>> -- Collins the Joan and
Sanford Weill Dean here

at the Gerald R. Ford
School of Public Policy

and we're delighted
to have so many of you

with us here this afternoon.

I'm particularly pleased to
host the city group lecture this

afternoon on behalf
of the Ford School

and the International Policy
Center and we're very pleased

to have the director Jan
Svejnar with us as well.

It's a special honor to have Dr.
Jessica Tuchman Mathews with us

to deliver our Citigroup
Lecture for 2010.

The Citigroup Foundation
Lecture was made possible

by a gift from-- in honor
of President Gerald R. Ford

from the Citigroup Foundation
and we're very grateful

for this generous gift which
has enabled us to bring a number

of distinguished thought
leaders and policy makers

to the Ford School and
to our broader community.

Dr. Mathews is the President
of the Carnegie Endowment

for International Peace which is
a major nonprofit organization

that is dedicated to advancing
cooperation between nations

and promoting active
international engagement via the

United States.

Dr. Mathews has held
positions in the executive

and legislative branches
in management and research

in the nonprofit arena
and in journalism.

She is one of the nation's most
important and influential voices

on international affairs
and foreign policy.

She was a senior fellow at the
Council on Foreign Relations

from 1993 to 1997 and
served as Director

of the Council's
Washington Program.

From 1982 to '93 Dr. Mathews
was founding Vice President

and Director of Research of
the World Resources Institute,

an internationally know
center for policy research

on environmental and natural
resource management issues.

She's also served on
the Editorial Board

for the Washington Post covering
energy, environment, science,

technology, health and
arms control issues

and later became a weekly
columnist for the paper.

She earned a bachelors degree
from Radcliffe and a PhD

in Molecular Biology
from the Institute

for Technology-- of Technology.

As I said earlier we have

in large part the
Citigroup Foundation to thank

for being able to invite
Dr. Mathews to join us today

but I suspect that there's
somebody else who had a hand

in our bringing her here

and that someone is a second
year MPP student our very own

and Dr. Mathews'
son Oliver Mathews.

And so we're very grateful
to him for his role in that.

He's working on a joint degree

with the Business School
I know he's very busy

and so we're very pleased
that he has taken the time

out to be involved in helping
to chair our Charity Auction

and I know he's working with
many other community members

on that activity as well,
so thank you Oliver.

So on behalf of the
International Policy Center

and the Ford School I
could not be more pleased

to welcome Dr. Mathews.

[ Applause ]

>> Well thank you and good
afternoon and thank you Susan.

It's-- as someone who has
spent their whole working life

on working on public policy it's
a great pleasure to be with you

at one of the nations leading
schools of public policy

and an honor as well
and I thank you for it.

What I'd like to do today is
to put before you a proposition

to explore with you, you will
see it's a somewhat depressing

one but the outcome
is not determined

and in the years ahead I hope
that people in this room,

students here at Ford can
play an important role

in reversing the trend
that I believe that I see.

Simply put, I think our country
is losing the ability central

to the health and
wellbeing of any state

to address its big problems,

to respond to the major
challenges that face it.

I exempt from this,
threats from abroad

and we retain an
enormously strong sense

of patriotic nationhood
and a readiness to act

against any such threat.

But as you will hear
in a minute,

an actual attack brings the
country back together again,

if only briefly, but nonmilitary
threats and challenges

of foreign policy
are not exempt,

not least because they depend
to an increasing degree

on our policies at home.

The single central factor
holding back the global response

to the many threats
of climate change

for example is the absence of
a US Domestic Energy Policy.

There are many examples in
history of empires and countries

that for one cause or
another have lost the capacity

to respond to the problems
that they face and their--

and that then fall into decline.

And it's not at all impossible
that this should happen

to us now, but the question
of course is, is it happening

and what is my evidence
that it is?

My criterion for being unable

to address a problem is a
generous one, to qualify it has

to be a big issue with
major implications

for national well being
and its features have

to be essentially
unchanged and unaddressed

for at least a quarter
of a century.

All but one of the examples

that I will cite today
have languished actually

for far longer than that.

Before I describe those
let me set the stage.

I'm agnostic to skeptical
about the value

of most public opinion polling--

issue polling, because
so much depends

on the way the issues
are phrased.

