Decadence Or Renewal? Envisioning Competent Government In America

- Welcome to the Hoover Institution. Welcome to the Schultz Auditorium. Welcome to this conference that we're holding here on decadence or renewal about how to envision competence in American government. The basic idea here is that there is a nonpartisan and bipartisan agenda that has to do with how well America is governed regardless of what it is you want the government to do. It is a premise of this conference that a major part of the erosion of trust and free government across the entire developed world is a consequence of the sense that government just doesn't work very well. It doesn't work very well, even in doing the things we agree it should do, and that somehow we need more powerful leaders, leaders who can strip away all the petty fogging procedures and get stuff done because ordinary government in a pluralistic society can't. It is ironic that this feeling should be so salient in the United States of America since not so long ago the United States of America was regarded by the whole world as the paragon that proved democratic government could get stuff done in the middle of the 20th century. I think it is no exaggeration to say that the United States of America and its officials was generally regarded across the world as the most competent government in the world. That is when it came to can-do spirit and get stuff done, whether it was the largest arsenal of democracy in the world, whether it was feeding millions of people who were hungry, whether it was building atomic bombs, launching gigantic amphibious invasions, building airfield just about anywhere you could imagine them, and several places you couldn't. Launching Berlin, airlifts and Marshall Plans, highways, road, railroads, universities. It did look like the United States could get stuff done. There was the sense that, oh, the Americans aren't so ideological. They're very pragmatic, can-do sort of people. I, I think it's fair to say this is not our worldwide reputation today, and it's that gap that's the subject of this framing panel where we've got this magnificent group of historians to help us kick off that discussion. The first of them that you'll hear from is Mark Dunkelman. Mark is a senior fellow at the Searchlight Institute. He's a fellow of Brown University's Watson School of International and Public Affairs, and he's a senior fellow at NYU's Marion Institute of Urban Management. He's worked for more than a decade for democratic members in the Congress and both the Senate and the house side. He's worked at the Clinton Foundation, so he's approached the problems of government from a number of perspectives inside and out. Joining us then is David Kennedy. David's very well known to people here at Stanford. In fact, he comes here having done a lecture for the Stanford Historical Society, having been at Stanford off and on since the time America had that can-do reputation. It's interesting how the history of Stanford University itself, in a weird way kind of dovetails the rise of this reputation and its persistence today in the tech world. If you think about when Stanford really took off as a top tier university in the late 1950s and early 1960s, very much as a spillover of the defense and aerospace revolution that America was leading and David's been in a good position to watch all of that as a historian, as a winner of the Pulitzer Prize. His work has chronicled, chronicled, and for many people is still the standard work on much of the first half of what people called the American century. Jennifer Burns has looked at this from yet another perspective. Jennifer is a professor of history here at Stanford. She's also affiliated with the Hoover Institution. She's approached this as a student of American society and American history generally, but using the life and times of a couple of key thought leaders as a way of illuminating all the great issues about the scope of government. Her biography of Anne Rand followed more recently by her Prizewinning biography of Milton Friedman and his life in times have obviously given her a certain perspective on what a lot of different people thought government should do. So we'll start with hearing first from Mark, then David, then Jennifer. Then we will talk a little bit here on the stage. Then open the floor to your questions Mark.

- Thank you and thanks for having me here. I'm thrilled to be here. I'd like to open it up by arguing just as a framing device for our conversation today, that rather than think about American history through the lens of whether we move right or left, we should view history through a tension between two different ideas, which are both indelibly American and that span across the ideological spectrum. The first is what I call a Hamiltonian impulse. A Hamiltonian impulse, as you can tell, derived largely from Alexander Hamilton is born from a notion that we all have, that in certain situations we have, we face what, what would be called a tragedy of the common. The notion is that we find some sort of challenge in our community, in lives that we ourselves cannot solve alone. We don't have a sewer system, we don't have a good transit system. We don't have a a functioning school, and we need to collectively take the power that we hold individually and invest it in some institution above us that will solve that problem for us, build the sewer, erect the school, what have you. That was Alexander Hamilton's vision when he, in the early days of the Republic, argued for essentially a, a very powerful centralized government believing that America was a Hercules in the cradle, and that to harness the potential of the American dream, we would need to have centralized authority that could make big decisions quickly. At the same time as everyone who has seen Hamilton knows there's a different American tradition, which I call the Jeffersonian tradition. The Jeffersonian tradition derived from Thomas Jefferson is born from the notion that the problems in American life aren't born from a lack of centralized authority, but they stem from centralized authority itself. A fear that some powerful institution above us is imposing its views on ordinary people who should be able to make those decisions on, on their own. And throughout American history, the sort of the cry of freedom comes from this notion that we are being oppressed by whether it was the monarchy in the early days to some other form, whether it was Jim Crow laws. So you can, you can, you can run through the, the, the, the the list of oppressive forces that exist in American society and that throughout our history we've had to balance the impulse in some cases to push power up as Hamilton had wanted to do or to push power down as, as Jefferson wanted to do. And the these two impulses span across the political spectrum. The narrative I think of the last 125 years is that the outset of the industrial Revolution, we looked at the sort of the disruption brought by the railroads primarily, but then by industrial trusts, and there was a fight within the progressives, but across the political spectrum about what to do about it. And one view was a Brandis view born from the Jeffersonian tradition, which was that we should break up the big businesses and keep things small so that people can, people were, were able to, to live the 19th century dream that they had had. And the other was born actually sort of more from Felix Frankfurter and stemmed from the Hamiltonian solution, which was to push power in and up into big institutions that could do big things. At the outset, the Hamiltonian tradition really prevailed, and you can see that and we'll I'm sure explore this later, probably most iconically with the Tennessee Valley Authority. The Tennessee Valley Authority born in the early 1930s was derived because the big utilities in the upper south had refused because it didn't make sense for them economically to string wires to the poor farmers who lived in the Tennessee Valley. And Roosevelt in the early days of administration determined that he was going to fix this. So he invested authority in a Tennessee Valley authority run by essentially a single lawyer named David Lenal, who made massive changes across that valley, stringing wires, reforesting hole hillsides building dams, and had almost no person who could stand up to his authority. He could make those decisions centrally. And that became the iconic sort of for, for for many in government, the iconic original institution to Philip's litany of institutions that could do big things. They could, it was the TVA A was a, the, the, the, the Marshall plan was a TVA for Europe. And in all sorts of different circumstances, that was the model that we would use. We would take a Hamiltonian solution to a big problem by investing power in a centralized authority. Then we realized in the late sixties and the early seventies that some of these Hamiltonian, so solutions were less beneficial, if not corrupt and antithetical to the American ideal. We saw in the Vietnam War, in the, in the Urban Renewal program in a whole series of different challenges, that centralized authority in many cases was not the benign instrument that David Lal had tried to wield in the Tennessee Valley was in fact nefarious. And so the Jeffersonian impulse, which had been sort of brushed aside during many of those early decades, takes a new purchase in American life. And there are a whole series of efforts over the course of the last 50 years to put checks on that centralized authority in the sense that we don't want another Robert Moses to borrow from Robert Caro's, the power broker. We don't want Robert Moses running around America. And there was legitimate criticism of the old Hamiltonian system and a need to correct for the abuses of, of the, of the, of the apex of Hamiltonian during the deal and great society. But we've now come to the point where the Biden administration invested $7.5 billion in a new program to build electric vehicle chargers across the country in places where there aren't electric vehicle chargers. And at the end, as he left the administration, he built 58 simply not a competent government. And as you look more deeply into why that is, it's not because there wasn't a David Lial appointed to run that program, it's that over the course of the last 50 years, we've inserted so many checks, so many Jeffersonian checks into the system that nobody, no matter how gallingly audacious as Robert Moses was, has the capacity to be able to work through those checks and balances without getting foiled. And so the challenge I think in this conference, and I hope in the conversation now, is to find some way to balance these two impulses in a way that allows us to get things done without inviting abuse from centralized authority. And I just hope that that can be a framing device for the conversations that follow. Thanks.

- Thank you, mark. David, over to you.

- Well, I know that my remit is to talk about American examples of competent government, and I will address that shortly. But as I began thinking about this subject, my mind fixed on a couple of things. One was to take seriously the relation between the two key words of the subtitle for this conference, competent and government. And I dare say that the latter word government is often spoken in this building if it's spoken at all as some kind of anathema. So I salute the organ factors of this gathering for taking the subject head on for me. There's no better summary, at least in the American cannon of the essential meaning of that word government than what James Madison had to say in Federalist Number 51. He famously said, if men were angels, no government would be necessary in framing a government which is to be administered by men over men. The great difficulty lies in this. You must first enable the government to control the governed and in the next place oblige it to control itself. So when we talk about government, we must recognize at the outset we must concede that we're talking about humankind's fallen nature. And we must also realize that a foundation, a foundational truth, that when we abandon the state of nature where life is solitary, poor, nasty, brutish, and short to reap the benefits of society, we accept as a necessary part of the bargain that we will seed some measure of individual autonomy to government as the agency that makes society livable. So the trick as Madison reminds us is to find the balance point between the government's proper sphere of authority and individual liberties and prerogatives. So I believe, I think in agreement with Mark, that there is a peculiarly American flavor to the eternal controversy about where to locate that balance. And again, I'll come to that in just a moment. But I'd like this briefly to dwell on the second item that intruded itself on my attention as I thought about this subject and this conference. It's a cultural artifact that's nearly seven centuries old. It's a set of frescoes in the Penso Pubco in Sienna, Italy long this attributed to Simoni martini, but now generally acknowledged to be from the hand of his contemporary safety. There are three frescos. Many of you in this room may have seen them. Two represent respectively, allegories of good and bad government. And the third is the effects of good government. So let's focus mainly on the first two. Its most important figure is justice. And she appears surrounded by representations of virtues like fortitude, prudence, and tellingly. Grazing upward to the figure above her is a figure representing wisdom. No less importantly, she sits atop a plaque labeled Concordia or harmony from which a court extends through a procession of citizens, each of whom grasps the cord by hand, not tied or bound by the cord, but voluntarily taking hold of it, which I take to be a reminder that legitimate government rests on the consent of the governed, not simply the submission of the govern. And the legitimate government implies a social contract in which individuals understand that they are willingly self-limiting to some degree in order to reap the benefits of collective life. And if the implication is among the many implications is that compromise is essential to orderly social life and to competent, effective government. And those benefits are richly depicted in the fresco showing the effects of good government there in the Poso Publi Co, where pro prosperous citizens engage in mutually beneficial commerce, the arts, and even in one scene dancing in the streets. Now for viewers of the frescoes, the lesson is driven home on the opposing wall where we see the allegory of bad government. There we see crime and filth and disorder and fields and buildings and disrepair presided over by a cross-eyed horned and fanged figure labeled tyranny. And he is surrounded not by virtues, but by vices, including avarice vain glory and fraud. And above him is not wisdom, but pride and a plaque that reads because each seeks only his own good. So what are we to take away from this brief and amateurish excursion into art history? Number one, just a reminder, government as Mark also reminded us, is a collective enterprise. Secondly, and my argument is that good government is downstream, as it were from culture, from a recognition by the governed that certain virtues and shared values are essential to the legitimacy and functioning of political authority. Third, that the elements as well as the vulnerabilities and the challenges of good government have been recognized for centuries, if not millennia, and that we do in fact have something to learn from the historical record of serious thinking about these matters. So let's turn to the American case. This audience does not need to be reminded that we as a people have long been wary of government authority. Thomas Jefferson observed in 1787 that there were three forms of government. He described the first one as without government, as among our Indians. And then he went on to say, it is a problem not clear in my mind that the first condition that is no government at all, as among the Indians, he thought is a problem not clear in my mind that the first condition is not the best, but I believe it to be inconsistent with any great degree of population. And here he foreshadowed a discussion that assumed a great valence and urgency about a century later, as Mark has indicated again more about that in just a moment. And you can cite examples on infinitum of this notion, Henry David Thoreau, that government is best, which governs lease, often attributed Jefferson's actually Thoreau or Sam Houston as he left the governorship of Texas admonished, the Texas legislature govern wisely and as little as possible. And to take a more recent and perhaps more provocative example, Ronald Reagan in his first inaugural address declared that government is not the solution to our problem, government is the problem. And here we might pause for a moment and ask, and I think this conference will explore the idea of how and why it is and under what circumstances that a traditional concern for limited government can edge over into outright hostility that can paralyze government two core. So let's just briefly visit, as Mark has already done some historical episodes that might form the basis for further discussion of our subject competent government. Let's start with the so-called late 19th century gilded age. Our esteemed colleague, colleague Frank Fukiama, lays heavy emphasis on the 1883 Pendleton Act that created the competitively composed and professionally qualified federal civil service that transition from the so-called spoil system that it staffed federal offices for the 16th. For the early part of the 19th century, FMA argues saved the United States system of governance from chronic incompetence and made possible a more or less orderly transition into the modern era. Now believe me, I have nothing against the federal civil service. My own father was a federal civil servant and he discharged his duties with a commitment and conscientiousness as if he had taken religious vows. But let me remind you that just five years after the Pendle neck passed James Bryce English visitor, sometimes compared to the Alexis de Tocqueville for the scope and depth of his analysis of American society published the American Commonwealth. And one of its most incisive chapters was entitled Why The Best Men Do Not Go Into Politics? And here we have a reminder that competent government is more than a matter of staffing the agencies with committed and conscientious technocrats as important as the Pendleton Act, was a more meaningful embrace of competent government came a generation later, in my view, in the much debated progressive era customarily associated with the presidencies of Theodore Roosevelt and Woodrow Wilson. And here I take competence to mean the emergence of governmental institutions and practices, and I dare say statutes commensurate with the complexity and scale of the rapidly industrializing and urbanizing and ethnically diversifying side society. That was early 20th Century America. Examples include the Meat Inspection Act, the Pure Food and Drug Act, the Federal Trade Commission, the 16th and 17th Amendments of the Constitution, creation of the Federal Certain Reserve System, just to name some conspicuous examples. But I mean something more here and I hope we'll have a chance to discuss it over the course of this conference. What I'm pointing to is the modeling and sustenance by political leadership of the concept that the predicate of competent government is legitimate government and reciprocally that among the important tors of legitimacy is competence. There's a two-way relationship between the two concepts, and I would claim something similar about the next great round of modernizing government. Mark has already mentioned it, commensurately with the scale modernizing government commensurate commensurately with the scale and complexity and crises of the mid 20th century. I have in mind, of course, the New Deal, the 1930s. Now, again, believe me, I'm not unaware of the persistent controversy about the legitimacy of new deal initiatives. I was vividly reminded of that last spring, a four day symposium in Miami about the New Deal sponsored by the Liberty Fund, which had something of the flavor of an attempted exorcism. But I think it's defensible to argue that the government that emerged from the New Deal was competent enough not only to build the TVA, but to wage and win a great war and to build the lattice work of reforms that underlay the greatest su sustained period of economic growth in the history of the Republic. And under wrote as underwrote as well, a feeling of social comedy that facilitated at long last, a second reconstruction that brought at least a measure of meaningful fulfillment of the broken promises of emancipation a century earlier. So that brings us to the 1960s and the of civil rights and the great society. It seems to me, and again, I think Mark has already hinted at this, that there is something qualitatively and consequentially different about the 1960s, something that distinguishes governance in that era and ever after, from the more or less settled legacies of the progressive and New Deal eras. And it's that context that makes understandable, and for his purposes politically useful. President Reagan's dictum the government is the problem. So I'll leave it to my colleague, Jennifer Burns to dilate on that observation if she chooses. But I will close by citing Robert Putnam's recent book, the Upswing, which locates in the 1960s, a truly remarkable convergence in sector after sector of American life of swings away from what might be broadly called communitarian values toward more individualistic, even antisocial values among others, knew something about the implications of such a shift.

- Thank you everyone. Good evening, and thank you to my co-panelists and to Philip for inviting me here today. Philip gave us a few prompts, as you heard. He noted we used to be regarded as having a can do government that could accomplish many extraordinary things, and asked us panelists to reflect on some questions. Why did we seem to be able to do so much back then? What seems to have changed and what strengths do we still retain? So I thought I would dig in a little bit in the limited time that I have to this question about what seems to have changed and focus as, as is starting to happen with my co-panelists on the 1960s. I think that is a key transition moment. So when I think to myself, well, what has happened since the 1960s on this question of, of competent government, I have to say that much of the narrative I have comes from people in this room, some of it from Dunkelman's book, why Nothing Works, which offers, if I could condense it into a nutshell that our Hamiltonian government was overrun by a Jeffersonian concern for individual rights, that sort of like the liens tack down the giant with a a million small rules, or I've also been enlightened by Dan Wang's terrific book, which tells us in a nutshell, we have too many lawyers. Perhaps we already knew that. But nonetheless, I, I recommend his analysis of the, the comparative orderliness of the United States to the engineering mindset of China as a, as a quite revelatory distinction to make. But if I'm asking what is my take as I synthesize these, one thing I tend to think about is that we have come into and maybe started in the 1960s to come into the maturation of the administrative state into a different sort of growth phase of it, in which questions arose about its legitimacy. And I think one of the helpful things that Mark Dunkelman's book does is remind us those questions about legitimacy. Were not simply the province of conservatives or thinkers or activists on the right, there was a very strong critique from the left as well. So, so it's around the 1960s and then decades after that, the broad project of administrative governance begins to lose some of its legitimacy, a sort of slow erosion over time. And in part it's because the administrative state comes to be seen as a progressive political project. And it's fortunes come to be very much tied to that political movement or identity. Which brings me to the question of today, which I think is really most pressing for the conference, is how does the state regain its legitimacy? Could the administrative state be coded or recoded? Its bipartisan or conservative in a way that would open the door to a new era? And I think that it will have to, in some respect, if it is to survive, to prosper, to be refound in the wake of the changes of 2025. Now, I think there's a real challenge and an opportunity here simply because we live in an unprecedented era of public visibility and public feedback. Nothing is hidden anymore. Everyone is out there, everyone is posting, everyone can run their own data and share it quickly. And our institutions are simply not built for that. They're built for a different culture, a culture of deference, a culture of not knowing, a culture of distance between the government and the people that it affects. It is simply not there anymore. So I think there is an opportunity to rethink about how would you design organizations of governance, structures of governance in an era where everyone can see everything or you cannot lie, you cannot hide, you cannot disassemble as you might have done before, a sort of era of radical transparency. Now, Philip asked us to sort of use history as, as a learning tool, which as he knows is quite a perilous venture. But I will nonetheless throw out some episodes that I think might be important for us to think about on the question of credibility and how a governing institution might regain it. Once lost, I think a very informative case study would be the history of the Federal Reserve system in the 1970s. It suffered from a severe lack of credibility. This was in fact one of the drivers of the extended episode of inflation of the 1970s, as people simply did not believe that the Federal Reserve would address the problem in any meaningful way. Now, the institution recovered. Until recently it was considered politically untouchable, right? Its independence sacrosanct to our prosperity. So, so what, what happened? How did the Fed recover its reputation, its public profile? Well, in part, it's a story of political courage. The political courage of Paul Volcker and of Ronald Reagan. In part, it's a story of a clear mandate. And the Federal Reserve continued to operate with a dual mandate. But Paul Volcker made it clear that tackling inflation was a priority, and then the Fed learned to operate with more increased transparency, quite a departure from that time of the 1950s when it did what it wanted and answered to no one, it began to drew draw on research on a strong body of academic research about what monetary policy could and could not do. And it built research streams into what is still a profoundly political institution with its leadership subject to political authority. And ultimately it worked. The Federal Reserve was able to staunch the rising tide of inflation and create a relatively stable price level into our own day. So to summarize, expertise was given political cover, which brought it time to work in a limited and targeted field where the government's capacity and its task were very clearly delineated. Now, I could go a little bit deeper and talk about the Fed's shift to more of a rules-based framework over a discretionary framework. And I think that's another potential way to think. The institution regained legitimacy when it communicated why and how it was making decisions and how it would measure those decisions. Now, perhaps as an economic institution with a limited ambit, it has limited applicability more broadly. But I think nonetheless, the recovery of a reputation, the recovery of a reputation for competence and the recovery of actual competence is an example that commends itself to us. So two other examples I'll just put on the table. One is that has come up recently in discussions of where the federal government is. And this is operation warp speed, a private public partnership reliant upon a great accumulation of government funded, funded expertise and research that nonetheless got us a vaccine for COVID-19 in absolutely record time, unthinkable time. And I think this brings us to one of Philip's questions. What strengths do we still retain unless we get too pessimistic? I think this is an example of the strengths that we still retain. I would add another one, the 1969 Moonshot, an accomplishment that has given as a new vocabulary word, the moonshot, to shoot for the unthinkable and maybe to get there. Now, this was driven as was operation warp speed by a sense of crisis. And we all live through the crisis of the virus. But we have to recall the crisis of the Soviet arms buildup of the nuclear arms race, the crisis of Sputnik, that the Soviets are outstripping us. This created a similar desire, a similar fear, and a sim similar willingness to try to move forward in a new and different way. Again, this technological innovation built on decades of federal spending, federal spending on defense in this case, what is common to both, both had a crisis, both responded to a crisis, a fast crisis, or a slow moving crisis. This crisis in turn brought out a real leadership capacity. In both cases, presidents of the United States identified these as a goal and were able to move quickly in some cases staking their public reputation on it. Now, what is different, most clearly is the impact these successes had on the broader society. Try to imagine feeling, again, the wonder and excitement of the first man to walk on the moon. A whole generation of children wanted to become astronauts because of it. And compare this to the social division we face today over the question of vaccines. So my ending provocation would be, let's keep that moonshot in mind. Let's think about what it would take to do it again. What would our era's moonshot look like? Thank you so much.

- Thank you, Jennifer. This is a good moment in this transition to the conversation where I wanna mention the co-organizers of this conference. I'm, I'm actually the representative of the lawyers. I've also worked in government some, and, but in a way we, with Frank Fukiama as a co-organizer, we've got someone who has thought broadly about both history and philosophy over a span of thousands of years. Time, an exemplar of timeless wisdom is frank. But then we also have Jennifer Polka. Jennifer is quintessentially modern. She emerges from, I know her friends probably don't think of her this way, but she, she emerges from the tech sector. She's part of the cool generation that's and actually emerging out of private success, private tech success, who then confronts the government and throws up her hands and says, can we do better? So in a way between kind of my linkages to a little bit of both Jeffersonian and Hamiltonian and Frank's timeless wisdom and Jennifer's can-do spirit animated by the reigning culture of the age. I, I think the co-sponsors of this conference are trying to pull together a pretty broad ranging conversation about, as Mark put it in the title of his book, why Nothing Works. I want to add this one thing before transitioning in, and this is very important and really hearkens back to what David was saying a few minutes ago. So last week Hoover held a big fall retreat, you know, where hundreds of people here, our donors, all that, at that retreat, Condi Rice, our director, announced to these hundreds of people that Hoover is embarking on a major new project, which we're calling The Commons Project. And we had actually a big talk Aon at the main dinner of the conference where Condi, Neil Ferguson and I were on stage. And Condi explained right up front that even that we're all focused in this commons project on what comes next. That is, we think the basic system, the world system, the global commonwealth system that Condi and I worked a little bit to help create at the beginning of the 1990s is gone, is down and is not coming back. We are currently in a period of turmoil with elevated risk, and the risk trend is rising and the focus of our institution at this generational moment has to now really turn its attention to what comes next, not next week, but a little beyond that the conversation we're having here is part of that. So I just framed that as if it was a world order problem. But what Condi then drew out is what we're seeing across all of the free societies is the challenge of defining, as she put it, a new social contract, hearkening exactly back to the themes that David was drawing out as he in turn did his little excursion into art history. And part of that new social contract, indeed, is whether or not government can work to borrow Mark's expression. And a point that came out of that discussion. And actually at the very end, I was asked a question from the audience, sort of, you know, what can we do? How should we think about this? And actually my answer to that was, look hard at our relationship to the technological transformation that what happened, we are now in a period of history akin to a period of history over a hundred years ago in which the country is being transformed by transformation. You could call it technological, but of course it was transforming every aspect of society, the urbanization, industrialization, everything else. It's not merely technological. So the premise could be we are actually in another period like that of transformation in a new era of world history on that scale. And as in that period, the success of governance in adapting itself to those changes and indeed being a way of making those changes work for people in rea attaining the sense of wonderment that Jennifer so beautifully alluded to, but in a positive way that actually may renew the social contract, could actually be an important theme for us. And in that theme, it's clear that the sheer competence of government in mapping these in, in adapting to these transformations, is very quickly gonna go beyond a lot of the litmus test stereotypes about whether government should do this or that thing. What this is going to mean for the whole future of education, for the whole future of healthcare, for the whole future of defense. And when we could just go on and on, even for the sense of what it means to be human is gonna be really important. So I'd like can invite the panel all three of you in a way now to as historians and having thought a lot about the way we adapted to these past transformations, to reflect a little bit on kind of when and how society recognized it was going through something that was, that they were, they were in a special era, unlike the eras of the past. And that in deep ways, they had to adapt.

