt about it.there’s people suffering and should be earning more moneythan they are. and then you see — and it’s not just the financial side. it’s a lot of corporations where ceos paid enormous amounts of money through the stock options or through big bonuses, et cetera. and so, we do have to pay attention to it.but — how do you think about it? your business makes a lot ofmoney. more than most traditionally. how i think about it is iwant to make certain everyone at kkr, that’s our business.everyone is a participant. that’s how we have it at kkr. thank you for having that because it’s surprised people that when we started kkr in 1976, george, robert and i had a vision that it was important for us to share everything we did. and it didn’t matter whether you were a partner at the firm or you weren’t a partner.everyone was going to participate in all fee income and all carried interest. that included secretaries. that included people in the mailroom, everybody at the firm. fast forward 36 years.everyone at kkr is an owner. we went public and did it through an interesting approach, by merging our partnership in to kpe, the public vehicle that we had set up and it came with about 5 billion of assets, we said to everyone, every one of you are going to be owners at the firm and i’m sure a lot of them saying, yeah, sure, i’ll believe that. it’s important to us and the only way in my view you build a firm and a lasting firm. i they lot of people, andrew, quite frankly, surprised when it turned out that george and i didn’t own what everybody thought we owned. we didn’t own that much for a reason. we didn’t own that much becausewe wanted to make sure that we built a lasting firm. and everybody’s an owner. as we move off the issue of politics, there’s one last elephant in the room when it relates to this and that’s the subject of carried interest and i know that you have talked about the need for tax reform more broadly. but on the specific issue of carried interest, do you believe that it is quote/unquote fair? i’ll come back to exactly the answer i gave once before and i haven’t changed my view. we need to change our tax code. we need to change the tax system and we have to have a system that’s very much focused on pro-growth and pro jobs and if we do that, then everything should be up for grabs.that includes carried interest. that includes any other type oftaxes. and everything should be open. and have a discussion.you can’t pull out and i don’t think you should pull out just private equity. and so to my way of thinking, you really have to look at the overall. the biggest beneficiary of carried interest is not private equity or edge funds but the real estate industry. do you think today is the time to start, you know, raising taxes in the real estate industry? i don’t. but that’s not my point. my point is let’s change the tax code and make it pro growth and pro jobs. an earlier panel about pension funds and we have talked about the pension crisis.ma ny of the lps in this room and pension funds and there’s a pension crisis that we’re all trying to confront.when you think about the situation that we are in and you think about the type of returns that you’re hoping to deliver alpha to, in terms of resetting peoples’ expectations, i know larry talks about the new normal. what is the new normal in your mind? well, the new normal, first of all, is relative to what? you know, if interest rates wept back up and treasuries weren’t 1.5 and 10-years up to 5 it’s a spread over that in private equity, for example. now, historically, we have been fortunate and for 36 years we had an irr gross of 26%. compounded with 57-year hold. today, we wouldn’t tell anybody to do 26%. i don’t think that’s — what’s a realistic goal today? look, a realistic goal issome 700 basis points for private equity in our view of abenchmark. whatever you want. but take the s&p 500. we should be able to year in and year out over a period of time we will get our investors 700 basis points over s&p 500. henry kravis talking about the new normal and what you can return to the investors. how to reform the tax code in to a pro growth and pro jobs tax code and also talking about the fact that the trust between wall street and the financial services industry and main street has been broken but it can be repaired. keep in mind that you can get more on delivering alpha on cnbc.com.go to the website. they have continuing coverage all day.