- Well, my, my candidate again in the American context would be the so-called progressive era that I think all of us have alluded to. And I think of the work that put the distinction or the relation between Hamiltonian and Jeffersonian constructs into play was Herbert k Crowley's famous book of 1909, I believe, the Promise of American Life in which he talked about the need for Hamiltonian means to Jeffersonian ends. And I think also of Walter Lipman's famous book, 1914 Drift and Mastery Articulate identification of exactly what you're talking about. That we are living in an era of unprecedented complexity and interdependence and our organs of governance are not commensurate with that. And we need to create new institutions and new values in order to have a civil society that is livable by all of us together. So I that that, that me was a moment, which I think much of the vocabulary and syntax and grammar of modern American politics was first developed, and it hasn't always been effective ever since. But that, that was a transformative moment, at least conceptually.

- Jennifer Mark, do you have any comment on that?

- No, I, I appreciate that. I think that that's an insight I was thinking even a bit earlier, less in the, maybe you're talking about the grammar and the syntax as a certain stage of crystallization that then makes it possible for the political system to engage these questions. I myself, think more was thinking more about what is kind of bubbling and in ate and unorganized. And so if we think of mass immigration as one of the challenges and industrialization, this starts way before 1913, right? And how is it addressed? It's addressed locally. There's a rise of the boss system. There are social movements about temperance, let you know, let's try to change people's lifestyles. There's a variety of societal responses and sort of counter movements to the movement of industrialization that percolate along for a while before they are channeled into the political system. So I think when I think about our own era, I feel that because so many of the new technologies have been deployed for political ends, it's hard for the political system to feel willing to engage them. In other words, if you have built your political career on using social media technologies, why would you do anything to change how they operate if they've benefited you? Right? And so I think, I think there's an interplay between now we see ourselves coming into more of a rivalry geopolitically. And so maybe some of the benefits you've got from trade are now being reassessed. But I do think we are maybe in an earlier stage than having the syntax. I mean, maybe we're trying to get the syntax here, but I think we're still kind of in that earlier stage. We're trying to figure out what are the problems and what solutions need to be supercharged by something beyond the sort of spontaneous social processes.

- My reaction is, I, I think you're absolutely right. The, the, the central question that we're trying to grapple with here, it seems to me is who should decide stuff just generally, you know, my, my wife gets home on Friday nights from work, and so she doesn't wanna cook. And I say to her and to the two, our two daughters, let's go out and that's great and everyone's excited. And then we get into the conversation that every parent knows is a complete nightmare, which is, where should we actually go to dinner? And my 6-year-old wants donuts for dinner and my 9-year-old will only eat chicken sandwiches and my wife wants, you know, unseasoned quinoa or whatever it is that she likes. And, and the question is, in that moment, how do you get to a decision that was the problem essentially, that the drift and mastery that Walter Lipman, that Herbert Crowley, that a whole variety of people were trying to grapple with at the turn of the 20th century. We had machines and trusts and they were making decisions that weren't in the interest of society as a whole. And it seemed at that point as if the only answer was to push power up into institutions that would incorporate all of our concerns. Then we get to a point in the 1960s and seventies where it seems like that establishment that we've empowered is actually doing things that are counter to the public interest. And so we put, I think your, your, your Lil Putin example is exactly right. There was, there was discussion of making that the cover art of my book, that, that, that, that, that, that is the notion. And so now we we're at a point where I, i, we we're talking about maybe we are in a, a, a new stage of world history, but we have this simple question, which is yet unanswered. Who should decide stuff when you've got a bunch of competing priorities, we're gonna, we need to, we need to find some way to build a transmission line from clean energy to the place where it will be expended. Sh sh sh we need to build a transmission line. Should it, should it go through the pristine forest? So we're choosing between clean energy and using it and, and be spoiling a, a beautiful forest that's like, who, who should decide. And if we, if we can come out of this conference with an answer to that question, I think we'll, we'll, we'll have succeeded

- Philip. Alright, Philip, let me just share an anecdote with all of you. I was in China several years ago and I rode the high speed rail train from Beijing to Shanghai and back again. And I happened to run into a Chinese friend after I'd come back and he said, where have you been? I told him I took this high speed rail down to Shanghai and came back. How was it? I said, it was wonderful. It was antiseptically clean, quiet, hugely efficient, great service on board, 200 miles an hour, whole trip, five hours down, five hours back. Wonderful. He said, well, why don't you stay in our country and ride some more of our high-speed rail. We have 15 of them. I said, well, I have to go home tomorrow. He said, well how many high-speed rail lines do you have in your country? Well, I just give him the honest answer, none. And of course he said, well how can that be? I thought, here's a teachable moment. I gave him a little mini lecture on the nature of our whole government system and the DNA, as you phrase, you often use Philip that underlies it. How we set up a system in the eight, late 18th century where power was difficult to exercise from the center, checks and balances the federal system. We dispersed decision making authority in all kinds of ways 'cause we're very wary of rule from the top. And he looked more and more puzzled as I was going on thinking, well maybe I'm using the wrong vocabulary and I using words he isn't familiar with or it's too exotic a concept. And at suddenly at some point his face kinda lit up. He said, oh, he said, I understand the problem is your system, so why don't you change your system? He said, we've changed ours several times in the last a hundred years. Why don't you do the same? Well there's your new social contract on steroids. But it is a systemic problem is my point.

- It's so interesting, actually, one of the great Chinese political philosophers, so Leon Chow in the early 20th century was fascinated by actually the American work by John Dewey's work by the work in the progressive era. And as time passed, I was actually was disappointed. He was very disappointed with the way American political science started developing from, from his point of view because it was actually getting away from, you know, the, the, the problem solving mindset that he had admired so much in the early, in the early part of the century. Alright, let's throw the floor open to your questions right there. I see a hand,

- My name's Dan Carpenter, I teach government at Harvard, I chair the department and the lorenzetti frames are in the chair's office. They've been there for at least two or three chairs. Now I learned a lot from this. I'm taking notes, but there's a, i I think a missing variable, not that you necessarily neglected, but maybe you just didn't have time to include. When I think about the progressive era, and I agree that, that it's at that moment when whether or not we agree with what the government was doing, we can say that the government was doing that with relative competence. There were European visitors at the time that thought that the Department of Agriculture actually was basically the most efficient and modern administrative organization on the planet, Allah say 19 12, 19 15. But if you look at the number of things that spawned off, including the Pure Food and Drugs Act, meat inspection, cooperative extension, all those kinds of things, it was, it was quite remarkable. But there was something else that it was kind of at its NIR at that point, which was public sector unions. And so if you look at the development of American government, I would say that the two of the eras in which a number of you identified as charged with a certain kind of dynamism, right, were also periods during which American public sector unions were at pretty much their weakest in American history post the Pendleton Act. FDR of course actively fought against the American Federation of State County Municipal Employees. It took a while for public sector workers to unionize after the Pendleton Act, in part 'cause of the Pendleton Act itself took a while. And so is one of the, and not necessarily anti-union per se, but there have long been, there's long been a criticism out there that public sector unions are a little bit different. They have, through the ability to dominate small turnout elections, especially for state, municipal and local government, an ability to sort of put their hand on the till more so than others. And is it just lawyers that are preventing us from getting things done or can I bring that up? Namely, the increasing public public sector unionization of the entire American government workforce is at least one contributing factor.

- So let me take at least one more question before I kick this back to the panel to comment on if you have any comments. Anyone else have a question? I may be yes. Right there in the back. Thank you. And you're close to a microphone too.

- Miracles. You

- Are

- Paul Brophy, just a resident of the area.

- Welcome.

- You know, listening to you all talk, the what came to mind was Christopher Lash's essay on the Revolt of the Elites, where he talks about the rise of a meritocratic elite, I guess probably starting in the sixties, that have taken control of, you know, all institutions from education to industry to to government, to the foundations, to the media. And he talks about kind of a, he uses the words, I think rootlessness cosmopolitanism a a diminished sense of obligation and vanishing reservoirs of patriotism. And to the extent that we, if that is the era we're in now and we're practically at ground central for the exactly those kind of elites, how do you change the country if you have an elite that has a worldview that is different from the large bulk of their fellow citizens?

- Okay, why don't we do, would would any of you like to comment

- On

- On either of those questions?

- I'd say the, I I think the first comment is, is really we're thinking through the second comment kind of takes us to higher education and the debates and dilemmas of higher education and you know, there's often unintended consequences. I think this meritocratic system was developed to give everybody a chance and to try to bring into higher education, not just those already from wealthy families, but those who showed talent across the nation and one unintended consequences that we centralized, we tended to take those identified as having talent and pull them out of their local context and centralize them in the great national and even international universities like Stanford. And I think that meant that people didn't necessarily go back, they stayed in the metropolitan, they didn't go back to the province from once they came. And you repeat that over generations. And I do think you create a class of leaders who becomes more attuned to a national or an international culture than a local or a federal culture. And that is part of the problem. I'm not sure how to reverse it. I think part of it has to do with strengthening the state university systems. We have just incredible state universities. I'm a graduate of Berkeley and over time those have become less funded and less central and there's been sort of opportunity hoarding by the very top of the educational pyramid. I don't think that's been good, even for those of us at that point. So I think we're all talking here within Stanford more generally about that. And how do you keep what's good and how do you reverse some of what we now see as problematic

- Either of you have? Well, I I'm not sure I have any direct answer to either question, but let me take the opportunity to repeat something I said at the podium. But I think legitimacy of government is the predicate of competence. And competence is a strong gu andour of legitimacy. But you said you, you mentioned something you thought was missing from the discussion was the role of public sector unions. I think there's another element that's been missing so far, and it is quite simply the role of leadership and I, it just happened, I, I was thinking about this, my eye fell on something online, which I'd heard before, but I'd forgotten about it. It's a, a remark of William Allen White, the sage of Emporia great famous journalist in the late 19th, early 20th century. Probably his most famous article was, what's the Matter with Kansas? A big anti populist tirade. He met Theodore Roosevelt in 18 97, 18 97 before Roosevelt's president. And he said the following in his memoir, he said, Roosevelt bit me. And I went mad. He sounded in my heart the first trumpet call of the new time that was to be he poured into my heart such visions, such ideals, such hopes, such a new attitude toward life and patriotism and the meaning of things as I had never dreamed manna had. What a powerful voice to inspire people, put public service, good government. I haven't heard that kind of voice convincingly and authentically in our culture in many years.

- Dan, I'm I'm thrilled that you're in the audience. You're, you're heavily cited in my book, so, so, so, so I I wanna address your question directly. You know, I I am somewhat skeptical about the role of unions being a crucial element here. The, the story that that gives me my skepticism is the story of aided dependent children. The New Deal program, which was the first welfare program nationally quite like that, which eventually becomes a FDC aid families with dependent children. And then now tanf A DC when it was passed, was passed explicitly to keep women out of the professional workforce. It was passed because there was a fear that women who were widows or mothers would be forced to go into the workforce. And the government had some interest in keeping them home to raise children. And the program empowered states to hire what were than a new legion of professional social workers who were designed to go in and to help women in a very matriarchal way learn to live on the straight and narrow, no men, no alcohol, et cetera, et cetera. And they had enormous discretion, these social workers who were handing out dollars to enhance what a recipient got and to diminish what a recipient got if they were not staying on the straight and narrow. So there was enormous discretion to choose among the social workers, which leads to this regime, which people find very offensive in the 1960s, which is that social workers are going on midnight raids, they called them, where they would knock on a recipient's door at midnight and see whether there was a man in the house. And if there was, it was an indication that they were either being amoral or that they were with a man and therefore should not be on the dole anymore. And this came to be viewed in this new era of new morays, maybe as Christopher Lash talks about to be a real oppression. And so in order to stop that discretion that these social workers had the progressive movement, and broadly speaking, the, the reform movement moves to a situation where rather than giving discretion to these social workers to be matriarchs, we move to a system where the people who are running A FDC are essentially just checking boxes. They are, that there is an explicit effort to move out of discretion with, with, with these government workers to one where they are basically just how much do you make are, how many kids do you have? And you check off the boxes and your incentive is not to give out money, but it's simply to make sure that you are hi hitting your marks so that our, you know, our, our sort of generalized impression of social of, of caseworkers as opposed to social workers caseworkers with these huge piles of, of files on their desks not really caring, just trying to sort of get through the day. That is, that is the incompetence that we are now frustrated with is that, is that we've now Massachusetts, this is where there's something interesting in this way, is that they are trying to make this transition from matriarchal social workers who are oppressive to just sort of clerks that they, they had previously put caseworkers who were in geographic areas together, so I'm sorry, cases that were in geographic, like, you know, the town of Lowell would have a caseworker who knew all the social service agencies in order to break that bond. They changed it so that all this case, all the cases were given to caseworkers on an alphabetical basis. So they wouldn't know statewide who was where and they wouldn't be able to have this sort of, this sort of coercive role. And so the suggestion I took from your question is that having a unionized workforce sort of diminish the quality of the work or, or change the incentives for the individual workers. Whether, whether the, whether the matriarchs who had been social workers had been unionized or not, whether the caseworkers who were incentivized not to give out money or to, to sort of live, live and die by the, by the bureaucratic standards where unionized or not is, is to me less of a factor than the sort of the incentives of what, what what we're trying to do and who should get to decide what an individual reci recipient gets.

- So I'll close with this comment actually to just pick up your question about Chris Lash and the issue of elites. 'cause there are two dimensions to the problem. The first dimension that's less well understood is that often the problems are elites versus other elites. So for example, in the COVID crisis, there was actually quite a lot of very bad advice given out in the spring and summer of 2020 about how to protect yourself from contagion. You remember the, the theater, hygienic theater, all that turns out some very good work's been done on this. I'll talk some more about this tomorrow. What you had then was guidance issued by a very small self-perpetuating a lead of biologists who were significantly influenced by tuberculosis models of disease spread that had been developed in the 1920s. Who dominated the giving of that advice and the particular culture that pr that produced that advice. The answer to them was of course not to do a poll on how diseases spread. The answer to them, actually the con the con the big contest, which was invisible to the public, came from people who do occupational health for a living. There is a whole other elite of people who do occupational health and safety studies, including for aerosols and workplaces and so forth, who had a totally different view on how to do the health guidance came from a completely different intellectual tradition. The biologists by the way, tend to look down on people do occupational safety and health. The biologists come from Harvard, the occupational safety and health people come from West Virginia University. These are not actually made up illustrations. And so there was almost like a, these were the blue collar elite in science world versus the white collar elite and the white collar elite one and gave terrible advice, which then has, is revelatory to people who study this sort of thing, but is actually a, an argument within the elites that was really divorced from the public vision, except that of course the elites then destroyed. This was one of three or four things that destroyed the credibility of elites in 2020 in the crisis that touched more Americans than any other. But then the, the other comment that's worth making on this question of elites is a deep, deep old question that arkins back to Mark's original discussion of Jeffersonian versus Hamiltonian. And a colleague, an old colleague of mine named Sophie Rosenfeld, wrote a book called Common Sense. He, she's a historian about basically Tom Payne's book. And, and basically the idea is this, this seems like a wonderful theme except when you think about it for a while, you know, you could ask yourself is gee is common sense always right? Is the Vox popular always right? Then you think about that for a while. You think about things that people thought had com made common sense at different times in our history and what, what people would've done if you just took the polls. And the way I relate to that very personally is once upon a time I was a trial lawyer and I tried cases long ago. And actually a big issue for when you're a trial lawyer is like, okay, do I want to have this case tried to a jury or to a judge? It's really, it, it, it poses its most stark form this jury that's randomly selected from your fellow citizens. Or would I rather throw it to this careerist well-trained judge who's heard many, many cases. It turns out that that's actually a less obvious choice than you might. You might think, oh, well of course if I'm, the merits are on my side for sure, I want the judge. 'cause the jury is just a bunch of people who can be bamboozled. They're reputed common sense put to one side to lawyers who have a lot of experience in the courts. It actually is not nearly so clear cut. Especially if you know some of the judges, and actually that's a deep point is elites are not this kind of homogeneous blob. The elites are actually just different versions of everybody else. And so then the question of whether you prefer the jury or the judge is this deep question. But partly one that comes back to themes we've brought out here is how do you measure competence evidence and how do you set up a system in which there is some sense of accountability and transparency and measurement? And David alluded to this, I think explicitly and so did in different ways, did Mark and Jennifer and I think as like for example, since with Jennifer's references to the way the Federal Reserve system evolved and changed. I think those are really powerful framing takeaways for the discussions that we're gonna continue tomorrow. For those of you from the general public, we'll be having some private workshops in the morning to compare notes among a lot of really interesting people who've come here. But then in the afternoon we're gonna have three more public panels. You'll see the schedule outside and if you want to hear the way we're developing these ideas, some more come on by tomorrow. Thank you very much for coming on a Sunday.

- Welcome. This is the first public panel in the conference that we're holding, which you can see described on the banner right there. Decadence or renewal, envisioning competent government in America. Okay. The conference got started with a public panel yesterday offering a historical scene setter with Jennifer Burns, David Kennedy and Mark Dunkelman. And then this morning we spent the whole morning in private workshops we were sharing our perspectives. These are people who come from all over the ideological spectrum, but they assure a common belief that the big problem here is not even so much the debate about what government should do. The debate is about whether government can do it, whether the government can still get stuff done at all. And the disillusionment With that, we're gonna do three panels that are gonna take on different aspects of how to make government work, whatever it is you think it should do, and restore public confidence that way. Turns out all these people have been working on these problems from different perspectives. It's working its way into the public discourse, but is not really where it needs to be yet holy. We're gonna launch the first of these panels with a focus on innovation that takes the focus away from the national government where I think it's fair to say public attention dwells at the moment and really take a look at what's going on at the state and local level. And Jen Paulka is gonna moderate this panel. And Jen, why don't you take it away.

- Great. Thank you so much Philip. Thank you all for coming here. I hope some of you actually intended to come and weren't just running out of the, what looks like rather unpleasant rain out there right now for this very important topic. I'm going to introduce our panelists here in just a moment, but set it up a little bit. First, from my own experience, not just my professional experience, but something that happened to me personally and what I learned from it. And it speaks to this directly, I think, to this issue of a competent government at the local level. I used to live in Oakland and last summer when I was there, I finished Zoom calls during the day as one does. And I went into my bedroom and there was a man standing there going through my things. He had broken into my house and it was, I believe, quite mentally ill. And I was the subject of a, what we would call a home invasion. I like to think that I handled this very calmly, but I just screamed and ran outta the house like normal people do. I called 9 1 1 and I was on hold for five minutes and then it hung up. I called back, I was on hold for seven minutes. It hung up again. I was on hold for three minutes and they finally answered and said, Oakland Police Department will be there as soon as they can. That turned out to be two hold days later that they showed up. And of course I got curious about why that would be, and dug in a little bit to the state of things in Oakland's nine one one call center and the, the police department. And found that, of course, both entities were experiencing really enormous shortages, staff shortages. Like there's reason no one picks up the phone. And it's not that people are lazy, it's that there's no one there to pick up the phone. Both. So both had staff shortages. It's very, takes a very long time to train a new 9 1 1 operator or a new Oakland police department officer. But also what they do is, is, is is really mind boggling. So about 85 to 90% of the time of an Oakland Police Department of Oakland police officer's time is spent on paperwork. They are subject to 10 oversight bodies that I could find. And I think that there are more, I think the number may be more like 12 or 13 different bo bodies that are designed to oversee them, which is part of the reason that they're spending all that time putting the same information into multiple systems for the multiple oversight bodies. If you are an officer in OPD, you have to go through 19 different policies in your head before you can confidently decide that you are legally pursuing a, a suspect that is an enormous amount of procedural bloat essentially. And so after some of this inquiry, it occurred to me that there was a reason that had happened to me and that it was, that it was a, this whole incident was a perfect illustration of what I talk about in my professional life, which is that we have spent so much time, as Philip said, talking about what the policy should be and fighting about it. And yet for decades have neglected the how of how these policies are actually implemented. And just as Maslow's hierarchy of needs says you can't have self-fulfillment and self-actualization, right? That's at the top of that, that pyramid, if you're not fed and clothed and housed, government too has a hierarchy of needs and the outcomes that we expect from better policies like a, a safer community or even just the ability, the confidence that someone will pick up the phone when you call nine one one actually rest on a foundation of the operating model of government. And it needs to be fit for purpose for today's world. And when we, I I, I've started with a story here of, of government failure. In fact, it wasn't as terrible as it sounds, nobody was hurt. They did end up actually arresting whose person and who was incarcerated and I think actually in a drug treatment program. So it it, it's not as bad as it sounds. We do take government for granted at our own peril. But I do think that questions that we have about government's ability to really meet our needs in today's age do drive from the sense that the operating model has been is, is one that we essentially have adapted a little bit for the internet era but is grounded fundamentally in an industrial era. And we need to leapfrog it now to be good, to be fit for the world of this AI era that we are moving into very briefly. 'cause I think this will speak to the innovations that our panels here to talk about today. We pull that operating model apart into four basic pieces. Do you have the right people? So do your civil service systems attract, select, develop, retain the right people and for the right jobs? What jobs are they actually doing? What are they focused on? Are they drowning in procedural bloat or are they actually able to be working on the outcomes that people care about? Are they doing 95% of the paperwork or are out there on the streets, you know, patrolling on the behalf of the citizens of Oakland, do they have purpose fit systems? And this speaks to my background. I spent 15 ish years on in government technology. Why is the technology such a bad fit for what we need it to do? And it's, there's, there's an answer to that that we can get into. And lastly, can your government operate in test and learn frameworks? In other words, can we experiment and get to where we need to go? Or are we stuck in a plan that was created 20 years ago and we can't, we can't, we we, we can't depart from that even as we can see that it is not working and the world around us has changed. Another way of saying that is that we really need feedback loops between our policy and our implementation. And, and I know David is gonna speak to that. So I set the stage for that because I think it, it will help ground our conversation as we talk about this, this general topic of government competence. But let me say that while I wanna assert that we need an operating model that is fit for purpose today, I also wanna assert at least for the purposes of the panel, that that operating model is going to best be illustrated in action in a way that people can believe in at the local level, first at the state and local level. We're obviously in a time where the federal situation is grabbed all the headlines and there's much to say about that. But as much as, as we do wanna talk about that, we don't wanna forget that we have these laboratories of democracies here to show what a transition to a fit for purpose operating model can actually look like. So to to illustrate that for us, I have three wonderful folks here and I'm just gonna do a very brief introductions. I'll you say a little bit more about yourselves each, but David Chu is the currently the city attorney for San Francisco. I'm going to go out on a limb, I don't think this is a stretch at all and say that he is the most innovative city attorney in the country, but also one of the most thoughtful elected leaders about this whole issue of the model that we need today. And I'm excited to for you to hear a little bit about what he's been doing. I got to know him when he was an assembly member. He is, had a long history in elected office, but he was very much, very impressive in interrogating our head of the employment development department about the failures of the pandemic unemployment insurance during COVI and many much else to say about David, but we're very glad to have you here and we'll get right back to you in a second. Mackey Raymond comes here from, she's from Stanford, runs the SK 12 education at Stanford Sphere Institution and she spent her career studying what actually works in education. So this is very evidence-based perspective here that I think is, will be relevant not just to the conversation about our schools, but again relevant to, there are lessons there for the larger sense sense of how we must govern in in this next era. Drew Erdman has a long background. He's currently a senior partner at McKinsey. He spent time in Iraq and Afghanistan. He was the chief operating officer of Missouri, correct? Yes. And has, again, seeing the failures and I'm happy to say seeing some recent successes that he's gonna share with us, particularly in Austin. David, thank you for coming. Let me start with you. Your city is famous, sadly, or we should say infamous for a couple of things. Most recently, if you're a government nerd for a $1.7 million toilet, can you tell us a little bit about what happened? How we came to find out that this toilet cost 1.7 million and what you have determined needs to be done about it and what your office is doing about it?

- So since you started that way, I have to first be a little defensive of San Francisco and talk about all the wonderful innovative things that we have done that I am proud of. You point to the $1.7 million problem, which was there are a lot of toilet poop jokes who can make about this that I'm not gonna make.

- This is Stanford. You had to be classy.

- But that did surprise us. It became a national story when we discovered that as we were trying to put one public toilet in the middle of a neighborhood in the middle of our, that it was gonna be this cost figure. And when that story broke out, I have to admit I was not surprised in part because of my experience as a former legislator. I'd spent 13 years as a local and then as a state legislator. And during that time period, like most legislators, you know, we grappled with the so-called policy issues, but often didn't think about the implementation costs and certainly didn't think about the impact of layering on laws over laws at all of the different levels that we talk about. So fast forward, the story breaks and I reach out to the head of our recreation and park department to say to him, Hey, I know you are personally not driving up this cost, but I suspect that there are lots and lots of laws layered over time that have led to this. And if you like, as the person who heads up the law office that provides you with legal advice, we can do that analysis of what laws actually drive this cost. And it turned out to be a very long memo that described all of the steps it takes to build that $1.7 million toilet from design reviews involving many bureau bureaucrats, engaging with community to contracting and procurement rules, to civil service rules, to budgeting rules, and a whole slew of other rules that have nothing to do with toilets. And so we did this analysis and I said

- To, can you give an example of one of those rules that had nothing to do with toilets?

- Oh gosh. Oh gosh. Well, just looking at sort of the design review process Literally takes taking a piece of paper that has a picture of that toilet and handing it from bureaucrat to bureaucrat within different departments to get their sign-offs. And what would happen is it would go to bureaucrat A who would say, okay, fine, go to bureaucrat B, who would say, you need to fix this part, which then requires kicking it back to bureaucrat A before it can get to C, D, E and F. And so just that process of design review that also involves community input. And as you can imagine, every time the community has a different thought on exactly how it should look, I mean one would think this was literally gold plated, but that process took a lot of time and time is money and every one of those bureaucracies involves money as well. And so to some degree this toilet was really emblematic of what I have seen in sort of this new role. Having left the legislature now in a role advising implementers, advising folks who actually have to deliver results for the public. And when we put this analysis out there, it was helpful for the public to understand and not necessarily blame it on say one or two bureaucrats. And through that process we were able to say to the public, do we really need this section of code to govern this? If we were to eliminate 90% of this work, we could reduce the cost of this toilet. And that's actually what we did. It took about a year, but we ended up being able to produce a $300,000 toilet. But it required us for the first time. I know it's hard not to laugh hearing about this,

- It's better

- Still not it's red colored, it's not yellow colored. But suffice it to say we were able to develop a cheaper toilet. And obviously that is a example for the future. Now to me, this is one of many, many examples within our government and governments writ large across the country of what doesn't work. It happened to be a very, very public one that was frankly quite embarrassing to our city. But this process that we went through of doing the analysis to say why did these costs add up? What do we do about it? I do think led to a better result.

- I wanna stick with this just for a second. You've done some work with Dan Ho's Reg Lab here at Stanford to use large language models to understand some of the archeological layers of San Francisco's code in order to streamline it. I'd love you just to mention that briefly and also did that actually, you know, did you find any connections between the escalating costs for the toilet and things like the boards and commissions that the LLMs helped you find?

- Sure. So Jen is referring to a couple of things that we did. One, so there was a, there was a reporter a couple years ago who walked around our city hall and asked a question to all of the key decision makers. And the title of his article was, only one person at City Hall knows the answer to this question. The question was, how many boards, commissions, advisory bodies are there over San Francisco City government? The mayor's office didn't know the answer, the legislators didn't know the answer, department heads didn't know the answer. It took my communications director six hours before she was the person who provided the answer to this reporter. And the answer she came up with was 183. Okay, city and county of San Francisco 183 governance bodies. This includes, for example, at this moment, five commissions and advisory bodies that address homelessness. And I could go example by example of what that looks like. We actually asked the Stanford Reg Lab to do an analysis to just ascertain if our number was correct. And it turned out our number was a little bit low, they caught a few more. But suffice it to say that is way too many. So when this article came out, there was a bit of an uproar, this doesn't make sense. There were a group of folks that placed on the ballot a ballot measure to say 183 ought to be slimmed down to 65, somewhat arbitrary number. But that wasn't an unreasonable number. They didn't dictate which 65, they simply said we're gonna slim it down to 65. That created a different reaction from folks who were really invested in the status quo. So there was a competing local ballot measure that was placed on that said, we don't wanna bring it from 183 to 65, we want to create a commission to study the commissions and guess which ballot measure passed the commission to study the commissions. So at this very moment we have a process by which in San Francisco we are going through 183 plus to figure out which of these commissions we're going to get rid of. And as you can imagine, there are interests around every single one of these. And I do not want to, I'm not gonna criticize the perspectives of any group of folks who care about any advisory committee board or commission because each of them were certainly enacted at a time when people thought that these were important. But over time, what the data shows is that the vast majority of these commissions not only don't produce much, but many of them aren't even meeting on a regular basis. Many of them are not even making quorum, but I can sure you virtually all of them have constituencies that have come outta the woodwork to protect their commission, their advisory board. And that is a conversation that we are grappling with as we speak.

- So you're speaking to this issue, I mean you saw it in the, you know, 10 least 10 oversight bodies for the Oakland Police Department of sort of the accrual and a creation of process and procedure and stakeholders over time, which has sort of created this very sclerotic government that we have. And you're doing amazing work to try to chip away at that the LLMs are helpful, that maybe the voters aren't always so helpful if they chose the second option. Mackey, you are advocating for something I think more radical than that, which is less let's, let's clean off some of the, these layers and more. We really have to create entirely new, new institutions to do this work. You've come to that conclusion from looking at school performance. Can you talk a little bit about how you got to that conclusion and why?

- Yeah, sure. So first, hello everyone. I'm delighted to see you all here. To the extent that I can see anything with these bright lights, I am excited about sharing some of the work that we've done here at the Hoover Institution about looking at the Uni United States kindergarten through 12th grade, elementary and secondary public education system. We've been studying this for the last several years in terms of what, what do we know about the way in which innovation has been attempted and whether or not it's been effective. And the conclusion that we came to after extreme amounts of study was that the existing system conspires to maintain a status quo. And innovations that we try to make at the margin, which is the way typically new programs are introduced are, are almost uniformly eaten by the system itself. It may take a while, there may be a little bit of a foothold there may scale a little bit, but basically the system conspires to eat their young. And what this suggests to me is that the framework by which we operate our K 12 system, we call it an operating system in the same way that Jen calls it, an operating system, is actually responsible for a lot of the stasis and entrenchment that we see if we're going to change. It doesn't seem like there's ever going to be enough leverage to take on the entire system at once. That just isn't the way that things work. And so what we are calling for is actually a new operating system. And the way that I think about this is setting it up in parallel and then cutting over. And the purpose of this is to actually bring a different ethos into the idea of running our public school system. Instead of having people who are far away from the classroom making decisions about what happens between teachers and students when they don't know the students, they don't know the communities that they're working in, they don't know the history of what has been tried with students in particular places. They, they mandate solutions that are typically one size fits all. The legislature comes in and lays on extra, extra rules, extra regulations, extra programs and mandates. And what happens is that the classroom becomes completely entrenched in rules and regulations that they can't control and they can't change. And what we're calling for is to flip that, that actually what what we need is a system that actually serves the instructional experience between teachers and students. I don't think AI is ever going to remove the human element of that learning experience. I think it will augment it in many important and in innovative ways. But we need to allow innovation to happen in the learning experience so that kids' needs are being met, adapted in real time. And innovation becomes something that is a typical process in schools, in districts and in systems. You would think that that would be a horrific thing to try to do. And yet we have examples in large numbers around the country where we know we can get systems to be adaptive, we know we can get them to be innovative. If we allow that as the typical way of doing business, those would have a much larger chance of actually catching on. So the other thing that would happen in a, in an environment like this is that we would be able to recognize that we have huge variation within states, across the communities that are serving our students. And so what might work in an urban district might not at all work in a suburban or a town or a rural place. And likewise the assets of communities don't get drawn into that equation. So if we are going to be in a position to adapt to the huge structural demographic cultural changes that we face as a nation and as a globe, I think we really have to be able to build into our new thinking, a kind of expectation of innovation as a typical process of business. And we have to allow for local innovation and variation in or, and equip them with the kinds of capacity, the kinds of tools that they'll need, especially knowing what has worked in similar communities. So knowledge becomes a real asset in helping the learning experience be adaptive. If you don't know how to address the needs of a child, there ought to be resources there that you can readily grab onto. We have examples of this, we know this in in medical care, we have knowledge based, our medical experience extremely well. We could do the same in education. So with the right kind of capacity, the right kind of testing and innovation and learning from that, making that available to, to frontline workers, being putting them in a position where they can adapt themselves and being very, very clear that the expectation is student learning and making sure that you provide the necessary support so that students move forward. This is a case study that I think actually generalizes to many other sectors of the public engagement in government.

- Let me, let me push you on two quick issues then. One is, and, and I know we, I just said that we're gonna talk mostly about the how and not the what, but there is this new what in California on education policy of trying to, I I suppose borrow a bit from the Mississippi Miracle they call it, but the surge in testing scores in the southern states as they have required the schools to go back and teach phonics. As far as I understand, that's sort of the core of it, not an education specialist. You know, I used to live in Oakland, there was an article in Berkeley side about how this, the teachers in Berkeley like just still kind of think they wanna do it their way and they think that the, what is it, the Lucy Kalon method, Calkins Calkins method is just better for their kids

- Whole language. It's called,

- Yes, better for their kids, but this is better. You know, they're actually asserting that sense of, but we do know these kids and we think these kids want the, you know, are gonna benefit from this method despite what, you know, despite don't tell me from the top that we need to teach phonics. How does that play out for you in terms of this, this issue of local control?

- So it's a great question and I think the, the, the core of this is actually a criterion or a standard of professionalism that we ought to expect our educators to meet. And part of that is something along the lines of we always evolve our practice to the best known. We don't expect doctors or nurses to stay in the same practice lane that they've been in from their training. And yet we allow teachers to do that. I think the expectation here is that we enable folks to understand why new techniques or new evidence should be compelling. It should be packaged in a way that they can grab onto easily and adapt and, and and adopt in their practice in an, in a simple way. And I think the other expectation then is if you do not move to a sort of most favored nation status of your practice, then there ought to be an, an understanding that that's going to be recognized and addressed.

- So essentially you're saying we need the right people doing the right jobs in education. Yes. By the way, the stat, sorry Californians, this is, this is a bit sobering is that in Mississippi 52% of black third graders are reading at grade level and in California it's 28%. Yes. So we've, we've definitely fallen behind. I'm excited to see this policy come through. I hope that we can implement it in the way as effectively as some of these southern states have to see, see this surge.

- So let me just go back to your four points. The process that we are asking for in the new return to phonics education has been well delineated. What has not been well delineated is the way that we can help educators who are not pursuing that as their regular practice adapt over to the new old renewed practice techniques. And as important as it is to have appropriate decision procedures, I think the adoption procedures are equally

- Important. Yes.

- Making those supportive and accessible and reinforcing of the idea that it's your responsibility as professional to grab onto that and to help your students move forward.

- In other words, we have a new what we've gotta marry that with a how that is effective so we get the benefits of it putting, I don't think I'm putting too many words in your mouth, but thank you for that. Okay. I wanna come back later on to what that means for the role of federal government as it relates to state and local. So we'll maybe end on that, but Drew, we sort of have the, you know, I think very, there are bold efforts to scale back some of the layers of accretion and then we have the view of we just actually need to create a new institution and cut over. As Mackey says, you have actually I think seen something in the middle be quite successful. Maybe will, would you talk about some places where you have seen processes go from very cumbersome to very appropriate

- Or at least very cumbersome to maybe less cumbersome. Okay. But so again, thanks so much for the opportunity to be here and have learned so much from the, the conference and the events so far. Again, I'm a partner at McKinsey and Company, so I spend my time traveling the country helping state and local governments improve their organizational and operational efficiency. But before coming to this role, I was a chief operating officer of a state government, about a $30 billion enterprise, about 45,000 employees in, in Missouri. Should note he was at the time I think the lowest paid state workforce in the country. So there's a host of other challenges, but I wanna start with one statistic. So if you take away anything, you know, some people like numbers, so I'll, I'm trained as a historian, but I'll give you some numbers. 1%, 1.5% and I would argue that's why I do what I do, which is the, our research shows that if there's a one percentage point increase in customer satisfaction in government services, trust in government overall goes up about 1.5%. So as we say, in a kind of trust deficit environment, that's one of the reason of of why fixing some of these operational challenges has a positive halo effect. So I want to stress that as one of the takeaways of why innovation of space matters. I'm gonna tell three very, very quick stories to set up a longer case study. Imagine if you're coming in as a chief operating officer to a state government and here are three data points and I'll ask you what links them together because that goes to where I focus on innovation. The first is you go to a head of procurement for a state government and you ask that person, and again, billions of dollars of spend, you know, critical issue and you say, do you have a performance measure that you track? Most of her counterparts did not, but she did. And well this is wonderful, you track something for performance. And her performance measure was to get to zero, the number of successful appeals of procurement, meaning to layer on extra processes to prevent bad things from happening. And proudly talking about that there were extra processes that no other state had precisely because optimized to prevent a successful procurement appeal no matter how long it took, no matter what. That's what she was optimizing for. Second thing is though a leader of a multi-billion dollar enterprise with over 10,000 employees with over 25 years of public sector experience in multiple states who confessed to me one day or asked me this question, what is project management and why does it matter? Literally had no idea of basic man, you know, basic management. Could you put together a one page memo for me on what is project management and why does it matter? Again, a multi-billion dollar enterprise and over 10,000 employees, I'd argue that what could never happen in the private sector, and I say this as served in the federal government as well and these are all very smart, talented people. So it's like what's the system and what are the incentives? The third example I'd give is imagine in the height of tax season you go to a tax call center where people are calling for help with their taxes to this call center. What I'll just ask the group, what's an acceptable answer rate from that call center? By answer? Meaning picking up the phone, not getting your question answered. What would be an acceptable rate for a call center? It's your revenue. A hundred percent. A hundred percent. And what do you think it was in the height of tax season? 15. Hmm.

- 15

- Some days below 10%. Wow. Their targets were 30% their targets. And then if you pull the thing in, like do they have the technology they actually did, do they track the metrics, goes back for years, et cetera. So what's the underlying common feature here? I would argue, and this goes to the focus on innovation, it was not that these weren't smart people, it's not that they weren't dedicated people. It is they literally didn't have the basic core management skills to do their jobs because that is act they were never trained for the most part. People in the local and state government, they rise by being experts in let's say technical engineering or social work, et cetera. And they be maybe running hundreds of millions of dollars of programs with literally never any experience or coaching in basic management whatsoever. Okay.

- True. I'll have to interrupt it. Yeah. Because David and I both had this experience Yeah. Of watching the EDD in California during the pandemic. Yeah. And we also had very significant problems with the, with the call centers. Yep. And the people were not, they were on hold for, you know, hours and hours and no one would answer. And I, I led this strike team that, or I call it a task force that went in and, and tried to help. And there was this moment, which you will appreciate and in which we'd been told that there were three different call centers and we could not actually find the call centers at all. And at one point my colleague Marina was in an office there happened to be a couple of phones around and she said, I'm still trying to find call center too. And they were like, you're in it. Like there was just a, there was no one answering phones there. Some of these things just turned out to be like borderline fictional.

- Yeah. - And you know, from, from from where, where, where David's sat and where where I sat sort of, you know, looking at it from afar, you, you, you couldn't quite tell what was going on until you really got in there. You really got and saw how it was, was actually functioning.

- Absolutely. Well in this case there were call centers went to them, actually walked the floor. 'cause I had done that before. But here's the, to illustrate the point change of one person, we brought in actually a competent operations person who worked for Anheuser-Busch. The same people, the same pay, the same technology, the same staffing, tripled the performance in 90 days. By the end of the year they're answering a hundred percent of their calls. So that was managerial expertise and getting the system to work with all the existing things. So I used that as, so that has been, that was a focal point of what we were really trying to do is we accepted some of the limitations. We did do things like civil service reform as well. There were some legal things, but how to work within the system. The basic proposition is there is a huge amount of improvement that is possible if you can upskill the people to tackle those challenges. Okay. And I'm gonna give now a case study that I can talk about. Normally McKinsey doesn't talk about things. Our, our clients are confidential. But this is one that's in the public domain from the city of Austin. And I have to present to the city of Austin council. So, you know, I think it's pretty, pretty much out in the public domain. But this relates to permitting, which is one of the critical elements. Again, city of Austin, fastest growing city in the United States in the 21st century. Okay? If, if you look at the skyline in the last 20 years, it is a different city for those who have visited it. It is now the 10th largest city in the United States, which again, it was like 20th at the start of the century. Massive growth, homelessness, challenges, et cetera. And they, like many cities are having challenges with their site plan, development review processes, real estate, you know, being slowed down, mixed use residential, et cetera. So that's a scene setter. A new mayor comes in, mayor Kurt Watson who had been there before, but very experienced and quite frankly determined right away. And there's a themes of the story of, there was a leadership vision in saying we need to tackle this from a management standpoint, which is very rare for elected leaders to have that perspective. Which is, this is a management challenge as well as sorting the code and other things. And so there are a few elements. The permitting process involves 11 different departments. Coordination. It's inherently complicated. This is an inherently complicated regulatory environment because it does involve many things. And that should be regulated. 1400 steps, sometimes over 200 people involved in handoff. Some of it highly, highly technical. Again, this relates to what the, the community has decided is important. So let me put to the side the complexity of the code. Let me put to the side of the regulatory environment just neutrally, just absolutely neutrally. But basically what the approach was, was to diagnose the fundamental processes in very, very basic kind of lean management ways. And to mobilize the city staff to be part of that process of learning those skills. And actually as mapping the process, they didn't even know their processes 'cause it had been so complicated after years that they, they themselves didn't know the complicated handoffs that were involved. They themselves didn't know a delay on this part really slowed down the person next to 'em, they didn't know. So making that transparent, building the skills and capabilities for basic continuous improvement or lean management, whatever jargon you want to put against it. But the process itself makes them the owners of the process. 'cause they're developing the solutions as well as critically, again, another radical idea. Another, you know, ask the customers what they think they had been. So risk averse that it's the perfection. I wanna perfect something before I share with the public because otherwise I might get criticized. And it's a classic analysis paralysis challenge. Crazy idea of like, hey, we're developing something. What do you think you know, to iterate on it to the feedback loops. Actually having those conversations openly having workshops where crazy notion, you have customers there and people can ask the customers their questions, what matters to you. And then it turned out such things as everyone thought, most people thought the most important thing is speed, gotta make things faster. Talk to many developers. That isn't the most important thing. Most important thing is reliability and predictability. I can live with something knowing it's 18 months, as long as it's 18 months and this next project isn't three months. And vice versa. You're killing me with the variability of these processes. Of course we want 'em faster. Time is money, but it's the inability to plan. So how do you make things more reliable? I could go through and provide more examples, but the basic proposition here is a step back and say managerial competence. How do we embed that? How do we train people up down to the front line to work in a new way, which is tied to like, quite frankly empowering them to change the system. Wait, why do we have these extra double checks in this system? Shouldn't we just have one person checking on this? You're right, we should. And amazingly it's like scraping barnacles off the hull of a boat, right? It goes faster. So then, you know, the punchline to this is, I mean two punchlines and then one cautionary note. So the city reports within six months, core processes, you know, backlog is at historic lows. Core processes have been cut in half the turnaround time that they're, they're tracking significant improvements in performance. Great. Also part of this effort, which is fantastic, we weren't associated with it. Part of the innovative mindset of willing to try new things. At the same time we're introducing, this is back in like 23, some of the ideas of what generative artificial intelligence could do. It turns out the city of Austin then was like the first city in the country to adopt artificial intelligence in a pilot to see the help accelerate the review processes. And they're doing that now and cutting out big chunks of their time, of their processes. I'll give one other anecdote to tie it together of some of the absurdities of this that were only visible once we mapped the entire process, but also listen to the customer. 'cause the city staff would say, Hey, we're through our process, we've finished our paperwork and goes out. And the customer still would sometimes wait a month they would have the documentation. And why was it, it was because it required wet signatures. That was a state law. Actually the state law couldn't be changed. Let's just accept it. And so the city of Austin's like what? Well the, then you pull the thread on why, why, why, what's going on here? It turned out in the city of Austin there was one paralegal who had sign on all the site plans. One. So if that person went on a vacation in the fastest growing city in America, literally no one could sign the forms. So crazy idea, they cross trained another paralegal. But I say that like the planning department that was outside of their control. But through the process of getting the customer feedback, it put it on the table for the legal office. Like, oh, we had no idea that we were totally jamming up and adding one month of cost. And we did the calculations of how much the cost was for every month of delay. That's like a significant delay and a significant cost. Okay, what's the caution here? I've shared this story elsewhere and other cities have been inspired by it. And it's not us, it's the city staff. I mean, at the end of the day we help ama, you know, helping amazing people do amazing things. I mean at the end of the day, they're the ones driving us. But here is the cautionary thing. It comes back to the mindsets, the art of the possible one city that I'll say is a major city going through where permitting is a major issue. When we shared the this case study, which is public, you know, when we shared the Austin's numbers that they publicly reported their improvements, this head of performance for a major metropolitan area in the United States said, that's a lie, can't be done. Total art of the possible. That person's mindset was that kind of change is inconceivable. Did not even listen to anything. Just literally said outright. That cannot be true, cannot improve like that. What are the odds? Do you think that there's gonna be any change no matter what in that municipality, if the people leading it have that mindset? Secondly though, another experience where this kind of approach which focuses on building the skills and capabilities, I'll just say oftentimes the leadership or the equivalent of city councils, they don't find it sexy.

- Oh, that's a perfect transition. I think

- They don't find it sexy.

- Yeah,

- It's easy to cut these, these kinds of things are investing in the skills and capabilities is the easiest thing to cut in down house is just not sexy. And it's very apparent at times that it's like very little appetite for investing in the skills and capabilities. And quite frankly, and I say this with a degree of MAs as someone who is a consultant but has also been a client of every major consulting firm, which is rare, that creates work for consultants because if you don't invest in the civil servants, it leads to different kinds of dependencies, which is a broader theme that I, I know Jen talks a lot about as well. But you get caught in a vicious cycle. So I wanted to share a case study of success where I do believe investing in the people is the unlock. We can talk about the other things layered in. It doesn't work without the people with the right skills. However, if you have leaders who don't have the art of the possible or if you don't have the support of basically the premise that civil servants should be invested in, you're not gonna get there.

- You've touched on quite a few things, just picking up one of the last ones, one of the themes of today has been the broad ideological diversity of the group that all cares about the same set of issues. And this issue of having the right staff internally, not just the right number of people, but the right competencies internally in order to allow you to outsource well now has far more bipartisan or multi partisan support than I think it ever had. I don't know if Kevin, how of course is still here in the room. There you are. So Kevin has written about a bit about this and sort of the hollowing outta the civil service and the history of that and, and what it has wrought really and what kinds of skills we need in government now. And I it's hilarious to hear it from a McKinsey person. Thanks. That's great. So speaking of the internal skills, the process that you just described as sort of a, you know, business process. Re-engineer is something where very often you hear, oh, the, it's the lawyers that'll keep us from doing it, right? They're the ones that will say, no, you have 300 lawyers and your staff that are getting to yes. That are actually what we would, what the, the term going around DC by the way these days is bottleneck detective, right? I'm not sure that's exactly how you would frame it, but they're, they're, they're trying to, they're trying not to show you what barriers are in the, in the way but, but create partnerships with your agencies to remove some of those barriers. Just to Drew's point about mindset, like how have you gotten that team into that mindset?

- You know, part of it is helping our team think about their jobs. Not in in, lemme put it this way, I, when I first came into our office, I realized that a lot of what our lawyers do or how they think about their roles is oftentimes akin to approaching the sphinx, right? The wise character for mythology where you go and you ask a complicated question and oftentimes you'll get an answer of the answer's three, oh, explain a little more the answer's three. Because lawyers will say there are seven different laws that are getting in the way and there are risks associated with going down any number of these paths. And so you can take this path through the thicket or you can take this path through the thicket and let me assess medium, low, high risk here, et cetera. Part of what I am charging my attorneys to think about is how to problem solve and to put themselves in the shoes of the client and think about it not from the perspective of those of us who are trained in the law to think about nuances of risks. But if our ultimate goal is to end crime or just homelessness or create jobs, what's the solution? And sometimes the solution is delete the code. And that's a solution that had not, I think really been considered by our office in a lot of instances until a former legislator came in and say, well maybe we advise the client to merge a bunch of laws and get a bunch of, get rid of a bunch of things. And I'll give an example of that. So one of the easiest ways for a legislator to say they're getting something done, well two easy ways to do it is one, create a commission. We're gonna create a bunch of folks, citizen Advisory commission to solve this. Great. And that's what I did and that's what I will campaign on in my next selection cycle. Second thing you can do is you can require government to produce a report every year. And I use that example because over the years I've been asked by my clients, man, we have all these reports, it takes an incredible amount of time. Do you know how many reports city government has? And because our code, our city code is 16 million words, we have not been able to devote the resources to actually count all the reports that exist out there and figure this out. Until a professor from Stanford Law School, Dan Ho came to me and said, we have this regulatory lab and we'd like to put your city code into our LLM, our large language model and we will ask it a question that you want us to pose. And I said, well why don't you ask it? How many reports does San Francisco City government have to produce every year? So we popped it in and within short order, they told us about 540 reports required across our city government. I took those reports and we went to a hundred plus clients and we said to the head of our planning department, our police chief, the head of our public health off department, how many of these reports do you think are actually helpful? Do we need to do? And they came back and said, you know, probably two thirds of these for a variety of reasons we're not gonna want to get rid of, but 180 of them we could probably get rid of and or combine with others. And so we actually then produced an ordinance to delete and merge 180 reports, which as you can imagine is gonna free up countless hours of time and not produce information that will either collect on shelves or create more cynicism by the public in order free us up to do other things. And part of this is just again, thinking about what is, what is useful for our clients? What is useful for the public? Is there way for technology to be used differently?

- Can you say briefly what state legislator chew thinks of? Or rather what city attorney chew thinks of state legislator chew?

- Yeah, so, so I have probably close to 200 local and state laws to my name. And I like to think I had a reputation of being a pretty thoughtful legislator at both the local and state level. And like most legislators, you focus on whatever issues you're working on and you think I need to deliver something to my constituents who voted for me to go to city hall or to the state capitol to get things done. And what getting things done for a legislator is, is getting an idea, typically a policy baked into some code that gets voted on by a whole bunch of my colleagues and then signed by a mayor or governor and becomes law. And unfortunately most legislators, once you get to that end period, you rinse and repeat, you're like, great, I got that done. Now I'm off to the next. And I campaign on, and you build your political reputation as someone who can deliver and pass laws. But as we know, all of us, and we've been having this conversation during this conference, that is only the beginning part of the conversation. And so little of our time is spent on whether these laws that we actually passed are having the impact that we wanted to have. There is obviously in our state constitution and the US Constitution and city charters, there is a huge wall between legislators and the executive branch. And it's not just baked into constitutional doctrine, but it's baked into day-to-day reality. Whereby as legislators, we almost never engage with folks from the executive branch about what's working or what's not working. And there's not that feedback loop that you were talking about before. And so what this meant was when I became a city attorney and my lawyers would come to me and say, Hey boss, we're now being asked a question about your law, ab whatever, what did you mean by this provision here? And I would read it and I'd either say, I have no idea including that in this bill. Or I would say that was the function of a really difficult political negotiation. And the language was deliberately vague to reflect the consensus that we were trying to develop. But of course that doesn't help those folks that are actually trying to deliver results for the community. And that is again, I think the core or one core of how I view the decadence that we are in right now, the lack of people's faith in government because we often, as legislators tout to the public, we have solved the solution, we've passed the a CA, we've passed the one beautiful bill, and this is going to solve your problem. But when it comes down to day-to-day reality, obviously we all know the pessimism that sets in because of the results that were not delivering.

- One way of talking about this is just you went downstream from where you were before and then you could feel the effects of your previous actions. And Mackey when you were speaking earlier about sort of, you know, the federal role and the need to sort of unlock innovation at the local level so that this solutions can be fit to, you know, the, the circumstances in a particular community really talking about this same problem of there being this, you know, and we, we call it waterfall framework of it starts here and it sort of cascades down and it doesn't go back. And so when you're talking about feeling those effects and wishing that you had, you know, done, you know, maybe written the law differently or Drew when you were talking about the, you know, the wet signatures, it's like that's un you understand now at the city level the impact of that state law, but what is the affordance for going back and saying, Hey, state of Texas, you know, what would happen if we fixed this? And guess what, we're not the only city having this problem, but we, we fail to have that sort of, you know, return. It's like it always goes one way and it feels like so much would come from being able to sort of get the return path. Why isn't that the information and the insight about what is needed getting back up and we, this is what we mean by creating these feedback loops with the, with the legislature. So we are just about done, but i I the last minute Mackey, because you brought up this issue of how, how it works in federal government, we're in a moment where, you know, the Department of Education is what I don't know. Is it even there? You know, what is the role, what should be the role of the federal government that gives you the upsides of some centralized control and performance analysis and you know, the ability to take care of people in the states but doesn't, doesn't get in the way of the kind of local innovation that you're calling for?

- Well, clearly there are constitutional guidances that we have to observe and in education because it was never a function that was reserved to the federal government for its execution, it has always been considered a state, a state issue, and a state responsibility. I still think that there is a federal role, particularly in as mobile and as global society as we now live. I think that there is a legitimate role for a federal government to be worried about an independent monitoring function on the performance of states in educating their students. I think there is a very powerful obligation on the federal government to assure that no specific groups of students are dis, are discriminated against. So there is I think a legitimate equity argument as well as an effectiveness argument looking at scores across states is the effectiveness piece and making sure that states don't hive off groups of students and start slacking on their education is the equity piece. I also think that there's a really important scale issue at the federal government in the same way that there's a scale issue at the state level that you don't want local district organizations to undertake some of the very large scale efforts that are going to duplicate fixed costs in every single district. There are things that legitimately are scaled appropriately at the federal government and those include things like really large scale research and and development, creation of knowledge, the kinds of analytics and data collection that allow people to make inferences across geographies that we would not be able to do if we didn't have national data and national analytics. So I do think that there is a legitimate role for the federal government. I don't think that that ought to go away. And I'm hopeful that that will remain. And I think that there are a lot of regulatory adaptations that have occurred over the years that have just added additional layers of mandates and regulations that I think are appropriate to think about reconsidering, eliminating, consolidating, and moving back to a, a, a location that is closer to students.

- That's great. I think we'll kind of end where we started then, which is I wanna see the innovations at the local level start to be listened to and adopted at the state level. I'd love the innovations that I see in the city attorney's office in San Francisco get, you know, taken seriously and and mimicked in the state of California. I want our federal government to learn from our states. I wanna reverse, I wanna reverse the flow of the waterfall, so to speak. And I think the kinds of innovations you all talked about are key to that. That one right here.

- Thank you so much for a wonderful conversation and refreshing, really hopeful and optimistic. My question really is very basic innovation. We talk about it and you all showed like ways, but what is innovation in our time when we already, like I feel like if we wanted to integrate innovation as a form of technology, not only human kind of centered, already we have softwares and technologies that could be integrated in our systems that by themselves inherently are innovative. So I think it, yeah, what is, how can we define innovation in our time really that would be more optimistic and result oriented in the balance between our battle between human and workforce as well as integration of technology?

- It's a great question. It seems to me that innovation can only be assessed relative to a desired outcome because innovation automatically means change, right? And so you could imagine innovations have a curve to them and some of them are positive and some of them accidentally become negative or intentionally become negative. We've talked about some of those in our morning session this morning. You have to have an outcome in mind and always use that as your sort of pole star and north star to see if creating a change actually moves you closer to your goal. And I think that necessarily requires the kind of iteration that you were speaking of earlier today, that you have to interrogate the existing practice and then you have to imagine or, and test going back to testing whether or not up adopting a change is possible. You try it for a while, you look at it, you see if it actually moves you forward and if it doesn't, you stop doing that. We don't give enough consideration on the exploration and interrogation side of the business. We tend to just grab an innovation and slap it in and hope that it really does the magic and there's not a lot of magic. So

- I'll jump into the answer in a slightly different way, but, but actually I think making the same point, which is you've, if you're driving innovation, you have to figure out what your goal is. You start with a dissatisfaction with where you are and you obviously look at your situation and figure out what has to change to get you there. In our city, not too long ago we discovered it took us on average 11 months to hire a staffer. So from the moment in which a department head says, I have an open rec to when the hire starts 11 months. And we all agreed, that's outrageous. And what we decided to do was we put a bunch of folks cross-functional teams in a room, including some of my lawyers, to just map out the process and figure out what aspects of this could we live without. Almost akin to what does it mean to build a $300,000 toilet versus a $1.7 million toilet. And we were able to shave six months off that process. Now I still believe five months is way too long on how long it takes for us to hire, but that's certainly better than 11 months. We're doing the same thing on permitting reform. We have at the moment in our city, if you wanna open up a yoga shop, you've gotta navigate 15 to city departments to, to figure out these things. We're doing the same thing in process mapping. It's pretty arduous. But if you know what your goal is, which is to speed up the cost of, or the time to open up a business from three years to six months, mapping it out really, really helps. I think the last thing I'll say is this idea of testing and implementing is something that is accepted in the private sector where you have lots and lots of say startups or companies that are experimenting in different marketplaces and moving forward but not accepted in government. Government is usually expected to involve some sort of status quo. And we've gotta shift the mentality of how we address things to allow for what I refer to as more piloting to understand that you're gonna try a bunch of things and some of these by definition are going to fail, but you wanna fail fast and figure it out fast and then shift your resources to what's actually working. And the political system, the political process doesn't give a lot of space for that failing fast, failing forward, but then succeeding to happen. I could give a hundred examples of where we ought to be doing that, but that's something that, you know, we're certainly thinking about how do we make that more politically acceptable?

- I was just gonna add, just to clarify, innovation should not be equated with technology. It's just new ways of working. And I think that what's being highlighted here, and this is something encountered in Missouri, was basically one of the big innovations was getting people to think differently. To think, do, learn, do. Like we can analyze this thing forever, do something, take stock of where you've gone. What's the data, what is it telling you and adapt. Otherwise it's, you know, literally 2, 3, 4 years of design for some things because people are risk averse. Now the flip side is you need to make sure you work with a legislature. You need to make sure that you're managing your risks appropriately. There are some things you can't take a do, learn and do approach on because they're so potentially high stakes in the public sector. But I would note that that's actually one of the biggest shifts is getting the incentives and the mindset so that people feel that they have the space to actually experiment.

- I thank you. This has been very informative. I've been concerned about government competence for a long time. One co one, just one comment that the reducing the cost of the toilet from 1.7 million to 300,000 is great, but you can still build an A DU an entire A DU for 300,000. So there's more to go, right? My question is, corporations do have the incentive to continually and incrementally improve processes to increase profit to speed to market. Government goals are different, you know, to serve the public. But how do we incentivize legisla legislatures to direct the government bureaucracy to do many of the things that you're saying? 'cause I think it's gonna have to come from the legislature driving it, not just the bureaucracy, right?

- Maybe, maybe David should start with that.

- Yeah, I have a Sure I can start with that by the way. I want to answer your A DU question. So for decades in San Francisco we had 30 to 40,000 illegal ADUs where government would not acknowledge the existence of units added on for grandma or for tenants. And when I was in the city legislature, I authored the first law to finally legalize in-law units. It took a year of bringing lots of stakeholders together and we were so excited when that happened, front page story, and I say front page because everyone assumed that it was gonna happen. I then leave the local city council, go up to the state legislature, come back a few years later and I said, Hey, what's going on with in-laws? And was told a handful of in-laws have actually gone through your process to be legalized in part because your law reflected so many compromises that it was an virtually impossible process for folks to go through. And we have had to go through multiple, probably at this point a half a dozen variations and amendments to the law to get it to be to a place where it's barely workable. So the cost to actually build an A DU is way more than $300,000 in San Francisco, unfortunately. San Francisco. Yeah. In San Francisco. So, and I'm sorry, the question was on how do we inform legislators? You know, part of it is conversations like this where I go back to my former colleagues and I say, I explain to them what I've now seen. I've almost referred to it as a road to Damascus sort of conversion experience where I had this perspective that as legislators, you know, we are in, you know, article one of the US Constitution and the first article of most state and local charters put legislators at the beginning of the process. You create the law and your Moses bringing the Bible down, right? You've written it and the expectation is thou shall happen, make it happen. And I think more and more legislators are starting to understand that that is not the case. And a little bit of feedback loop is finally starting to happen. And we've gotta break that dam. We have to educate legislators on this process, but we also have to get the so-called bureaucrats, the folks within the bowels of those agencies that are doing the work to engage very directly with legislators and create that virtuous feedback loop and, and create a collaboration that right now politics. I could talk for an hour about all the political disincentives that prevent those conversations from happening. And why is it that legislators in the first place enact the laws that they do. But there are many aspects of our system from how elected officials are voted into office, how they campaign, who they're beholden to, to who lobbies 'em once they get in there to the feedback loop that they're not receiving.

- So I wanna jump in on this too. Yeah. Because I think that there's actually an origin problem in a lot of this, and I'd love to get your views on this too. First off, not every problem requires legislation. So can, can we just stipulate that many laws are passed because one or two things go wrong in one location and then somebody jumps up and says, everybody now has to do X. And they layer on some layer of requirement as opposed to what I thought I heard this morning in the conversation about constituent care and service, that you could actually go in and solve the immediate problem and not have to layer on a legislative solution. So one thing there, two, I think that you spoke about education, this is so important. Our legislative chairs of committees do not do a good job of educating new legislators about what legitimate goals and priorities they need to be pursuing collectively. And so we end up with a, a, a smorgasborg of things. And then the third thing that I would add on is that we don't have the virtuous feedback loop of going back and reviewing whether any of the stuff we put on the books Is outdated, contradicted, duplicated, whatever. So we could definitely clean house with what we have today. So if we resist the idea of rushing to putting bills together, if we educate around what bills should have priority, and if we prune the regulatory bush or the legislative bush and the regulatory bush, I think we'd be in a very different place.

- Yeah. I - Just we're just about at time, but if you could

- Give a brief, I'll just briefly say, I think if I heard you correctly, you were saying the legislature should take over.

- You're right.

- Well, I, I find the premise that legislators are number one, I think there's legislature and then there's an executive. Legislators are not the executive very simply. And at least in my experience, they're not competent to be either, would I trust a legislator on how to run a call center just as a premise. The answer is no, I think, but there is accountability that should be maintained from the executive. And there's the, but the idea that greater intrusion of non-professionals into sometimes like, you know, it implementation or something like that will lead to positive outcomes. I would also note there's a high risk, I'm choosing my words carefully of the equivalent of corruption capture that then you get into the situation of make this happen for this institution, make this happen for, and I would note that many, many civil servants are under that pressure, putting aside the federal government on a daily basis, precisely originating in the legislative branch of government.

- I'd surpr a good place to end, I think, on the role of legislators because we elect them and ultimately their incentives do come from the public. I've started saying that I think we think we are electing people for their ability to plant seeds that will grow into something that provide shade or fruit or flowers for the public. And we're starting to recognize those seeds aren't growing. How many laws did it take to get to the ADUs? And if you think about it, of course they're not growing because the job of gardener, if anyone here has ever gardener, is not planting seeds. It's tending the soil. The soil has to be, has to have the right pH, it needs water. You need to pull out the weeds that came before possibly using LLMs to mix terribly. There needs to be the right sun. And if we are electing our legislators to plant seeds without caring for the soil, that's on us. And I think a lot of this does come back to what the, the incentives that the public creates. And also they should have, they should have taken the first option on the commissions when it came to that. Yeah. Right. But so, but we, I think we all, every one of us has a role in educating our fellow citizens about what it means to be a good voter and a good citizen in this day and age. And I hope that you will all take these lessons to heart. So join me in thanking our panelists and thanks for.

- All right, well welcome to this panel on this wonderful conference. Despite all the differences that we may see and political views and social views, I would hope that we could agree that competence is a good thing. And so I'm delighted that we have a chance to talk with this panel about this issue because when you look across the world and you think about the state of democracy, we can talk about the state of institutions, the state of elections, the state of confidence of people in their democracies. But of course, very often what citizens of democracy want to know is, does it work? Can I actually get the social contract, the goods and services, the the way of living my life in which government is supposed to be a partner? Does that work? And I always found in going around the world that this was often one of the hardest questions for young democracies because when you have people who've just found their way to democracy, they suddenly realize, well, we elected those people and they should be doing a good job. But as it turns out, it's a problem for mature democracies as well as citizens ask hard questions about whether their government can deliver. Earlier in the 20th century, we faced a technological transformation. Government had to change too. We reinvented the way we did manufacturing and education and healthcare and transportation and, and of course waging war. We needed new kinds of public servants, we needed different kinds of disciplines to be a part of their training. We brought scientists into the government in large numbers to try to help lead the country through the technological and scientific revolution through which we were going. Well, today, in the early 20th cen 21st century, of course we face a a similar period in which the technologies, the frontiers of technology are challenging. They are challenging governments to keep up. One big difference, of course, is that the private sector is really very much in the lead in terms of these frontier technologies. And so what is the role of government? How can government both access these technologies and create circumstances for the continuation of innovation and forward progress? Government must change again. And there is really a question, not just of the structures and the laws, the restrictions and the ways that government might support and amplify innovation, but it is also a question of who will do it. It's a question of the people who the government needs to make government work. And so for this panel, we have a great set of people to talk about beyond party politics, about the kind of public servant that we need. I get to introduce the panel, all of whom I know. Frank Fukuyama has long been one of America's great political thinkers, Frank and also Frank and I were also babies together at the Rand Corporation in the early 1980s when they hired us at the age of 11. Frank is the senior fellow at Stanford's Freeman Bogley Institute, and he trains public servants across the world. Scott Coper is director of national, the national government. That means the US Government's Office of Personnel Management. Since July of this year, he brings 30 years of management experience, but we know Scott mostly by the fact that he is a part of the valley. He helped really to, to set up Andreas and Horowitz, one of the great venture capital firms and a firm that we all know well. Scott helped build it from the ground floor up back when people wondered what an iPhone actually was. Scott was already at work. So we're grateful to have you back with us for this panel, Scott, and then Phil Ko. Phil Ko is a senior fellow here at the Hoover Institution, the Botta Chan Senior fellow at the Hoover Institution. Philip and I also served in government when we were babies back in the nineties, and Philip has served on any number of government panels and commissions and is a professor, was a professor at the University of Virginia, Mr. Jefferson's University, when we recruited him to come to Mr. Mr. Stanford's institution instead. And so I'm delighted to have this, this great panel and I'm gonna ask each of them to just make a few brief comments. I'm gonna start with Frank and then Scott. And then Phil, and then we'll just have a conversation. Thank you.

- I should point out that Condi and Phil Zel co together exerted a lot of competence in helping to reunite Germany, keeping it in nato, and producing a Europe hole in free. And those were the great, great old days when we had diplomats that could pull things like that off. So I'm gonna get to the question of personnel and who should go into government eventually, but I actually wanna back up and talk about the broader problem that this conference is trying to address, which is, why is government competence in trouble right now? Why does it seem to be decreasing? And that gets you to the fundamental problem of what's wrong with the American bureaucracy today. So I think that the fundamental problem is, is in a way the opposite of the conservative diagnosis of government today. A lot of conservatives will say the problem with bureaucracy, especially the federal bureaucracy, is that you have a bunch of unelected bureaucrats that are out of control. They're making laws that have a liberal bias and they're not under the control of their elected of the people's elected representatives. I actually think that that's 180 degrees wrong, that the problem with the bureaucracy that we were talking about in the morning sessions is the exact opposite. That is over controlled, that there is too much political control over the behavior of bureaucrats, which puts them in the mindset of simple compliance rather than focusing on actual producing, producing actual results. Where this comes from is complicated. We wanted to invite Nick Bagley to this conference, and he unfortunately had a conflict, but I'd point you to a piece that he wrote in the Michigan Law Review, I think back in 19, in 2019, where he said that, you know, the problem is actually caused in many respects by progressives who believe that legitimacy comes from procedures and they want to use government to do good things, but they think that legitimacy is increased by layering on more procedures, and in the end, it prevents the bureaucracy from actually making decisions that concretely help people. And I think that that's a fundamentally correct diagnosis. Now, just to back up this idea that bureaucracy is over controlled, there are basically four ways that political principles can control bureaucrats. So you can write ex anti rules, you can have ex post review, you have appointment power, and you have removal power. All of these, I think, can be used to excess. So in terms of ex anti rules, you know, something like the federal acquisitions regulations is a good example. You have literally thousands of pages of detailed rules about how to buy an office desk or a computer that federal agencies have to have to abide by. You have, I think, in many ways, excessive ex anti control. You have lots of hearings and a lot of litigation because people in this country love to sue the government. They love to sue the government for non-performance for doing the wrong thing. And in many ways, part of the bureaucratic bloat of governments is in anticipation of future litigation, somebody is gonna sue you for doing the wrong thing. And that's why you generate mountains of rules. Like if you do an environmental impact statement, you're expecting that you're gonna be sued by, you know, several dozen stakeholders. And so you wanna write the statement out in such language that you anticipate every single lawsuit that you will ever get. Appointment power is, is really the core of this topic. So we'll get to that. But removal power is, I think, you know, as I said, for some reason the main route to improving bureaucratic performance of this particular administration. And I think there's a real problem there, because in fact, you wanna limit the president's removal power because you want to protect expertise, you have to delegate authority to lower levels of the government that actually have the knowledge, the local awareness of, you know, what life is like on the front lines. And that's the reason why you actually create for cause removal provisions that prevent the president, for example, from removing the, you know, the governors of the Federal Reserve Board right now, I think that if you think about the American political system in comparative perspective, you have this one. One way of distinguishing between different political systems is in terms of what political scientists call veto points, right? How many parts of the government can actually stop something from happening? And I would say that there's a spectrum that has China at one end of the spectrum, where there's basically one veto point that's Xi Jinping. And then I would say I, I dunno a little humorously, but I think the state of California is at the far other end of that spectrum, just to give you a and, and you can design different democratic systems with more or less veto points among modern democracies. America has more veto points than almost anyone else. We have an upper house that is very powerful. We have an independent judiciary that can overrule legislation. We have delegation to state and local governments. Many other democracies really do not have, you know, these kinds of provisions. In addition, we've added extra veto points. You know, the filibuster rule is one that requires super majorities to pass ordinary legislation. And then we have a lot of non constitutional veto points. So Diego Zambrano has been writing about private right of action in California, in the state of California, we have this law called CA, the California Environmental Quality Act that was passed in 1971. It gives standing to all 40 million residents of California who can sue any project, public or private anonymously with no statute of limitations. And one of the reasons that it's very hard to do things like build a high speed rail is that, you know, every kilometer of track is being sued by somebody under this particular provision. And so I think that, you know, in a way, all of the political scientists have really not done enough work in thinking through how you would actually redesign that system to make it still democratically accountable to make sure that bureaucrats are actually acting within their mandates. But it can actually do things. I invented this term, Vito in one of my earlier books to describe the American system as it had evolved in the American system. We delegate veto rights and veto power. We do not delegate the, the ability to actually push things to a concrete decision that is good for, for citizens. And I think if you're thinking about how to deal with this bureaucratic blow, excessive procedural and so forth, you need to think of not just getting rid of individual, you know, permitting rules that are obstructive. You need to think about the structure of the system as a whole. How do you reduce the number of political veto points? Because you can get rid of a whole bunch of permitting rules, but the system is just going to recreate them, you know, in, in a matter of months or, or or years because of the, you know, the structure of the way power is distributed. I'll just give you one example of how you can delegate power in a more effective way, and it actually doesn't have to be done by statute. And that's what the Army did in the wake of the Vietnam War. Army's performance in Vietnam had a lot to be desired, and the army is actually a learning organization. They, under the training and doctrine command and other authorities within the army, they reviewed their performance, they changed the basic doctrine under which especially officers trained adopting. It was actually a German concept called Tro Tik, which basically said that if you're a senior officer, you want to delegate the maximum amount of authority to the lowest possible command level because they are the ones that really understand the tactical situation. It is the second lieutenant that's trying to assault the building and not a general, a couple hundred clicks back at headquarters that is gonna know what the best thing to do is. And I would say that, you know, the army in that period in the, in the eighties and nineties that led to the, you know, the Gulf War in 91, the successful operations and both Gulf Wars actually had adopted this kind of decentralization of authority and the empowering of junior officers. They have a concept called freedom to fail. So there was a discussion in the earlier panel about innovation. You cannot get innovative behavior if you are going to punish people for taking risks. And one of the doctrines that the army developed was your career does not end. If you make a command decision that doesn't work out, you know that your superiors are gonna look at the conditions that you were facing on the ground at that time. And if it seemed like a reasonable risk, they would, you know, they, they would not hold that against you. They would not derail your career for that. And that is something in civilian agencies that is really, really hard to do. I think this was mentioned again in the earlier panel that we don't empower people to take risks. We punish them for taking risks that that go wrong. And so I'm just gonna leave it there. I think that the, if you think that the, the need in the bureaucracy is actually to empower bureaucrats to use common sense judgment, their longstanding collective experience, you cannot do this safely unless you have the right people in charge. You're not going to delegate lots of authority to people with very shallow educational backgrounds, resumes, and so forth. I'll just give you one example of that. You compare the TSA to the Federal Reserve, right? The Federal Reserve is full of people that have incredible experience in financial markets. They've got PhDs in economics, extremely high levels of capacity, and we permit them to have incredible discretion. They can say, this bank, we're gonna say this bank, we're gonna go let go bankrupt, right? The TSA deliberately was staffed with people with only high school educations, and you're not gonna trust that kind of person to make a complex judgment about, you know, does that person look like a terrorist? Are we gonna inspect, you know, their bags, make them take off their shoes, and instead you just give them standard operating instructions. Everybody has to take off their shoes when they go through the TSA checkpoint. And the difference between that is really all about capacity. So if you're going to do the kind of reform that I think a lot of the people in this conference want where you actually allow people in the bureaucracy to use judgment, they've gotta have good judgment, they've gotta be capable of doing that. And that means that you can't safely delegate that authority without also worrying about the personnel issue and the human capacity issue in your bureaucracy, right? That's it. Thank you. Thank you.

- Sorry. Thank you Frank. I, I actually, I agree with a lot of what you just said, and so I, I'm gonna try to add a few things. So first of all, thank you for having me here today. I am obligated to tell you this because unless you've been hiding in Iraq, you might know that the government is shut down right now. So I'm here in my personal capacity, not in my official capacity. So I just wanna make sure in case my own speaking of risk, if my own OIG is watching this, I'm just here as a US citizen representing my thoughts here today. So I thought I'd, let me add a little bit to what Frank said. I, I would summarize everything from my perspective, very around competency to say, I don't think we have a competency problem in terms of the people in government. I think we have a systems problem, and that systems problem is a lot of the issues that kind of Frank talked about. But let me kind of give you a couple, I'm gonna run through at least what I believe are some of the key problems that I've seen that I think impact the behavior. And I'm gonna tell you a little bit about which ones I think actually are potentially solvable and which ones I think we probably need much smarter people to go figure out. Let me start with one that's not obvious, but we have an age demographic problem in the US government. So 7% of our workforce is under the age of 30, and that compares with about 23% in the non-federal workforce. And on the same side, we have 44% of our population is over the age of 50, which compares with about a third in the general workforce population. So one of the things I know that Dr. Rice is very passionate about, which I agree with, is how do we get technology? How do we get innovation in the government? And it's not only that it's, you know, young people are not the only people who can innovate and do technology, but we've gotta kind of solve that problem. And I'm gonna come back to a minute how we solve that one. Secondly, I'll point out, I'll summarize in very crass terms, I think what Frank just said very eloquently, which is we have a risk problem in government. So I can tell you just in my first three months, everything I hear from my team is if we do that, our OIG might send, give us an audit letter, GAO might give us an audit letter. Some congressional democrat is gonna call me up in front of their committee, they're gonna send me some nasty letter. There's this whole set of kind of urban legend, urban legends around litigation. So I'll just give you a very simple example. We, we use a lot of paper in the government, as you might know, and we send a lot of things out by paper. And the number one reason that I got why we had to, we could not stop using paper and instead using email was somebody might possibly sue us because they didn't actually see it. And we'd be, you know, all, you know, you know, basically go to jail for this, which is never gonna happen and quite frankly is not really a real risk. But we do have a real risk problem, and I'm gonna talk about that one. The, the sum of the risk problem in my mind is exactly what Frank said, which is people wanna take zero risk and there's no concept of balancing risk minimization versus upside capture. So I come from the venture capital world, as Dr. Rice mentioned, we live in a complete opposite world where quite frankly, we don't care at all about risk, and all we care about is the max maximization of upside capture. Now, I'm not proposing we do that in government, but there is a happy medium here that I'll talk about in a minute. We have a performance management and accountability problem in government, and that also ties to a compensation problem. So I'll just give you an example on performance management. So every year most agencies rank people one through five as part of their annual performance reviews, five being the highest, one being the lowest. Today in federal government, 70% of federal employees get ranked a four or a five, which means, you know, they are above average and 0.3% of people get ranked a one or a two. The in a population of two plus million people, it's just not mathematically possible that we have that level of dispersion of opportunity. And as a result, when you tie that into compensation, what happens is all the compensation is basically peanut it out to people essentially. So we have no differentiation in terms of kind of performance as it relates to compensation. Most people get a very small bonus that has very little incentive or kind of retentive value. It's a big issue that we have to deal with. Fifth problem I think we have is a speed and efficiency problem. So basically, at least my take is historically in government, the more people you have, the bigger the budget you have. That's how you derive power in government. I did a little experiment when I was going through my senate confirmation process and I asked both Republicans and Democrats on my committee when I met with them one-on-one, do you think we could actually cut money from the federal government? And I will tell you to a T everybody said you could take 10 to 15% outta the federal government spend and nothing would happen, which made me very, very happy to hear that. Now the problem is that will never actually happen because every single person in Congress is not motivated by what happens to the macro level. They're motivated by what happens at the micro level in their district. And so even though everyone agrees we actually spend too much money, unless we figure out this problem, which unfortunately is a very vexing problem, we will constantly have a spend efficiency problem. And finally, I think we have a narrative problem in government. One of my first meetings, one of my career employees came up to me and said, you guys, and when she met you guys, she was associating me with Doge and she said, you guys are ruining everything for the federal government. I said, why is that? And she said, because what we've told people all along is the reason to come to the federal government is because you have lifetime employment. That's basically the messaging that they've been selling people for a long time. And I said to her, which she didn't, like I said, first of all, if somebody told you that they're lying to you because there is no such thing as lifetime employment, unfortunately. And secondly, to me, that is a terrible narrative for how we actually attract people to government. So I'm gonna, now, now that I've given you all the problems, let me talk about some of the things that I think we can fix and some of the things that we're trying to do at OPM number one on the age demographic problem we have, we just have never done a very good job on recruiting efforts dedicated to early career people. And we're working on that very, very carefully. Now, part of the problem is, I think, again, we've kind of created this false dichotomy in my mind, which is you have to, at 22-year-old decide, do you want to be a 40 year career federal government employee, or do you wanna be a career private sector employee? In my mind, that's just a fallacy that we don't need to perpetuate anymore. And so we've gotta find better ways to allow people to do small stints in government, go back and forth between private sector and going to the narrative problem I mentioned, we have to change the narrative. So the narrative for me, for young people, for government, has got to be come to a place where you can work on incredibly hard, incredibly complex problems, incredibly high scale problems, be surrounded by smart people, be recognized for the work you do. And oh, by the way, if you decide you wanna go in the private sector, we have to be able to demonstrate that the private sector values that experience by being willing ultimately to hire you and compensate you for that. On the incentive side, we may not ever solve fully the risk aversion problem, but what I've been kind of trying to tell my team is let's focus on taking managed risk. And what I mean by that is let's at least encapsulate what the risks of something are, and let's think about what the upside opportunity is. And exactly to Frank's point, we're not gonna punish you for taking risks. If you've done the work ahead of time, you at least understand it. And we all agree that it's something to do. And yes, if I get hauled in front of a correctional committee, like that's fine. I'm happy to kind of answer to those questions. I'll give you a very, very simple example. So we manage retirement services at OPM. So as you all know, because of the actions that have happened this year, we've had a larger number of people leaving the federal government than normal, many of whom are retiring. So the burden on our team and retirement services is, is very high. So one of the solutions to that problem is we wanna make sure we have less dislocation from the time that somebody terminates from the government and gets their last paycheck. And when they actually receive their first dollars in the retirement side, traditionally that could take 60, 90, sometimes 120 days to get somebody a retirement check. So I asked the, I asked my team, I said, what about the thought experiment of can we do something called interim pay, basically, where we kind of very quickly kind of do a calculation, estimate what we think it is, let's do some work to figure out how much we wanna discount that a little bit. So today we actually do, we discount it by 20%, but the idea is, can we get you a paycheck faster while we're actually figuring out what's the right long-term, you know, dollars to give you? And not surprisingly, the first response I got from the team was, we can never do that. It's crazy. It's too much risk. So we actually forced them to quantify the risk. It turns out that if we were a hundred percent wrong with every single person, we anticipate retiring this year out of a $1.3 trillion trust fund that we managed for retirement, we might actually lose a million dollars out of that trust fund if it turns out we were a hundred percent wrong with our early calculations on everybody. Now, in my mind, like that is a perfectly rational risk to take, and I would be very happy to go talk to Congress about that. And they may disagree with me, but like, these are the kinds of things that we have to help people understand performance management and compensation. Just so you know, we put out some guidance already on this, but one of the things that we are gonna do is require forced distributions of rankings of employees in the federal government. So no longer will 70% of the people be ranked fours and fives today, actually, for senior executives, we've mandated that that could be no more than 30%. Similarly, we want compensation to follow that. So we put out guidance that says we want 60% of kind of incentive compensation to tie to those top 30% of individuals. And so we're working on things like that. We're working on accountability, making more people, you know, as close to at-will employees as we possibly can, looking at kind of, you know, riff related regulations, other things that kind of, you know, create challenges in terms of accountability from an incentives perspective. The other thing we're trying to do is make sure that we can have performance that actually tracks real performance as opposed to proxies for performance. So almost every government job today has degree requirements that are in the job descriptions that don't really kind of determine, don't distinguish between whether you might have been a Russian studies major in somewhere, or you are applying for an engineering job and you have a computer science degree. We also have minimum tenure requirements that are required in order to get promoted into various job levels. These are really, you know, kind of in my mind, crass proxies for performance that actually prohibit particularly early career people from being able to proceed and kind of move through the organization. And we wanna eliminate a lot of those things. Finally, on the spend efficiency side, I think the best thing we can do there, which is gonna be a problem, you know, with Congress, but at least on our side, is we can create the right incentives to incent efficiency. So as an example, in my organization, everybody's annual objectives now have efficiency as part of their annual objectives. And efficiency in my mind is, can you deliver the same or better level of service, but do so at lower cost? Whether that's through organizational changes, it's through technology changes. And so if we tie people's organizational performance and ultimately there are rankings to the objectives that we want, I think there's ways for us to improve here. So I'm gonna stop there because I know I don't wanna kind of overwhelm the the discussion, but thank you for your time and I look forward to continuing the conversation.

- Thanks. The hypothesis of the conference is that American people have this image that the big issue of government is what should government do? And that we think that that's actually not been the big problem with government. The big problem with government is people don't think it does the stuff it's supposed to do very well, and that would then raise an issue of that you can divide into the barrels of capacity and competence. So, you know, if, if I want to take an airplane flight, the capacity is the airplane. The competence is the trained pilot, you need both. Or if I use a, so a, a, a computer metaphor, if I wanna run a cool operating system, I need hardware and software, hardware. These are the structures, the capacities that a government might have to do useful work. Actually all the issues of laws and procedures and so forth, those are all hindrances that clog the sheer capacity to do useful work, even if your people were brilliant or they might have not have money. So you can, you do have to work the capacity side of the problem. As I put it earlier today, you can't run an iOS operating system on a 3 86 computer, but you also actually need the software, you need the competence side, and this is harder to examine. So let's just take a a case study. Let's just suppose we had a natural experiment in which the officials basically had infinite money, extreme authority, all the scientific knowledge, the best scientific knowledge in the world, and see what's left. Well, actually we ran that national experiment. It was called the COVID Crisis. It was the largest crisis in the history of the United States since 1945. It's a crisis that in the United States hospitalized 7 million people in the first couple of years. It caused the premature death. So about 1.2 million Americans. It cost the American government and discretionary fiscal policy in the neighborhood of $5 trillion to obtain that result. The United States spent more money on this problem than any country in the world. By any measure, the relevant authorities, by the way, were enormous. Congress passed every law that was asked of us, asked of it, and appropriated money hand over fist. So you had money, you had, and we had the best science in the world. We had the best hospitals in the world. Actually, before the crisis, people ran studies basically saying, what's your capabilities for a public health crisis? The United States, top of the list scored 83.5. You could compare that, say to Spain, 83.5, Spain was 66, Italy was 66 in the crisis. The United States did far, far worse than any other developed area in the world in its performance. If you compare it to Europe as a whole, probably the difference in quality of performance amounted to half a million premature deaths in the United States that would've been prevented had our performance been as good as Europe, half a million death. So if you com, if you break it down, you do the age adjustments and other things. Let's say you compare Spain to Florida, which actually has about the same median age Spain. Spain did 50% better than Florida in stopping premature deaths of its people In the COVID crisis, Italy did 30% better than Florida. Italy's median age is slightly higher. So this is a really interesting case to examine. This is a case by the way, that is not a niche case or an obscure case to Americans. This for every si, every single family in the United States formed judgments about government from being directly touched by its performance in this crisis. The le by the way, the, the partisan narratives about this crisis are mostly wrong. The democratic narrative is to blame Trump and blame people who didn't follow the science. The Republican narrative is to blame China and blame pointy headed elites. It turns out that that's mostly wrong. I led the COVID Crisis Group, which would've been a national COVID Commission had Republicans and Democrats decided they wanted a self-examination of what had gone wrong, which they did not, not all in each party, but enough. And, but we interviewed nearly 300 people involved in the crisis. Many, many, many documents. I participated in almost all those interviews myself. The same question by the way, and all those interviews came up again and again is the United States still a country that's capable of solving big problems? The lessons from the COVID War were not mainly about following the science. Operational challenges were at the forefront, not science, not money. The biggest challenges were to know what to do and be able to do them. It was really know how to do what needed to be done. There are three main cultures in governance. These cultures don't necessarily talk to each other very much. One culture is a culture of programs and process. People get authority and money for a program. Usually the way this works is interest groups spotlight a problem. People get authority and money to spend money on the program and address the problem. The programs are created to dispense money and they do that following the given process. The programs are often run by lawyers who ensure that the money is being distributed in compliance with the processes. It's a culture of compliance run by lawyers. Another is a culture of research and investigation, research and investigation. This is the dominant culture of high science. It's the realm of basic research. Some ethical reflection. Its strengths were apparent in the COVID crisis, for example, in the understanding of molecular biology and the National Institute of Health support for messenger, RNA technology, the Center for Disease Control nurtures cadres of disease detectives. However, research culture can also be insular and can also seem alien to ordinary people's daily realities and practical problems. Those disease detectives actually had no idea how to run large operations in a crisis. And by the way, had no operational authority to run them all. The operational authority were in state and local governments. The third culture is a culture of operations. This is a culture to produce results. It is a culture that can be resilient and adaptable. Since the operators actually have to adjust to the real conditions they encounter. You know, they actually, if the machine doesn't pick up the garbage can, they have to fix the machine. This is a culture that also can become insular and clannish in other ways. It is the dominant culture in most private firms, especially the firms that either make products or deliver services. The COVID war revealed a collective national incompetence in governance in the United States. Contrary to many media stories, the federal government had no real playbook for how to contain the pandemic. I've actually read the supposed playbook that the Obama administration is supposed to have left to the Trump administration. The playbook was a diagnostic manual for what questions to ask yourself in order to figure out what procedures and processes you would then invoke. There are actually no plays diagrammed in the playbook at all as to what you, what to do if there was a pandemic. So for example, the government did not have it had programs. It did not have preparedness. For example, many of you may remember the business about ear right at the beginning of the crisis. Gee, tests, we need tests to see if people have COVID. So we needed in very short order, millions and millions of tests. They produced them, by the way, very well and very quickly in South Korea or in Germany. By partnering with private industry, we had no readiness to partner with private industry to make tests and had no industry to make our tests scale. Even if CDC had designed their tests correctly, even if we had the tests. However, even if we had a million, 3 million, 5 million tests stockpiled in the warehouse within a few weeks, we had no strategy for how we would use such tests. For example, do you use the test to do biomedical surveillance to see the progress of the disease? Do you use the test to do screening so you can figure out how to get, let people go to work or let people go to school? Do you use the test for diagnosis to determine how or whether they should be treated? It turns out those three different purposes have three different kinds of tests with different time elements involved and how long it takes to get the results. What you do with the results, what level of quality you need. We had no strategy for how to use the tests even if we had them. And then when we did start developing strategies, we didn't have any plan for how to bring the Food and Drug Administration on board with the strategy we had. That's just one illustration among several. No one in the federal government really knew who was in charge of orchestrating the response. By the way to this day, the basic confusion about crisis authority, there was a ton of authority, but the confusion about where that authority was and who should wield it. Roles and missions, including the proper role of the CDC has never really been addressed to this day. By April and May of 2020, federal crisis management simply collapsed. The local authorities thought that the restrictions on where people could go and schools which they put in place, they thought those restrictions were only going to last for a few weeks. No one had a plan for what to do next. After those weeks, the authorities in turn were flying blind because they could not track the outbreak's progress until patients started showing up in the ERs. As these failures intentions became apparent, they fed a toxic politics that further divided the country into the crisis rather than bringing it together. It turns out you heard all the red and blue rhetoric in the crisis. When you look at it closely, red and blue states actually adopted surprisingly similar approaches on the ground in what to close and what to reopen. It just didn't sound that way in the rhetoric. Practical tools to reopen schools and reopened businesses could have been deployed much sooner. Incidentally, it's interesting to notice the United States kept its schools closed about twice as long as they kept their schools closed all over Europe. So it's not a liberal conservative point at all. It's not like, you know, Europeans didn't follow science and we did. They figured out how to reopen the schools. We didn't. Most communities just didn't have the know-how for how would we go about reopening the schools. There were Americans all over the place trying to improvise and figure out how to do it. But you couldn't get that worked into the people who had the authority. So most communities just didn't have practical guidance about how they could use the tools they had. Meanwhile, the CDC was misjudging how the virus was transmitted, and that was a problem in which one set of elites was actually disregarding another set of elites. The elites who did biology using tuberculosis models from the 1920s, which were out of date and irrelevant to this. Were not listening to the people who did occupational safety and health work with aerosols, mostly from more blue collar universities who actually knew a lot about how you could adjust these sorts of problems, but they weren't listened to. That was a lead on elite problem, not the problem that elites were all pointy headed. So our leaders are now, as the pandemic goes into the memory hole with no serious self-examination, you can treat it like it's an escapable tragedy. It was as if a hundred years ago, accepting that life brings fires and floods. It never occurred to anyone that there could be such a thing as building codes or levies. So what we need to learn from this crisis is how to meld those three operational, those three cultures of governance and practice. What the COVID war exposed, what every recent crisis has exposed even in Iraq and Afghanistan, is the erosion of operational competence in much of American civilian governance. Look for example, at how often governments and agencies had to hire management consultancies, McKinsey, the Boston Consulting Group, Bain and Company and a number of others to perform basic operational tasks. It was telling how often such firms were asked to do the work itself to staff leading officials and organize the management of the crisis. It is one thing to hire contractors to take on specific tasks is another, to just outsource the contractors. The policy design work itself, that is the point at which the government simply outsources the know-how of governance. And by the way, the consultants didn't always know what to do either. On the high side, what you saw though is among the American people, the American people were often terrific. They were fighting a system that made success, that made failure easy and success hard. They were improvising all over the place. Operation warp speed is a famous example of this by the way. It didn't score its main success in vaccine development. It actually in, its in a kind of natural experiment in its mRNA vaccine development. Pfizer, by the way, did not even need or use Operation Warp speed. Warp speed was a belated initiative that was improvised by career bureaucrats, outside experts and administration gadflies. It scored mainly because it helped to manufacture the vaccines eventually, even at Pfizer, it sustained competition. It hedged across a whole portfolio. So the world was not just betting on unproven mRNA technology, it set up a strong plan for national distribution through America's drug stores. It was an improvisation staffed from the Pentagon. Thanks in part to general mille the private sector and gifted career officials, it showed that the American potential was still there. So what I want to close with then is to step back and at least use this crisis of learning experience. A lot of people think that there is this divide between the world of policy and implementation or policy and administration Policy is the high-minded work of people who say what to do. Implementation administration is the work of how to do it. It's the job left to the hewers of wood and the drawers of water. My view is actually anyone who doesn't think about the how isn't doing policy. And that's in a way the lesson we need to take away is we need to expand our definition of policy to be sure that we can demand competence from our public officials and the people beneath them who have to figure out how to do things, not just what the goals should be. Thank you.

- Alright, well thank you all for those great interventions. And what I'm gonna do is I'm gonna give each of you a question to follow up and very briefly and then we'll open up for maybe 15 minutes or so from the audience. So let me start with you Frank. You made an impassioned plea for the expertise that one finds within the bureaucracy. I certainly found that when I led the state Department in the foreign service. But there is another part that says, but if you want to reform, you don't wanna be dependent on people who've just been in the old system. And I will say that I often found at the State Department that it was hard to get people to think differently. So how do you square the idea that you want the kind of deep expertise, the people who've been there, the people who've seen it with the tendency of the people who've seen it to say, well that's not the way we've always done it. So how do you think about that problem?

- Well, there's no single way to manage that. I think that a lot of times fundamental disruption is actually a good thing because, you know, sometimes rather than just piecemeal reform, you gotta really rebuild the building from the foundation up. We were talking about this in our private session this morning, but in my view, actually the kind of destructive work that the current administration has been doing to the bureaucracy may actually clear the ground away for a more fundamental and, and I would say more correct reform down the road. You know, just for example in in this business about removals, although I think that firing random federal employees just to get head counts down is not good policy. It was in fact very hard to remove, you know, officials that weren't doing their job. And I think that the authority of the executive authority of presidents in the future is going to be changed in ways that will give them more flexibility in designing the workforces that they want. Hopefully a wise future president will keep the expertise that's necessary and you know, get rid of bad performers in, you know, in areas where they really deserve to be replaced by somebody else. But I think sometimes it does take a crisis like this, you know, to really produce the political conditions by which you can actually preserve the, the basic capacity of your, of your government.

- Yeah, it's, yeah. Scott, I'm gonna ask you about younger people or people for whom it's not so long since degree we talk about it. But just to follow up on Frank's point, I do think that one of the perhaps mistakes of that early and, 'cause I do believe that you had to, you had to level the playing field or level the ground, right? But one of the mistakes might have been if you offer that you can leave with a very nice package. Any you've been in business. Yeah. Any business knows that the people who will stay are the people who have no options and the people who will leave are the people who have options. So actually you end up with what we call regretted attrition instead of unre regretted attrition. And I just think that might have been a different way of thinking about trying to clear out some of the underbrush, if you will, in, in the federal government. But Scott, I wanna talk about one of your five points, which was that we, we are, if you look at the private sector, the federal government is very age balanced toward long, long service, right? And, and if you put that together with the need for technological revolution in the government, we all know that if you want to properly take pictures on your iPhone, find a 12 year, there's just something about the technology, the willingness to use it, the almost internalization of it that comes with people who have lived in that world. So how do you think about both technological reformation? I mean, when I got to the state mayor, we had Wang computers, right, for

- Instance.

- And there are still mainframes,

- We, we still have mainframes in my depart

- Mainframes that are running things. So how do you think about that and recruiting the younger talent? Because another casualty of the early stages of ADOS was that some of those probational of employees were actually younger people who'd been brought in with say, data science skills. And then were on the cutting room floor. And I would just add, as somebody who preaches all the time to my students, oh you should do public service. One has to be careful that you send a message that public service is both worth doing and respected. So talk a little bit from o from OPM, which is really the epicenter

- Yeah.

- Of hiring how you think about those

- Issues. Yeah. So a couple thoughts. Lemme just make a quick comment on your, your 12-year-old comment. So there's a very well known German physicist, max Plank who kind of was physicist in the, you know, kind of late 18 hundreds. And he wrote a paper and it, it became a little, the title came a little bit bastardized. So basically the thrust of his paper was technology advances one funeral at a time. And unfortunately, I think this is true, which is, you know, there's no question that if we want the US to be a technological leader, this age demographic problem clearly is a problem. So I, I think there's a couple things we have to do. One is, as I mentioned, is we have got to change the narrative. So the narrative to me, that kind of lifetime employment is what is attractive about federal government. To me it's just the wrong narrative. You know, I've had the pleasure of managing people for a long time now my sense is there's basically two classes of employees basically that I've uncovered. One is there's the pure mercenary class. The government is never gonna attract that individual. We are never gonna solve a pay gap problem if your goal is just, you wanna make the maximum amount of money possible. So like, I just think we should stop trying to solve that problem. Like there, you know, for all the problems in the GS pay scale, we're not gonna solve that problem. And I, and by the way, I don't think we should, but the good news is, I think that's a relatively small class. My experience has been that most people take a job because they believe they're working for somebody who cares about their career development. They think they can learn, they're gonna be surrounded by smart people, they're gonna be challenged. They can have a career progression path that recognizes their performance and you know, and they're, they're motivated by the mission. They believe in the mission. Like that's what we need to sell young people on. And so one of the programs that we're working on is, as I mentioned, this idea that you need to decide to be a career civil surgeon, in my mind also is just a very, you know, unfair thing for people to do. So we're rolling out a program post, you know, shutdown, hopefully targeting basically two to four year employment opportunities for early career people in government. And the whole idea is exactly that, which is bring them in, help them be motivated by the mission, and then we're gonna partner with the private sector. And my hope is the private sector then is gonna hire these individuals into the private sector after their government work and demonstrate that the private sector actually values the work experience they had. And so if they more are more on that mercenary side, they actually will, you know, kind of make up from a compensation perspective. So I think we have to kind of do stuff like that. And then to your point, we've gotta solve a lot of the other things I talked about, the performance management problems, things that kind of create an environment where a really smart individual can't be, you know, kind of promoted through the organization. Yeah. So, you know, since we're talking about Doge, as you recall, or you may recall, you know, there was, I won't mention his name, but there was a very famous doge engineer with a name that's inappropriate to say in this, in this forum, but there was a quote from the somebody at OMB actually saying we would never have hired this individual because they didn't have a college degree and they, they had never worked before. They had no job tenure. And I wrote a blog post on it 'cause it really bothered me. And I said, look, like this is these types of things. Basically those create low performance cultures. So we've gotta create a culture where if we have someone who actually has the skills to operate at a much higher level, even though they haven't gone to college or they don't have a minimum tenure, we ought to have a system that enables that. Right? And right now the system is just so tenure based that it's really impossible. So I think as a combination of all those things, we have to do Dr. Rice to make this possible.

- Yeah. Well and a couple of very important founders, if you just had a college degree requirement

- Yes.

- Not have made it. Yes. Which is something that the private sector exactly understand. Yeah. I I would also say, you know, when I was secretary, one problem, and, and Philip will realize that will recognize this because he left the horn service early, you can be in the foreign service and for the couple, a couple of terms or a couple of of deployments, you end up stamping passports someplace. Right? So you also have to give younger people something interesting to do. Yes. When, when they get to service. And Philip, I wanted to ask you your, your COVID example is obviously very important and I I wish we would go back and study it, but the United States is a very complicated place. Yes. Maybe Spain's complicated. Italy, certainly complicated, but not at the level that the United States is. You mentioned toward the entry, toward the end that we have the state and local authorities making decisions. So here in this area, Santa Clara County had extremely strict rules, including, for instance, that if I'm a golfer, you, you couldn't play golf despite the fact that it was kind of God's gift to COVID. Right? And they put out a list of sports that you could play, including single, single person volleyball. Now I, I said that this was probably the kid who was not ever chosen in choose up at any point who wrote this. So that was Santa Clara County. And if you crossed San Francisco Creek into San Mateo County, you had very different rules. So the United States is just a very complicated place. We're 330 million people. We are fiercely independent about what we wanna do. You have state and local. Do you think some of this is explicable by just how difficult the, the federal government didn't have all of the levers? And if the, if that, if the answer to that is the federal government didn't have all of the levers, was there a mistake in not understanding the proper role of the federal government versus the role of states and localities?

- Well, that's certainly right. The, unlike several, unlike other developed countries, we entered the COVID crisis with a public health system that represented the acme of understanding of the Grover Cleveland administration. I, that's it. We, it was really designed around the state of the art of public health authority in 1890. And so all operational authority was at the state and local level. All the CDC had no operational authority in America. Now it turns out then all the, there are these 3000 entities. By the way, California is an interesting case about half the states, it's at the state level, about half the states it's delegated down to the counties. California actually, you know, people think California's a blue state, but in from COVID analysis purposes, well, it depends on the county. It was principally red at the county level. So actually you have all these red and blue counties, Santa Clara maybe being a bit on the blue side. Now then what's happening is since the 3000 counties all themselves don't have, don't know what to do, they're then looking for advice. So the cd, they're looking to the CDC to give them advice. So on this business of, and then the CDC has these biologists who actually themselves don't know how to run programs. And then there are other people in Washington who were supposed to do quote, there was an Assistant Secretary of health for quote, preparation and readiness. Asper was the acronym in the business. And then there were big conflicts of authority over what the Asper could do and what the CDC could do, though neither of them had operational authority and Washington also had a lot of the money. So what then happens is the biologists look at this with their TB models and give the kind of health guidance that tries to keep condi from playing golf. Yeah, right. Okay. And meanwhile, there are occupational health folks, other elites who are saying, well, that's crazy. We know a lot about dangers of aerosol exposures and so forth. So we've studied that in these other environments. But those, those elites didn't have the, in, it's in it CDC in Atlanta. So now we're, it's not so much a story of elites versus the common sense of the masses. This is actually a, a story of the sociology of American elites, which when you live in this world, these are the most familiar stories of all. So then you do have a, yeah, it's, it's complicated in that way, but if you're trying to think about, okay, how does, how do we prepare for national emergencies? An aspect of collective civilian competence is to prepare and train your people. And some of that is, you know, you allocate authorities and then you train people in order to choreograph the things they'll need to choreograph an emergency. One of the interesting things about Florida, by the way, is Florida was very good at certain aspects of the crisis because Florida, like actually a lot of the Texas Gulf Coast had a ton of experience with emergencies.

- Yeah. - So actually the, the, usually it's an office of emergency management at the state and even down at the county and local level who are often really quite good and have very capable people. And then, so in certain aspects of the crisis, if you could tap that expertise and use those people effectively, they would function very well. So we have all these strengths and weaknesses. And so in a sense, the competence part is putting it all together in a country that, unlike Spain and Italy, had vastly more money, vastly better hospitals, way more doctors, you know, all these resources. And so when, when you, you have all the resources and the science and you apply it so much less effectively, that's the variable we're trying to get at here.

- Yeah. I I'm gonna turn to, oh, go ahead. Right. Can can I just Yeah, of course.

- Make a So Condi, you're right that this is a very complicated country.

- Yeah. - All the ethnic regional geographical diversity other countries don't have, but we make government unnecessarily complicated. Hard. Yeah. Right. So David Chu is giving these examples of, you know, why does the city of San Francisco, you know, need, need like 180 oversight commissions? And state of California is a really great case of this 58 counties, something like 4,500 independent commissions. My colleague Mike Benon has been talking about this short four and a half mile section of freeway that was supposed to have been built in the late sixties to connect the ports of Long Beach and Los Angeles to the main freeway system. It's been blocked by the city of South Pasadena for the last 70 year or 50 years. You know, and so when you combine rules that empower, you know, these very small units with veto power,

- Yes.

- You get, you know,

- You get what you get

- Stagnation.

- Yes. It's often done for these progressive reasons,

- Interestingly. Yeah. Yeah. Okay. I'm gonna turn to the audience. I just wanna say one thing, one, one time that we actually did get a lot of this right was after nine 11, Because you can, I know TSA is not great, but when you think about being able to reopen airports within a relatively short period of time, given what we knew about terrorism, new rules, about what you could and could not take on a plane. And by the way, we didn't just get it in the United States, we actually internationalized it very quickly so that if you go to an airport in Madrid or in Abu Dhabi or in London or in the United States, it pretty much looks the same from the point of view of international travel. And it might be interesting in contrast to the COVID, where we really didn't have much internationalization to understand better how that got done pretty quickly, by the way, with most states very quickly creating offices of Homeland security, which they did not have on the day of nine 11. So that might be a little bit of a counter example to, to look at. Yes. So few questions from the audience. Yes.

- I'm Robert, I'm a sophomore at Stanford studying history. I wanted to address a question to Mr. Cooper, which is basically, I think of, you talk about the mercenary class as this kind of minority that's a minority problem. It's not really reflective of the federal government, but I wanna push back on that a little bit just because, for example, the Department of Justice, like the incentive structure for lawyers to go into like private law versus the Department of Justice as Assistant Attorney generals is completely backward. And so I think that there is a very big problem that you're missing, which is that we've lost our virtues, I think, within the federal service. And so I wanted to introduce a quote that Professor Kennedy brought up yesterday, which is interaction between William Allen White and his first meeting with Theodore Roosevelt. I had never known such a man as he and shall never again, he poured into my heart such visions, such ideals, such hopes, such a new attitude towards life and patriotism and the meaning of things as I had never dreamed men had. How can we restore that like virtue and that honor in our, you know, employment?

- Well, first of all, we need people like you to come help us do that. So yeah, look, I totally agree with you. Look, which is, look, I absolutely agree that like, that is the best pitch in the world, right? The best pitch in the world is this is an audible place to be. You can solve great problems. I, I a hundred percent agree. And look, you know, we're living in a, in a, in a challenging time where, you know, we have some, I would say brand building to do for sure in that area. So number, I don't disagree with you at all. I think your a USA example is a great example, which is, you're exactly right, which is, you know, for people who, you know, didn't go to law school, if you go to law school, like a really prestigious job to get outta law school is to go to, you know, be an assistant US attorney. And obviously you get paid, you know, very little compared to what you could make in the private sector. But what you see, at least in my mind, I think what works there is the reason that works is because you actually get real experience that you couldn't get in the private sector. And then the private sector has demonstrated they value that experience by then being willing to hire aas into very prestigious roles in private law firms for people who decide they want to do that. That's why that to me is what we need. We need to demonstrate. And that's why I think these, these more temporary assignments are make more sense, which is we need to demonstrate you can do great work, that actually the problems you're solving are real problems. And those problems to the extent you wanna go to the private sector, are valued by the private sector in that they will be willing to ultimately compensate you for. So that's how I think we tap into that mercenary class. What I was trying to articulate maybe not very, very well is look like people spend a lot of time debating, do we need to change the pay scales in government? Like, in my mind, like, we're never gonna get there. You know, nobody's gonna vote for that anyways. And like, I don't think that's the problem. But I think if we can dispel this myth that you are making a career decision and that the private sector will value the experience you have, I think you can capture both the mercenary and the missionary side of the workforce.

- Yes. I'm gonna go here and then here. Yes.

- Dr. Fukiama, you mentioned the legal and other issues of California high speed rail. Bright Line is building a line from Las Vegas to Los Angeles and seems to have avoided many of those legal and other issues. Could you explain perhaps the difference between those two and how, why, why Brightline is able to build much faster and less expensive than profitable and so on?

- Well, the guy sitting right behind you can probably answer that question better, but I, I don't know the answer to that, but I do know that for example, the, the two states that are the biggest producers of alternative energy are two deep red states, Texas and Oklahoma. And the reason that they produce so much alternative energy is not ideological. It's that they've got a much simpler permitting process than California does. And so I do think that, you know, certain states, especially blue states, add this extra regulatory burden that makes it very difficult to do things like build a high speed rail. I mean, among other things, you know, one of the big problems in California with HighSpeed Rail is just where the track's gonna go. Because the most direct route from San Francisco to Los Angeles was derailed by the fact that, you know, the representative from Palmdale thought it ought to swing out, you know, through that valley before it went up north. And you've just got kind of macro political problems like that within the state of itself that I think have made it very difficult to come to an agreement on, you know, funding and then building the thing.

- And meanwhile it's getting more and more expensive and further and further out. And yes, right here, yes,

- My name is Ross. I am a senior here studying history and mathematics. I have a question for you, Dr. Zko. When you were talking about the conflicts within the government regarding COVID management, it seems that you're referring to a problem that repeats many times in history, which is you have a government with duplicate structures that all have overlapping a authorities, but none of them really has authority to run the operations. How does this happen? How does this come to be historically? When does this happen and how do you see us can possibly get out of it?

- Oh, well, and Frank has done a lot of work on this too, is basically constituent groups create the authorities they want of different kinds of constituent groups, and usually working through Congress to create particular bastions of authority to, so that you'll then have over rival and overlapping authorities. So for example, the, there was the Center for Disease Control was just supposed to be basically a group of biologists who were supposed to provide scientific advice to public health authorities. It didn't really have an operational programmatic role, but it wanted to build itself up and bulk itself up into being a public health authority. Meanwhile, there's Tony Fauci over at the National Institutes of Health, who by the way, doesn't regard himself as an epi. I talked to Fauci and doesn't regard himself as an epidemiologist and was highly critical of the CDC. Then over at the HHS, there was a notion we need someone running prepared preparation and readiness for a possible pandemic. So they built up that office, but that office didn't have operational authority either, and was vying for supremacy with other entities inside the Health and Human Services department. So, so how this arises is actually not such a hard question because different groups create the authorities they want, the authorities grow over time, they overlap and challenge each other. The, the hard part then is, okay, if I actually want to get stuff done, I have to figure out a way of how I reconcile these authorities. And as one of our experts put it during the day to day, how do we metabolize these conflicts? So I don't think there's you, you get to the world in which we magnificently design the DNA from the start so that it's all perfectly clear from the get go and it never evolves in ways that clash. So you have to manage the clashes and the the test in a way, and it becomes another test of competence. You manage the classes if you think clashes, if you think about what is it that we want to do? And then you work through the choreographies of many players that have to come together to do those things. If you really don't know what it is you want to do, if you don't map out the choreography, then you essentially move into a passive position where the cacophony of voices will just overwhelm the conversation. Yeah,

- Yeah. I also think, just from my own experience, one of the issues when it's a really big crisis, the White House wants to control, 'cause the President does not want it out of his control. And the White House is not the, whether it's the National Security Council, na, national Economic Council, whatever it is, does not have the operational capacity to do it. And so you then end up getting a lot of confusion from the political level. We had in the Bush administration, two crises pandemic like crises, very small, but avian flu, which was breaking out in China, same thing. We did not know what was going on. We didn't understand what was happening. And then over Christmas, a couple of years later, the Mad Cow disease, the president right away said, secretary of Agriculture's gonna handle these. And so it was a small enough crisis that actually was able to be contained within the Secretary of Agriculture, drawing on others as she needed it. But the minute it becomes a White House task force look out, because now it becomes a kind of political, almost a little bit political theater because the, the president who's elected to do this believes that he has to have control of it. And the White House is just not operationally capable. So I think another thing that happens in some of these crises is that it's one of the reasons, by the way, that President Bush decided right away to have a Homeland Security Council, first headed by a governor, by Tom Ridge and then a Homeland Security Department was to get it out of the White House. And I think sometimes the White House takes things into it that it shouldn't. Yeah. One more question all the way in the back. Yes,

- Yes. Hi Philip Howard, this is a question for Mr. Cooper. I've written a lot about the history of the civil service system and agree with you that the current system is broken.

- Yes. - And my question for you is, do you see a tension between the idea of a merit system and making federal employees at will employees

- Speaking for myself personally, I do not actually look, I think at Will systems are incredibly powerful systems. And I think, look, the private sector has demonstrated that very clearly. And I don't think there's any lack of merit principles that dominate the private sector. My understanding, and you would know better than I obviously is look, we worry about, you know, a bastardization of those merit principles, right? And do things that look like, you know, do they look like political justifications kind of cloaking themselves as merit justifications? But you know, just to put it on the table, from my perspective, look, the more federal employees that we could make at will or as close to possible as at will, I personally think that would lead to a much, much better system from both a merit perspective, from performance management, and from a ability to actually accomplish objectives.

- Yeah. Well, thank you very much. Thank you for an excellent discussion. Thank you for joining and for your attention and to our students here. I hope you've heard a good argument for perhaps doing government service at some point, if not at the federal level, maybe at the state and local level. Thanks a lot for, thank you.

- And this is basically on the great culture clash of the age, which is can do tech culture versus can't do government culture. A hundred years ago, this was a, the culture clash of the age then is the modern leaders of America who thought they were the business leaders of America, who thought mainly the politicians worked for them, were unhappy with the politicians because they needed them to do a lot of things so that America could, so that their businesses could thrive. They needed public schools, they needed railroads, they needed electrification, they needed a lot of things from government for business to thrive. And business put enormous pressure on government to become a different kind of government, one that could do the things business needed for the country to thrive. So back then, there was also a clash between can do business culture and can't do government culture as the America of a rural spoil system was adapting to the 20th century. So we now have the 21st century version of that problem. And to introduce it and moderate the panel, we have Philip K. Howard.

- Thanks. Thank you Philip. And welcome to the last panel of the day. I thought that maybe what we would do is actually focus on solutions and pressure the panelists and also pressure you on ideas of how we move from a, from a, from a paralytic system that the, that the other panelists have described towards the system of an operating system of government that can actually achieve the ends of the public without 30 year trained construction projects and such. So we have three panelists who are excellent in this Jennifer Polka you've already met, who is one of the leading experts about bringing government into the modern world in the Obama administration. She has a substack called Eating policy. It's one of the best written substack that I pay for.

- Thank you, Phil.

- In every prior life, Jennifer was a prosecutor and she goes after red tape and unnecessary bureaucracy with a meanness and a viciousness that's truly refreshing.

- To be clear, I'm not a lawyer and I've never been a prosecutor justice.

- Well, no, I didn't say this life in a prior life. Okay. See, see, long ago it, Josh Marquees spent 10 years as in, in the Secretary of Defense office in the Pentagon working on policy matters. He's now doing strategic initiatives in the public sector for, for Google. He can, because his job is to help solve problems, he will give us the answers on how to fix this. And finally, Dan Wong, whose new book, Greatneck, who the bestseller deservedly so is incredibly entertaining. We've written, it's, it shows how in fact Xi Jingping in his prior life was Robert Moses. And he simply makes arbitrary choices and everything gets built. And, and Dan is seen how, how the opposite public culture can sometimes, but not always, you know, get things done properly. But before I go to them for their solutions, I, I'd like to challenge one assumption that hasn't been questioned in these, in these public sessions yet, which is the assumption that, that the role of law is to prescribe or validate public choices. And I've written a book about it that was out, out front, but I've actually, I've written eight books about it. But the, the role of law in the public sector is actually to delineate authority and create checks and balances as the constitution does to safeguard against abuses of authority. And so someone who has a job as an executive officer, as a police officer, as a teacher, whatever, has to have room to use their judgment to do what's needed on the ground. Just as whoever was talking about, army officers have delegated authority to do such. What happened after the 1960s, and Mark Dunkelman has written about this, and I've written about this, is that we not only changed our values and, and when we woke up to the abuses of racism and pollution and other things, which we really needed to do, but we wanted to prevent any more abuses of authority in the future. And we actually changed the operating systems of government before the 1970s. There was no such thing as a 1000 page rule book. There was no such thing as 10 year processes to get a permit. President Eisenhower signed the interstate highway bill in 1956. It was 29 pages long. 10 years later, 21,000 miles of road had been built today you could, well, the laws are much longer, they're much more prescriptive and you couldn't get approval for a stretch of road for in that, in that period in some places. So, so I think that as we look towards solutions, we shouldn't simply look, look towards pruning the jungle or spring cleaning, which I'd like to talk about with you. Could, I think all of that is really important too. We also need to look at how decisions are made. How much, how much room do officials and citizens have to use their judgment and use their common sense to make things happen and be accountable for, for, for how they do. The Jennifer has really done enormous amount of work in the IT sector and has really cataloged all the ways of, but you've also been involved in some solutions to fixing things in the IT sector with recording America and such. So what are your ideas about how we could go from where we are today towards a new narrative of an effective government?

- Thank you. Yeah, I, thanks for having me back up here. Appreciate it. I think my solution for the IT sector and for government broadly are essentially the same thing. I don't, I don't think there's a difference. We have locked ourselves into these very prescribed and very detailed procedures as you say, that keep us from being able to do what everybody out there who is creating products and services that you love using does, which is test and learn their way to success. I'm looking at my colleague Andrew Greenway back there, who has taught me a bunch about this and done this with a lot of governments and shown some excellent examples. I wish we'd gotten him up here to talk about some of the ways that they have proven test and learn can really work in, in the UK and, and created much more scalable and, and robust benefit systems, for instance, because of it. So yes, I think you're right. It's not only that, but you know, when you look at the problem of say pandemic unemployment insurance failures in every single state, you, we accumulated huge backlogs. Everyone looked to co COBOL the programming language that is famously from 1959 as the culprit. But in fact, if you really wanna look at, you know, if cobols actually not so bad, in fact, if you buy a plane ticket today, you're using, you know, that system uses go ball and it works quite well. But I would look more to the fact that the training manual, for instance, in the out California employment development department for claims processor is something like 800 pages in New Jersey. The labor commissioner was called up in front of the state legislature as every labor commissioner was around the country to be yelled at about their backlog of unemployment insurance claims. And again, yelled at about the COBOL in the system and he pointed to the 1000, sorry, 7,119 pages of active UI regulations that govern, you know, how his state is, was supposed to give out unemployment, unemployment insurance. You just cannot make a system that is scalable and robust and can, you know, can scale from, you know, it had to, it had to go to 10 times as many claims or more in a couple of weeks if it's governed by that much detail. Right. And you cannot, you cannot test and learn your way to something when you are wading through that volume of rules and regulations.

- The, the, the the it you can do standup comedy on government today. The granularity of the rules, I I I've sort of done it is astonishing. There is a, a, a family or apple orchard in upstate New York that New York Times did a, the story about a couple years ago, they were, they were regulated by 17 different government departments had 13 clipboards in their office to keep it straight, regulations from all over. One of the regulations required them to put a, a cloth over the cart when the apples were picked to protect the apples from bird droppings when they're going from the orchard to the barn to be washed. Those apples a bit of the tree for five months. And the government does nothing to protect them. I mean, you, so, so, so you have this kind of, what, what what law Professor Louis Jaffe call this vision of rationalized completeness where every single possible event is detailed in a law or procedure and then you expect things to work well. In fact, the human brain doesn't have the capacity to, to deal with that. It, the human brain doesn't work that way. And so, so it's, so what's an example maybe in the UK too? I mean, Francis, your friend probably worked with Francis Maud, who's a friend of mine.

- Yes.

- And

- He did.

- And so, so, so Francis and I have talked about this over the years, Lord Maud, what are, what are, give an example or two of how you can shift from this kind of micromanagement regime to a, to a, you know, a kind of a more practical reason.

- Lemme give two quick examples, and I will start with doing my best summary of, of, of the project that I've, I've learned about that Andrew wrote about, and I believe the, the, his paper is out there, the radical how they had a program called Universal Credit, which brought together quite a few benefit programs. Imagine in the US if we tried to, you know, put Snap and unemployment insurance and various social services programs together in one, in one program to avoid or at least reduce the negative effects of things like benefit Cliffs and just make it simpler. You shouldn't have to apply for all these different programs. And Angela will just correct me as I get it somewhat wrong, but there was something like 10 years of this team trying to actually deliver a, a service to, to meet the, the new, this new policy that they had decided on. And it just failed and failed and failed and at actually very, very high cost. You know, lots and lots of money had gone into trying to create this system. They ended up rebooting it with a very small team. I think they kept a handful of people from the old team and added a few more. It was a deeply, deeply cross-disciplinary team. So you've got, you know, in most cases you've got like, you know, developers, you've got product managers, you've got lawyer lawyers. They also had things like the actual people who would answer the phones on the team. So they're actually understanding the reality of what happens when you are getting this benefit. And you have to call in, you know, for a question there, they're, they have those people on the team, they have social workers on the team, but a very small number of them. And they started with just one block, or was it two blocks, Andrew, one, one square block in London, and we're gonna roll this thing out in just one square block. And what they were able to do was actually test the policy and the implementation of the policy at the same time. And I hope Philip is, is still in the room because what he, yes, thank you. What, what he said earlier, but if you're, if you're not, if you're, if you're not actually doing the how, you're not actually doing the policy, this is a perfect example of that. They were able to iterate on the policy itself by testing it in the real world with real people. And there's much more to the story. I, I won't give the whole thing, but the, the end of it really is, you know, then they were able to scale it up and it was, it was functional at the time that COVID hit, which was great because he, as, as Andrews called it, it was like the dog that didn't bark. I mean, we had terrible failures in, in unemployment insurance here in the United States. And there, that program just worked because they really, they, they worked out all of these kinks and tested and learned their way to something that really worked.

- But just to clarify, they weren't, they weren't adding onto the existing programs. They were creating a new program.

- They were creating a new program that did what I believe 7 6 6 previous programs.

- Right? So it's a, which is a narrative I I'm gonna turn back to in this discussion, but the narratives is, is might be characterized as reboot or reform. And I think in that situation, it sounded like it was a consolidation and a re and a and a sort of new, I think

- It's somewhere between the two. Okay. I'm quite sure how you would characterize Yeah. Between reboot and reform.

- Okay.

- But let give you a, a contrasting example here in the us it's a good story with sort of a somewhat happy ending. We had another failure not related to the pandemic when Congress ordered a quote unquote modernization of FAFSA system, the federal student aid application, which resulted in sort of another mini healthcare.gov. Like it just didn't work at all. And big, big, we're in a college campus, I don't need to tell you guys about the impact of this, but it was particularly harsh, you know, for, for kids who were hoping to, you know, especially first generation kids going to college. And it was actually very much a similar playbook. They brought in a team from outside who really did things in this test and learn way, and they had that skillset, they brought it in and long story short, they got the FAFSA working quite well. The stats on it right now are fabulous people. Every, you know, people are getting through it and they actually have very high satisfaction rates. It is, is finally easier to use because they brought in this new, what we call the product operating model of which Joe test and learn is sort of the, the key piece. So that's great and all, but then along comes the government accountability office and writes up a 62 page slap on the wrist of all the things that they have done wrong. And that is a list of the ways in which GAO is a holding the department of education accountable to the old way of doing things, right? Because they didn't check that box and they missed that little box over here and how dare they x And the, but here's the nice end of the story, finally, you have the Department of Education pushing back instead of what I think so often happens in bureaucratic culture is, is okay, you got a bad ga o report, everyone hide under your desks and you know, go on the defensive and geez, please don't ever do that again. Never, you know, never experiment, never test and learn again. Instead, the Department of Education wrote back and said, you are holding us accountable to the wrong things. Here's what you said we should be doing. Here's what you should be evaluating us on. And you would've loved it, Philip, because it talks about the outcome. You, you should say, what are the goals that you're trying to set? And are you achieving those goals? Not, you know, where is the 79 page documentation of your, your contractor performance? It's like our kids getting through the system. What goals have you set? Are you, are you actually achieving those goals? And it's the kind of change that we need to see in the oversight of these projects. Like you cannot just change how these programs are developed. And I think there was too much of a focus on that by myself. I would even include over the past 15 years. You have to look at the front end and the back end of it. How are they funded? How are they conceived of, how are they staffed? Sure. Then how are they developed? But then your oversight needs to match this new model. And that's why we have to move all of these pieces in concert.

- Great. Great. Okay. So we're gonna to circle back around to some of these issues. Josh. So you were in the, you were in the Department of Defense defense for 10 years, twiddling your thumbs. Right? And, and instead of doing not much of anything,

- He was very, like, all, like all of the public servants we've been talking about, I was just like wasting taxpayer dollars.

- You were in it for the money.

- Yeah, totally.

- Yeah, yeah. For the body. So, so what, what were the, what were the frustrations, what are the things that held you back from, from doing the job and then following is how would you fix them?

- Sure. My time in the Department of Defense were, were the most beloved years of my career. I loved being a public servant and I loved the mission of the department. And most of all, I just have to say the camaraderie that you've experienced with your fellow public servants about the work you were doing and re reading about the things that we were working on in the headlines every day, every day. It made you really feel like what we did mattered. And it was important, but I did not serve in uniform. Many of the men and women that I worked alongside either were currently in uniform or they had worked in uniform one time, and they often talked about how shared adversity created those bonds. Whether it was, you know, you know, bootcamp experiences or for me during the wars in Iraq and Afghanistan, almost everyone I worked with had combat experience. And so as a civil servant, our adversity that we cont combated every day was the sense of sclerosis and a bureaucracy. And there, it really was true that there were a lot of inside jokes and a lot of sort of sh commiserating and a shared sense of being in a small coterie of people who really were passionate about technology and about Silicon Valley's ideas. And we felt like we were a very small group battling the rest of this very large organization, actually the largest organization in the world. And there was this sense, and we were explicit about, at the time, for us trying to modernize and reform the department felt like the battle of therm opoly every day to us. And so in some sense, we really did feel like there were many, many things that were holding us back. And you've heard about all these things today from the stage. And, and Jen is an expert at a lot of these things. And they had to do with the rules and the regulations about spending money, the, and how money is allocated, the rules and the regulations and the procedures and the norms around procurement and acquisition and how companies are selected for contracts, what those contracts look like, the procedures that you need to go through to award those contracts. And then the increasing inevitability that those contracts would be protested. And you would have, you know, I, I remember there were certain contracts I worked on where we spent years awarding those contracts only to have them ultimately canceled and have to be shut down and, and started again. And so, you know, and then I would also say another category of this was personnel rules. I, for one thing was a schedule A in the government, not a, not a civil servant in a traditional sense because I was never able to successfully pass the vetting process in USA jobs at any time. And so I was only able to be hired on a temporary basis under a direct hiring authority. And then I had to leave government because that was the term limited position. And that was one of the reasons I left. And so the inability to hire the people that you wanted to create your team, to shape your team and to discipline your team and make those decisions were, were all the sorts of things that we were, we were up against. And so that being said, if that was the end of the story, you would have an incredibly misleading impression of what life and government was like because for each of those things that was a so source of friction or a frustration or a limitation, I have to tell you, there were so many examples of people finding ways to solve these problems. Either, you know, the, the culture of getting the mission accomplished, being creative, thinking through how to solve these problems, you know, whether it was through technology or it was through reform or procedures. If, if we only focused on the barriers, it would not give you an accurate picture of all the remarkable things that people were doing to get things done. I'll just close by saying that the thing that if you look at it in totality that upset me was that, you know, we were charged with driving innovation in the Department of Defense. And our sense was is that in order to achieve that goal, you had to be heroic,

- Right?

- There was not, there was not a sense that we were creating a pathway or a process or a set of incentives to encourage the behaviors that our elected leaders, our politically appointed leaders were asking for. Rather, the people that were doing remarkable things in software and data, in ai, in innovation and hardware, in new concepts and new policies, they were all operating in ways that were unnatural to the expectations. They were taking personal career risk to do it. They were taking on an enormous emotional burden to be swimming upstream against that. And in order to get those things done, you know, they had to be truly heroic. What we would like to do is organ reorganize the system. It's norms, it's its rules, it's procedures in its laws so that we actually are encouraging the behaviors that our leaders are saying that they want from the department.

- Right. So as I, as I'm sort of trying to filter what you said, there were two points of resistance. One would be a cultural resistance by the, call it the old guard who didn't trust the new technology or something, right? That's a, that's an inter-organization issue, political issue, if you will. And then there are the, there are the legal issues, the federal acquisitions, regulations and such that are very detailed and that are basically impossible to comply with and get something good done because all of the different things you have to do for years and then it gets overturned or whatever. Right?

- Yeah, I'd say it's true, but also like not always true. So, so I'll give you an example of that. Like I think that the far is unfairly maligned.

- I've never heard anyone stand up for the far,

- I'm gonna stand up for the far federal acquisition regulations. So I'll say, so ladies and gentlemen. Yeah, so, so I, I will, I will stand up for the far, but I, but I will indict the Jags and the attorneys.

- Yeah, okay, fair.

- So the, so the, the thing is, you know, if you are a very knowledgeable expert contracting officer, acquisition officer and you actually have read the far and you know what's in the far and you are willing to tailor, which is permitted under part 11, then you can do anything that you want to do with far based contracting. But in order to do it, you need to have a warrant officer and attorneys and procurement and acquisition officials and an entire network of people around you willing to let you do what is actually in the far. So one of the great examples of this is special operations command, which is known in all of our defense circles and even in the popular sort of mythology of Hollywood as being, having the coolest toys. One of my friends and mentors and someone that you know, that we both worked with was a gentleman named Hondo Gertz, who at that time was part of one element, a piece of the special operations command sort of technology innovation team. And he later became under Secretary of the Navy as his career progressed. But anyway, hon was very fond of pointing out, yes, I get to do the coolest stuff and I have the coolest stuff, but it's not because I don't use the far I do everything that the army, the navy, the Air Force they can do, but I'm willing to tailor and do those things. And why was he willing to do that? Well, the culture of special operations command is completely different than the culture of the general purpose force. For one thing, you are usually double or triple selected to become a member of the special operations community. So we put an enormous amount of trust and confidence in the judgment. This is to your point, 'cause I listen to you all day, the trust in the judgment and these special operators. And so because we trust their judgment, because they, we know them to be elite and to be proven, we allow them to do things that we don't allow other parts of the, of the military to do. But the law is the same. Another, another quick example, and I'll mention this 'cause it is very local to Stanford, it's in this neighborhood when you don't want to use the federal acquisition regulation, you can use something called an other transaction authority, which is a, a government permission that has existed for 60 years that was given to NASA and DOD and some other agencies as well to use other transaction authorities, which means you gotta get outta jail free card. You don't have to use the far, but even though the other transaction authorities existed for the entire period of time, they only started to be used for non far based contracting in order to attract Silicon Valley companies by the Defense Innovation Unit experimental, which is like mere steps from the Stanford campus. Now, the reason why this happened was it had nothing to do with the law. It had everything to do with norms. It was because my friend Lauren came up with something called a commercial services opening, which did not require an authority from Congress and it did not require a change to the law. They came up with a set of norms and procedures for how to use other transaction authorities in order to get to what we at that time called non-traditional companies. So it's not enough to be given an authority by Congress, you have to have a concept of operations of how to employ it and repeat it and scale it. And so they started to have their own acquisition officers who they specially trained, who were led by a smaller team, and that team encouraged them to take more risk. So it's not the law or even the authorities. In fact, the Senate Armed Services Committee gave DOD so many new authorities for hiring, for acquisition, for procurement, for everything that the department can't even adopt all of the special permissions they were given in order to go faster in great power competition. Because again, the bottleneck isn't the law or the authorities. The bottleneck is training the workforce in how to use them, encouraging them to use and giving them permission to use them, giving them budget and resources to use them. It's not the law that's in the way as much as all of the things that are required to deliver results.

- You said there was one, that there were things that you would change that people had to be heroic when they did certain things. So, so that's a little bit at odds with description you just had. So what would you change, how should decisions be made in, in procurement in the area that you built?

- Sure. So I'll give you, I'll give you a great example of something that I would change and, and it, and I think we, we've seen that it's started to change and it's working better. So it's proof that this is the right way to go about it. So for the first five years that the Defense Innovation Unit experimental existed where they were using the other transaction authorities and they were getting support from Congress, giving them gradually more and more authorities and more flexibility. And they were building up their workforce of people that knew how to use these tools. And they developed these processes during that entire period of time. Their budget was like infinitesimally tiny rounding error in the defense budget. So they didn't actually have enough resources to deliver results, but they were being held accountable for delivering better than average performance. So we were holding them to a much higher standard and we were inspecting them to a much higher standard. And they had to spend so much time defending and explaining what they were doing because they were doing it differently. But the reason that they weren't delivering the results that people were asking for is because they didn't have enough resources. So one of the things that is really great is that recently they tend next to the size of their budget from about, you know, a hundred million to about a billion dollars. And what we saw is as soon as they had enough resources to go from a scarcity mindset to a mindset of possibilities, then all of a sudden the dynamics of how they interacted with the combatant commands changed. So what we saw was a very dramatic increase in the transition rate once they had a budget and it had nothing to do with the judgments they were making or the choices they were making, it changed the game theory of the end users. Because it used to be that if you were a combatant commander and you were responsible for what we called a fight tonight scenario, you did not really want to experiment with a prototype that you did not believe you could take to what we call production because you didn't believe that you would actually be able to use anything. So even if the Defense Innovation unit was finding an incredible startup that had an amazing technology and they were able to actually prove technology could work, they were failing at transitioning it. But it turns out the failure to transition had less to do with the quality of the technology or its usefulness for what I call product mission fit. It had to do with the fact that they were so small and so broke That no commanders wanted to work with them Once, once they had additional influence, political power, a little bit more resources, a little bit more budget, then immediately you saw a greater uptake of what they do. And now I would say the Defense Innovation unit is a lot more powerful, a lot more influential. And it, and it, it's the, the cause and effect arrows were in the wrong direction. People think, oh, they're more powerful, more influential when they have budget. Actually it's the reverse. Giving them a budget gave them status. So that's what I would do. I would say instead of having a system where we, first of all, we allocate the entire defense program a hundred percent, every dollar, every penny is accounted for. There is no margin,

- Right?

- There's no, there's no flexibility fund and everything is programmed out into the penny. Instead, I would divide that whole budget, which is currently divided into about 1200 program elements into what it was after World War ii, which is, let's say, divided into 50 program elements. And that would go from creating something that is so marginalized in terms of incremental decision and discretion to people that have to, everyone have to manage a portfolio. And by by doing that, you go from the scarcity mindset to more of an abundance mindset. And you are able to hold back a reserve to have discretion, and you are able to make more winners the way we made the defense innovation unit a winner.

- Great. Okay. So when we're talking about renewal of government in America, it's, their government is as many different things, obviously. And so we were just talking about the internal operations of how you buy goods in, in, in, well in the, in, in the defense department and Jennifer's focused on how to modernize government with using it and modern systems and the problems of hiring people and stuff. But government also obviously interacts with the citizens in a variety of ways that that affects how our society works. And one of the ways is that it gives permits for infrastructure. And I worked on a bunch of infrastructure permitting reforms to Congress. They pass them page limits on environmental reviews, time limits, they've made no difference. And the reason they've made no difference is because when you have a reg have a, a body of law and regulation, that's 150 million words. Even if it says you've gotta do it in two years, there'll be another law that's completely inconsistent that says you must do all these studies and stuff, which you can't do within two years. So you have this kind of, if you put AI into the, into the, into the body of federal law, it would short circuit or, or, or have a nervous breakdown or something because, because it would, because there'd be all these things that don't fit. 'cause it, they weren't built to match. It was just a, it's an, it's like quicksand. It's an equation to mix a metaphor. It's, it's an accretion of stuff. So, so Dan Wong lived six years in, in China where he was born. He spent, went back six years voluntarily, I think, right?

- Yes.

- If I, good. And again, it's written this wonderful book called, called called Greatneck and breakneck, which I would encourage you to buy 10 copies of. And so how were decisions made in China, how well do they work in the, you know, especially the public facing, you know, infrastructure decisions and such?

- Yeah, so I feel like I've spent six years living in a government culture that was a little bit too much can do. And frankly, I wish that the Chinese were a little bit more can't do relative to, to, to this country. But I, after spending six years as a technology analyst in China, living between first Hong Kong, then Beijing, and then Shanghai, I think the, it, it is really ripe for me to come over to California and, and make a few contrasts between what I saw in China as well as what I see in California. We've already brought up the example of California HighSpeed rail in the previous panel, and I think we cannot speak enough of California HighSpeed rail, given how much of a delay and disaster I think it looks. So my my, I wanna strike up a contrast between California high-speed rail on the one hand and China's first high-speed rail line between Beijing and Shanghai on, on the other. So 2008 was a very important year for high-speed rail in both countries. In, in 2008, the voters in California approved a referendum saying that California shall have high-speed rail between San Francisco and Los Angeles, and it was meant to be completed in the year 2020. And in 2008, China actually started building its first high-speed rail line between Beijing and Shanghai. And just by coincidence, the, the California high-speed rail and the Chinese high-speed rail system are both about the same length. I think it's about something like 800 miles. And here is where the, the, the similarities really at. So, you know what has happened in California? Well, you know, it is the year 2025, how many people have ridden California high-speed rail? The answer, of course is zero. The first stretch of California high-speed rail is supposed to finish between the years 2030 to 2033, connecting the cities of Bakersfield and Merced, which are not especially closed, San Francisco and Los Angeles. And right now, the cost estimate for i I believe the first stretch of, of, of that segment is meant to be $126 billion. So by contrast in China, they started building the, the, the, their first high speed speed rail line in 2008. Three years later they completed it between Beijing and Shanghai. This is a much denser area that, that they had to negotiate a lot of property rights through the stated cost by the, the by official media is that Chinese high-speed rail took about $40 billion to complete this line. And according to state media, within the first decade of operation, this line completed about 1.4 billion passenger trips. And so, you know, one contrast I see between, you know, the Chinese state media when it talks about its own high-speed rail, is that it focused on the outcome of how many people it had actually been able to move. Whenever I see a press release from California high-speed rail, it is about the number of high paying union jobs this line has created, which is, you know, a a procedural, it's a process outcome, right? They, they're, they're just bragging about the number of jobs it, it's created rather than the number of people it has really been able to, to, to move. And so, you know, one of these questions I I I sort of have, I mean, sitting here in California is where's the level of accountability that this line is just really dragging out? I would be pretty surprised if three decades after the referendum, any of us would be able to ride on this rail from San Francisco down to Los Angeles. Why is there so little accountability? How many heads have rolled here at this transit authority? Why has, you know, not a whole new team been put in and, you know, where is Governor Gavin at these ribbon cutting ceremonies? Whether that is something like, you know, a, a segment of the rail or, you know, other California building successes, perhaps that's the $1.7 million public toilet, perhaps that is the, you know, adding the bus, the bus lane to Venice Avenue, which took about 20 years from planning to completion to to to add, you know, a bus to, to one avenue. And so here's where I think the comparison between the US and China is that, you know, if you are a Chinese person living in the cities, let's say your demands would be something like more parks, cleaner air, more subway stations, if you are living in the Chinese countryside, they would be getting new highways, new sorts of bridges, perhaps a high speed rail network that, that connects the cities into the interior, the the coasts into the interior. And you know, if you're a Chinese resident and you are getting a lot of these sort of things, you previously didn't have a subway line. Now you do, you previously didn't have parks. Now you do, given that, you know, the past has looked pretty good, you also expect the future to be better. And so I think this sort of just raw physical dynamism is part of the Communist party's ability to build political resilience also for itself. And I think this is part of the reason that consent to the governed in China is still relatively strong because they feel that their lives are constantly getting better in front of them. Now, a, a provocation I wanna offer, you know, why has there been relatively little accountability here in California is that, you know, at a first approximation, perhaps California does not look like a, a big failure. The west coast of the United States is the only zone in the world that has created several companies worth over trillions of dollars. And so, you know, apple, Google, Nvidia are now, you know, three to $4 trillion worth companies. And so, you know, this is I think something that, you know, people, Americans can rightfully point to with, with pride to say that US has created this Europeans and Chinese have not. And I think that is a valid rebuttal. But I I also fear that, you know, these sort of very profitable companies has occluded and masked some of these broader weaknesses in the United States. I think a lot about how the manufacturing base has not distinguished itself very well in the last few years, last arguably few decades. If we take a look at a, a lot of American apex manufacturers, whether that is Intel or Boeing or Detroit or Tesla, all of them have run into some sort of, you know, a problem and they, they all seem to be quite disconnected. And so, you know, within the Apex manufacturers, it has not looked tremendously well in the early days of COVID, which Philip Zel co has studied so much. A lot of the early manufacturers did not make relatively simple products like masks and cotton swabs in part because of Chinese competition, but in part because they couldn't retool very effectively in the sort of defense industrial base areas that Josh spent so much time looking at. You know, they, the US has not been able to rebuild its munition stockpile very quickly. And this is after it's sent a lot to Ukraine and its self-defense against Russia, the US for the US every category of naval ships is on behind schedule by between 18 months to, to five years. And, and there's just a lot of these strange failures with the American industrial base. And I think the, this is where I'm, I also want to challenge a little bit this idea that America's doing so well because it has these trillion dollar companies. I think, you know, I I think a lot about this comparison between Apple, which is last I checked, has a market cap of about three, $3.5 trillion, along with a company called OMI in China, which is also a smartphone maker also makes a range of other products. Last I checked it's market value was about $200 billion, $200 billion. So that's about a 15 x difference between Apple and Sami. Apple about 10 years ago, said that it was going to investigate whether it was going to be able to build an electric vehicle after 10 years of debate, it threw up its hands, it said, no, we're not gonna try to build an ev Ami by contrast, five years ago declared that we are gonna make electric vehicles. The founder stated publicly on stage, I'm gonna do this, this is my be going to be my last great entrepreneurial venture. He committed $10 billion to building electric vehicles. Four years later, Sami's electric vehicles have rolled off the line. They're really selling a lot. They keep raising their production targets. It's first a vehicle one set a speed record in this German racing course called Norberg Ring, which is a notoriously difficult race and it beats some of these incumbents like BMW and Porsche, which typically tends to, to win these sort of races. And so, you know, 15 x difference in valuation between Apple and Sami. Which company would you prefer? Well, I think I would prefer Sami, which says it's going to enter a major industry and actually manage to do it. And in part because it had all of this engineering expertise in order to do everything well. Now I think the final point I'll land on is that, you know, I think there are problems to having an over competent state. I spent the entirety of zero COVID in China. The first act of zero COVID in China was a lot of political rage that another respiratory virus was circulating in China the second in 20 years after sars, in part because the political system covered up a, a lot of the news of the virus and detained some medical wi whistleblowers. The second act was that China managed to managed to control COVID really well, going in above and beyond WHO recommendations to have contact tracing in place, have centralized quarantine systems in place, really to block a lot of travel into China. And then the third act was a, a, a complete disaster in which they try to impose what I described in my book as the greatest lockdown ever attempted in the history of humanity. In which in the year 2022 in China's largest city, 25 million people in Shanghai were unable to leave their apartment compounds over the course of eight to 10 weeks. And so this is where, you know, they were really able to do something that the United States, I think has no capacity to do. And they had the, they had both the competence and the capacity to, to, to enforce these sort of lockdowns that was very, very strange. I also spent quite a lot of time in my book writing about my child policy, in which over 35 years, according to China's own official data, China conducted about 320 million abortions throughout mostly the countryside and then sterilized a hundred million women and 20 million men. And so, you know, this is just the sort of, you know, country that is able to do, you know, these sort of very strange things that are, that inflict disasters upon the population. My the final point I'll make is that what I would really love is for the US to become, let's say 20% more engineering focused so that it is able to, you know, fix a lot of its problems with homes, with mass transit, with building more clean technology, you know, having a little bit more, 20% more. Rob Moses, I think would be a good ratio. And what I would really love is for the United States for, for China to become 50% more lawyerly and to to be much more like the us to have some sort of procedures in place so that, you know, you're able to resist something like the one child policy. What I think would be great is if the Communist Party could actually respect individual freedoms to stop strangling the creative impulses of the people and fundamentally just leave people alone for a little bit. And that, that is my prescription for

- Right.

- American - Government and global peace. That's great. So there's, so the ability of the, of the party to make choices and huge investments, the 15 high speed rail lines now or whatever it is and such, and to the, the, the stories about, about forced abortions and such are truly, I could, I could barely finish those chapters. They were incredibly up upsetting how, how brutal, how, how brutal the party was. The party's willing to accept brutality and lots of mistakes. So lots of money they spent, you know, and all those huge housing projects, right? Nobody lives in them and stuff and housing companies going bankrupt and you know, whatever. So there are lots of mistakes that go along with the successes. And I think, you know, most people probably agree with you that there's a, there's maybe a happy median here, but in each of the things we've talked about here, which is defense, at least part of defense tech, you know, modernizing government and, and building infrastructure, all those things are problems in our society, but they're not the only problems. And so while we do have these incredibly successful companies, many, you know, located here, there's a, there's a sense that Americans feel that the future won't be brighter. Two thirds of Americans think that the government doesn't work and needs major overhaul, that there's a sense of gloom about the future as if these, these very successful companies in the valley and elsewhere are like the, the, the flowers in the last full bloom of a dying bush or something. And so if you look at schools, Rick Hick's work on schools showing a really sharp decline in, in, in student achievement, not just because of COVID, but but starting before COVID and continuing in in America. These, these declines something like 35% of eighth graders can't even perform at basic level, which means they won't be able to hold jobs. And so we're having this you not, instead of an inspiring society where the future is brighter, we have these legacy systems or congress that's inert. You know, there are lots of problems here, the education system that require a sense of renewal of how government works. And so before we open up the questions, I want to challenge all of you looking at it beyond your own immediate experience and stuff. What do you think America needs now? Do we need a narrative for a, a spring cleaning, a kind of a reboot, a reem empowerment? I mean, how if you were trying to get Americans engaged behind the idea of making government work, renewing government, making it work, what would that look like? Yeah,

- I I I, I have very strong views about this, so

- Would you like to talk about

- It? I would like to talk about it. So, so I, I think, and I spent, I spent, I spent my last five years in the department trying to build a bridge between Silicon Valley and the Department of Defense. And I've spent the last five years at Google working on the same bridge from the other shore. And there's a lot of things that Americans love about the spirit of entrepreneurship and the promise of technology. And it was a super interesting moment, I don't remember the exact date or statistic, but a few years ago where you poll young people about who they looked up to the most. And it used to be rock stars and athletes, and now it's entrepreneurs. So there is a, there's an excitement about technology and an excitement about entrepreneurship, but the big difference between my coworkers who swore an oath to hold the constitution are willing to risk their lives for their fellow countrymen, and more importantly, for the values and the beliefs and the ideals behind it. And the venture capital backed, you know, companies that, that, that, you know, have made this part of America so powerful to the point that that, that you were just making is virtue. And there was a young man, I think his name was Robert, who was sitting right there who asked Scott Cooper this question about it. And that young man inspired me more than anything else. What I see as, as, as someone sort of, it's still kind of in the middle of my career, but have a nonprofit organization that has for the last 20 years been encouraging young people to join public service and live great. And giving lives of purpose is a crisis of idealism. And you know, when I was in my twenties, I was surrounded by young people who all chose to come to Washington DC because they all believed that if you wanted to have a significant and important life, you moved to Washington DC to work on hard important problems. Whether they were wanting to join government or they were going to a nonprofit organization, or they were going to study, they all were incredibly inspired by the idea that America was a leader in the world that could make things better and that they wanted to have a life making things better. And the way that you did that was you infused your institutions with virtues. And whether it is the remaking of our business institutions or it's the remaking of our government institutions, the rallying cry should not be to make America great again. It should make America good again. When you think of the, the mythology that we tell ourselves about the stories of what it means to be an American, American exceptionalism was a version of America that defeated fascism, defeated polio, defeated hunger, defeated all of these things because we were good, not because we were powerful or because we were rich, but because we were good. And when we hear the stories that make us cringe about what your description of this hyper effective and hyper efficient other power in the world, what they are not attempting to do really is present themselves as being virtuous. They, they are presenting themselves and you're an expert no more as a question of sovereignty and independence. And when I think Americans are excited about America is when they see themselves as leaders. And that's what I would love to see us do a lot more of.

- Okay, so just because I, the first 40 pages of this book I just published, striving Can Do, talks about the, the values of post sixties liberalism that have undermined virtue in our society. The inability to quote, be judgmental, the subjective judgment is somehow not valid. That you have to be able to prove by objective facts what's right and wrong. That morality is just your point of view. And so if you look at any organization, a a, a Department of Defense Department, any good school, any good organization, it has values and standards that are enforced by the people in charge. And if the people are good and they uphold those values, there's an incredible web of mutual trust and it strives forward. Every good school has this, every single good school, and they do it in different ways, but it's, but they believe in themselves and they believe in their values. And the relativism of post sixties, which I write about in this book, the relativism of post sixties legal structures, and the whole idea of looking at disputes as a matter of your individual rights. Well, what about the rights of the person you don't like? I mean, who has a different point of view? I mean, freedom's not about getting what you want, it's about convincing other people that you're good at what you do and you're a good person or whatever. And, and so this, the modern idea of the old idea of rights was rights against coercion by the state. The modern idea of rights is rights against the people you work with. It, it, it's this crazy kind of inversion of, of, of legal power against your supervisor.

- It's, it's, I it's easy to agree with that, but there also has to be a place for compassion. Sure.

- If you, if if you have a firm where people are mean-spirited and they kind, and they're not nice, that firm's not gonna have mutual trust either. You know, morality is not a single, it's not a checklist. Right. It's a Emerson said character is cumulative, you know, it's in this. And so it's a, it's, yes. I mean, if, if you have a, if you have a mean-spirited firm, it's gonna be a lousy organization. I, you know, so, but, and I'm not saying do whatever you want and be mean. I'm just saying that there's a place for people to want to go to. And if you wanna work in government, start attracting government, give people real responsibility like you had in the Defense Department, who wants to go and be a paper pusher for life. That's not the, that's not the striving that America was built on. Right? You wanna give people real responsibility to run the classroom, to, to run the department, you know, and, and, and like Jen did, I mean, Jim goes in the White House and, and fixes this complete mess, right?

- Oh, I think you're missing the point. Both Josh and I went into government and felt like you were carving Mount Rushmore with a teaspoon, right? It's actually very hard to have authority in government. And this, I mean, to the extent that you and Mark and others are talking about sort of the vision of government that we developed in the sixties of it being overbearing and making too many decisions. I mean, and for good reason, right? I mean the, we don't want another Moses, but the sense is that you go into government, you have all this power, and the reality is you go into government and you feel have absolutely no power.

- No power. That's what Frank

- Was saying. And anything you do is because you like had to hack around the system. I mean, you had to be heroic, right? Yeah. To what Josh said. But I do think that that is about, I mean, I think we are in a moment of that, of change, not just because of Doge, not just because of budget cuts, not just because of ai, but because of all of these things put together where, you know, I mean, I like the notion of moral good, don't get me wrong, I'm definitely with you. But I think we had a theory of change in the past, say, 15 years that I've been working on this, which is, oh, we will be able to make change without pissing anybody off. Like, we'll be, we'll be able to reform this system, but everyone will still be happy and nobody will, nobody will be upset. What,

- What?

- And like, it, it just, it doesn't work that way. You know, the, the, the line, you know, you can't make an omelet if you don't break some eggs, right? Like we were trying to do that, we were trying to make an omelet without breaking any eggs for a variety of different reasons. Now those eggs are broken and they are more are going to be broken and what we need to do with that now is make the freaking omelet.

- Right? Right. But, but, but since applying that to schools, schools, a university is, is not good if it, 80% of the grades are a's Right. It's just, it's, it's a, it is not a, it, it's, it's, it's like a school. You don't learn by being happy. You learn by failure. All of us, if you, we learn by fear. We, we make mistakes, we pick ourselves up. A lot of learning on that. You know, instead of Thomas Edison, you know, all the people talking about, there ain't no rules around here. We got, you know, trying to get something done. So there's a, there's a sense of people collaborating and being together in a mission. Very good. Right. That, that was, that our pluralistic society, we didn't have a society where everybody got along. We had a society where people left each other to be with people like themselves. Mormons go to Utah, the Hasidic Jews go to Brooklyn, the techies come to Palo Alto, the, you know, he said there are all these communities that work really great together and they form strong bonds. And Robert Putnam's written, written about that. But I agree with Josh that we have to create a mechanism, but it includes a mechanism for action as well as a mechanism for moral, you know,

- Aspiration ab, absolutely. But one of the things that worries me about AI and social media and these things is the ability to not only segment ourselves by moving to Utah for people that share our religious beliefs, but being able to create atomized echo chambers of only surrounding ourselves with people who agree with us and bifurcating our sources of news and information and the like. That, that world of segmentation terrifies me. Like I believe that we have never more never than this at this moment, needed more people to say, I want to collaborate with people I don't agree with in order to make us competent as a society Right. To level, level ourselves up. Right. And I do, I do worry a little bit about striking the balance in the correct way as we imagine what a future society would look like, because I, I do think it's incredibly important to protect the rights of minorities. And, and it seems to have gotten away from us a little bit. But we're also living through a period of, of intense backlash now against some of the, some of, some of the sort of excesses of overfocus on individual rights. And there there's gotta be a way to strike a balance. And again, the purpose of this is about government competence. I think ultimately the reason that we have this lost faith in government gets back to something that Jen had said, which is that people are having consumer experiences that's so vastly outperform their government experiences and it's creating a massive erosion of trust. And I think you, you, you point that in your exposition here is, you know, and you talked about it in contrast to your experience with people in China, what they want from their government is the ability to get things done and make their life better. And when they feel like they are losing trust in institutions and there are more divided from their neighbors and the government is telling them how much denigrating their government denigrating public service and public servants, it contributes to a general sense that we, we, we've fallen off of our ability to do the right thing. And this sense of we, we can't afford to invest in our communities, we can't afford to invest in our government, we can't afford to invest in these things. And I actually feel the opposite is true. Like we, we are absolutely remarkable, exceptional and deeply good people capable of doing remarkable extraordinary accomplishments and our government should be leading us to those accomplishments.

- Right. Okay. That's a great way to go to questions from the audience just right here.

- Thank you. As I've been listening to the arcs over the last three sessions, one thing that just keeps jumping up into the front of my mind is do we have the right upper educational model to facilitate the change that we're looking for? So we have a model where the investment is actually not achievable for most anymore. A lot of people cannot justify even getting a bachelor's degree. And those that can, most of them view it as a lifetime investment. But I think we are actually well past the point where people realize that one set of training right after high school is not going to carry you to through the skills that you need until you're age 65 to stay in what, whatever, whether it's private sector or public sector. I tell my kids, you're probably going to have to retain, retrain twice. I think we missed the, we the education missed the generation that had to retrain. I think those people are stuck. Many of them are stuck in government right now. We don't have a, an educational system that's priced or even structured to facilitate the retraining that the technology is, is going to bring us, like it or not. And I envision something like micro certification. So if what you need to do a better job is just cobol, that's not four years, that's maybe, I don't know, nine months depending on how you structure it. So here we are at Stanford, one of the most premier educational institutions, the world which benefits from exactly what's driving some of the problems in government. They like stability, they like reliability. The four year degree, the master's program, the PhD plus continuing education and executive education programs. Those are the offerings. What opportunities exist within upper educational institutions and the government saying, we wanna work with you to retain institutional knowledge and then also allow our employees to pick up skills along the way so we don't end up having to fire them all through a doge effort.

- Right. - I I haven't heard any talk about this today and I'm wondering whether it's in the back of your minds as well

- To be, there's some really smart people who've who who've talked today, Mackey and, and, and Rick Hashik and others talking about the absolutely precondition of focusing on early education and making those, those cre reintroducing a sense of values and energy and culture so that people have the, have the, the DNA to retrain, you know, they will have to retrain. So you need to have people who, who go to school and learn techniques about how to learn. Right. And then schools instead, we have sort of not very good schools. I was on a, a not-for-profit public survey company that studied why community colleges were so lousy and they were just going through the motions. They didn't really talk to the, the students about what their real interests were. They weren't practical. And so there were, the students would incur all this debt and take these arbitrary courses often from no, from for-profit colleges that just wanted to make money off of them. And then they ended up being stuck with saddle with these loans and, and have no prospects. So, so we've gotten sloppy in our education system. There are many ways to be a good citizen and there are many trades as well as things that don't require college education that require real skill and requires the ability to retrain. But we need to have a, the DNA in our education system to, like in Europe, like Austria and Switzerland, they have apprenticeship programs, job training programs don't work in the abstract in general. They work when they're connected to particular employers. And so apprenticeship programs are really important. 'cause then the person knows if they learn how to do this, they'll get hired at the end of the job. It's not just going to a class and looking at a blackboard or whatever. So, so this that kind, it's a renewal. Renewal requires us to reinvigorate pride and values in the things that you're talking about. And all the problems you mention are real, how does China do it?

- They make a lot of kids study engineering whether or not they want to, there is just a lot more forcible STEM training. I think that is, that is very real. My, my parents were of a generation in which they had no choice to study what they, whatever they did. My mom studied to train as a thermal engineer. Not because she wanted to, but because the state said your test scores are this high, therefore you're gonna go go be a coal miner. And that was a, that was a very strange thing that they were doing. And to, to some extent right now there is still quite a lot of coercion to say go study these, these different aspects because these different streams because that is the best thing to do.

- And how rigorous are the schools?

- I think the, the, the, my sense I get from reading the research is that the average universities are probably not all that distinguished, but among the highest caliber universities, they seem to train students very, very well. And based on what we see from a lot of these extremely well compensated AI engineers, some of whom have been POed to Silicon Valley, many of them have come out of China's top university programs. And so within the elites it seems to be quite good.

- Right. Any other questions?

- Hi, my name's Harry Kaplan. I'm a senior here at Stanford. And my question was to Josh's remarks on like the atomization of like echo chambers and public spaces. And as a student here, you know, my classmates have very, very rarely like faced adversity. Like we have all straight A's there is prolific cheating across campus and a lot of the academic departments. And there's a lot of lack of respect for, I think, authority figures for professors. You know, how do we get back to this place where we break down the, the, the atomization and get, get to kind of a less of the morally relativistic view post sixties and more to like universal, you know, virtue goodness. Like as a student myself, I don't see that path. You know, I, I was wondering if you guys see that path.

- I have a question for you before you give the microphone up. Who are, are your role models or when you think of their, your, I don't wanna put you on the spot, you think of your peers, right? Like from whom do you think they're getting that inculcation of what is a, what is an appropriate way to live your life as a, as a woman or a man in the world? Like where, like where, where are they getting that from?

- Well, for myself, I go to my rabbi, but for my classmates, I think they get it from each other is the sense of competition. And rather than being a competition to build up to something great, it's a competition of, you know, who can undercut, who can, you know, navigate the path sadly in whichever way. And it oftentimes leads to the opposite of, of what we should be striving for.

- You know, my response is a free society is a marketplace and it should be a marketplace of character as well as everything else. And I was really upset by the whole Claudine gay thing at Harvard. And so I wrote an essay, been six weeks writing an essay about why I was so upset knowing that I would never publish it. 'cause I'm not the kind of guy who could publish something like that. You know, I've had every privilege in my life and everything. So I'm, but, but what I landed on was that the, the what I view as the loss of rigor, you know, in, in, in higher ed, particularly the best schools like Sanford in part stems from a disempowerment of the professors to judge people based on their expert judgment. I mean, who are they to judge that your writing is no good or, or whatever you can, you can grade a science test because the answers are right or wrong. But for the humanities and the social sciences and even a lot of other courses that are quasi scientific, what's good or not requires value judgements. And professors, the professors I know don't feel empowered to do that. They feel they'll be attacked or they, you know, they're, they're not being fair or pre and they'll be called on the carpet for doing it. I like the Cooper's idea of actually having a, you know, like a curve, you know, for, for federal employees have a, you know, so that only a certain percentage can be truly excellent, you know, and, and, and maybe that's one way to restore it, but you also have to restore, I think the authority of the people who lives are dedicated to a particular discipline to make their judgements about what's good or not. 'cause if you don't, then all of a sudden it just sinks to the bottom.

- There's a lot of discussion on this panel, on good character and virtue, and I'm, I'm reacting a little bit, I'm thinking about that and I think, you know, changing the moral character of a nation sounds kind of difficult. And I, I have, I have a little bit more modest of a goal. I mean, I'm thinking about, you know, where in the examples that we have about can-do cultures, one is Silicon Valley, the other is the other is China. These two places don't scream excellent moral virtue at all points. To me, and I think, you know, maybe just a more modest goal is I I have a little bit more of a hope in technocracy and in, in making things better if we loosen up some of these zoning laws to have a few more homes being able to be built in these very expensive places that perhaps also triggers a little bit more commerce around these areas. People like having more neighbors and you know, maybe we can have just a simply a simple virtuous loop of, you know, losing some of these things, improving people's lives around them. You know, there are places in America that do build quite a lot. These include places like Austin, Texas, parts of Utah where people just seem much more optimistic than

- Right.

- You know, San Francisco or, or, or the Bay Area in some ways, right? So maybe, maybe we don't need to change the moral character. Maybe we can just do a few simple technocratic reforms, get us a little bit better to renewal.

- Well, let me just push back on that. So California a one bedroom affordable housing unit, subsidized housing in California costs roughly $750,000 a same size unit market priced unit. So making profit in Texas and in Dallas will cost one third that it's $250,000. So, so there is a kind of a, there is a kind of a spring. So what I would submit is that I don't think the morality and the effectiveness are, are at all in inconsistent. I think you want to be in a, in a society, in a place where you can wake up in the morning, make a difference, and you're not constantly being held back by what seemed to be kind of random vestigial bureaucracy and rules that nobody's looked at. I mean, I was talking to someone the other day, our legal, our regulatory system is really a form of central planning. It's, you know, you have to do this, you have to do that, except that the planners are dead. So America's run by dead central planners. So people wrote rules, you know, 50 years ago or something. So I, my sense is that we might stimulate a really interesting public debate about all these issues if we created a kind of spring cleaning narrative where you say go area by area. I'm talking about creating one page templates that people can then argue over about how to simplify healthcare or you know, whatever.

- I'll just say I like the idea of spring cleaning and to try to tie in a little bit this sort of pessimism around Stanford and the, and the culture. Like we are at a place, okay, we are at a moment in time when suddenly tools are available that we're not available before. Right? Whereas this, the kind of spring cleaning that you're talking about, that I'm not a techno optimist, I really never have been, but I find myself going, wait a minute, we couldn't do it before. If you needed to take the how, how many pages of regulation should cover unemployment insurance, right? It's a program that's supposed to give you a certain amount of money for a certain number of weeks under certain circumstances when you lose your job. But it's 7,119 pages right now. If you wanted to take that down to whatever number of pages you think it is, good luck until today because we have LLMs that can ingest all of that and help us sort it through in a ways that just had gotten literally like out of the ability of human control. And so we're at this particular moment, and so in time and we're in a particular place where, like the re lab here at Stanford is, is at the cutting edge of doing that work. And yeah, I don't think that's seen broadly as an incredible opportunity that could have huge, you know, impact on the society that we live in and the sense frustration with these sclerotic institutions. But I think it is, and and I I just wish we were more, yes, there's a lot going on in terms of a, you know, the negative impacts of AI and social media and, you know, very chaotic world. But, and I, I'm not, I'm, I can be equally sort of pulled down by all of those things, but we do suddenly have the clarity about the problem and the tools to actually solve it. And I will say much more bipartisan or multi partisan or whatever, or non-partisan support for the need to solve it than we've ever had before.

- Right? And, and we have the disruption. And one of the things people haven't talked about with AI is one of the reasons we have all these rules in red tape is nobody trusts anybody to make a decision. One thing AI could be really useful at is a kind of a, a check and balance. You know, it can be a kind of accountability tool. We're gonna try this. Oh, the AI says that, you know, it's just not making the decisions. But actually, you know, like for example, for pre-approvals for medical care, you can have many, much more, much less red tape in getting healthcare services by letting AI identify outliers.

- I I would agree with you on that. I think one thing we have to be very cautious of in government, I remember the first time, this was a couple years ago, and it was like, okay, now AI can make decisions about who to hire and there was a lot of interest in this. And I was like, that is just another expression of a core dysfunction, which was nobody wants to make a decision. And if you're like, okay, now I'm gonna let AI make the decision, well first of all, all the people who were, the reason people didn't wanna make the hiring decision in the first place is because they were gonna get criticized or sued or something for making a decision that somebody didn't agree with. Right. Well, if you say, well, AI made it the same, people are gonna make the same criticisms of the ai ai, it just displaces a I

- Problem. Didn't say make the decision.

- No, I know, I know you

- Said check a decision. No,

- No, I, I agree. I think they can be very useful in that regard. What I wanna say is like we should not let that, that we already have a core dysfunction in government about an unwillingness to make and stand by decisions that may be quote unquote unpopular by which we mean one person doesn't like them. We need to fix that and not try to have not, we cannot, no amount of technology will solve that, that problem.

- I agree, Josh, that so interesting is the studies show is that there's one thing that is able to make better judgements or better decisions or higher performance than either systems that are run by humans or systems artificial intelligence. And that is the artful collaboration between humans and machines. And that those hybrid systems Are at least at this point in time, outperforming systems that have one or the other. And the big irony in this is that like, one of the main ideas about why you would spend so much money, to your point ma'am, to send your kids to Stanford, was that Stanford was the ideal place to teach your children how to become software engineers. So they get these million dollar a year jobs. It turns out like that was misleading because the first people to be replaced by AI are gonna be software engineers. And it turns out that the best use of an institution like Stanford for America and for the world is to teach humanistic values in a liberal arts education to imbue humans with the judgment and the morality to know when to use AI systems and how best to use those systems and how to design those systems. And so this very dystopian depiction of Stanford by this gentleman of a, of a, a school with, you know, great inflation, rampant cheating kids trying to stab each other in the back, it's typical you to try to get a better job, is deeply concerning to me for the reasons, is that I genuinely believe Stanford is the place where a lot of these technologies will continue to be created and where a lot of these companies will continue to recruit because this is such a remarkable institution with such a venerated history. And so I really think that it's, whether we think it's the responsibility of parents or teachers, it's certainly not peers. Someone has to be doing the things that Condoleezza Rice and Phillips KO have been saying on stage today to say that it's not just the responsibility of the Hoover institution, but it's the responsibility of all of Stanford and all of higher education to develop a pipeline of deeply moral beings who understand the most important thing about citizenship, which is that it's about sacrifice. And you think about all of the greatest American presidents and what they said to Americans, they all said, whether it was Ben Franklin or it was Theore Roosevelt, or it was John F. Kennedy, they all talk to young people about the price of citizenship in a great country is sacrifices,

- Right?

- And I, and I, one of the things I see the least of in the young people that I coach and mentor is any sense at all of the willingness to make sacrifice. What they really want is what their parents taught them to expect, which is comfort, intellectual comfort, physical comfort and emotional comfort that will be the undoing of America. So the most important thing we need to ask all these students is what are you willing to sacrifice in order to have a great life?

- Okay, I just wanna say thank you, thank you to the panel. That's a perfectly good way to end. I I just wanna note, having a functioning government is important to that. Yes. Right? Yes. Fine. You should bring it back.

- And I want to thank the audience. Some of you have been patient and enjoying all three of our panels today. I do think it's, it's worth on in closing to notice Jen Polkas comment that this is not gonna be easy and there's gonna be a fight. You can decide what the issue is on which you pick the fight. Let's suppose that tomorrow someone said, you know what, we're gonna start with this one thing. We're gonna eliminate a private right of legal action under the National Environmental Protection Act. You know, just that one thing. Or we're gonna limit it in the following way that Diego has, has, has told us could work. And you, maybe you have a bill that has two or three of these things that are high leverage illustrations of where you begin that then become a battleground for an agenda. And boy, that's gonna be a fight. But this a, you can see that there's an enormous political agenda here in a way about ideas, advancing freedom, actually freedom to govern, capably, whatever government it is you want. And we need an agenda to that. A lot of people coalesce around to try to press for that freedom. And I think there are progressives and conservatives who will join that fight and change the way we think of this in party terms. And so these panels today, the panel last night, I think have helped at least inform mebo about the different approaches and ideas that people are bringing to this agenda. And so thank you very much for joining and listening and sharing the education here. Good day for Stanford. Thank you.