And as anyone who's ever had to
respond to one knows usually,

answering is often a matter of
picking the least distasteful

of three or four options,
all of which sound wrong.

But there is one enormously
important I think poll that's

conducted by the American
National Elections Studies Group

here at Michigan and
also at Stanford.

This group has been asking
Americans the same question just

about every 2 years since 1958.

And the question is "Do
you trust the government

in Washington to do what is
right all or most of the time?"

The results speak volumes

about where we are although they
certainly haven't been heard.

From 1958 to the mid 1960s,

75 percent answered
yes to that question.

A slide began in 1966 and it
continued steeply downward

for the next fifteen years, so
that by 1980 only 25 percent

of Americans said
yes to that question.

In the interim, of course, with
the Vietnam War, the Watergate,

the impeachment of the
President, the Arab oil embargo

so there were plenty of
good reasons for people

to feel estranged or
even antagonistic.

But think what it means for a
democracy that three-quarters

of its people do not
trust the government

to do the right thing
most of the time.

What happened next though is
I think what really matters,

and that is that the
trust did not recover.

For the last three decades
the approval level has bounced

around in the region
between 20 and 35 percent.

It climbed briefly to 40 percent
during later Reagan years

and again for the last 2 years
of President Clinton's term.

The one outliner, the
one exception was 2002

which I think proves
my earlier point.

Because following the
9/11 attacks 55 percent

of responders said they
trusted the government.

The attacks briefly brought
Americans back together and back

into a feeling of
connection with Washington.

But then the number immediately
began to fall and plummeted

for the remainder of
President Bush's term back

to 30 percent in 2008.

During the earlier downward
slide the trust percentage fell

below half in about 1972.

What this means is that
for anyone under the age

of forty they've lived
their entire life

in a country the majority

of whose citizens do not trust
their own national government

to do what they think is right.

Through four long decades none

of the massive changes they
have voted for in leadership

and ideology have changed that.

It's astonishing really
when you think about it.

It has to seem as though
this were the natural order

of things, the inevitable
order of things, but it is not.

I alas had not under forty

and I have known a
very different America.

In four years during
the presidency

that we almost never remember
that of Lyndon Johnson,

Congress passed more than 200
major pieces of legislation.

Legislation on a par within
and many cases far bigger

than the two big laws Healthcare
Reform and Financial Reform

that our present Congress almost
tore itself to pieces over

and which took the better part
of eighteen months to pass.

The list begins with the
three revolutionary laws

that transformed this country
the Civil Rights Act of 1964,

the Voting Rights
Act of the same year

and the Fair Housing
Act of 1968.

When the Voting Rights Act
passed there were three hundred

black elected officials
in this country.

>> By 2001 the latest
numbers I can find there were

ten thousand.

Democrats at the time
were very well aware

and that discussed actively
that by championing and voting

for this package of laws they
were saying goodbye to a South

that had been solidly in the
Democratic camp for decades,

yet they did it anyway.

And immediately in
the mid term elections

of 1966 the effects began to be
felt with the loss of 47 seats

in the house and 3 in the senate

and you know the
longer term effect.

This was political courage by
a President and by a Congress

of a sort that if you were
under forty you have never seen.

Opposition to ending
segregation was fierce.

It took the assassination
of Martin Luther King

to finally drive though the Fair
Housing Act three years later

but support was also by part

as Republican leader
Everett Dirksen

and his many moderate Republican
colleagues played a central role

in all three laws.

But this was only the beginning.

Medicare was created in those
four years and Medicaid,

food stamps, Head Start, two
new cabinet agencies, Housing

and Urban Development

and transportation also the
National Transportation Safety

Board, 35 new national parks,
the first federal assistance

to higher education,
student scholarships, grants,

loans work study programs
and the first to elementary

and secondary education, VISTA
volunteers, legal services,

Job Corps, The National
Endowments for the Arts

and for Humanities,
the Corporation

for Public Broadcasting
and the powerful Freedom

of Information Act.

I'm just skimming the top here.

There was much, much more
from urban mass transit

to international
monetary reform.

For those who want to know more

about this extraordinary
period I refer you

to a wonderful speech given in
2008 by Joe Califano an aide

to LBJ and the former
Secretary of Health Education

and Welfare entitled
"Seeing is Believing".

I don't mean to suggest
that Washington was always

like this, obviously it wasn't.

We've never seen as good a
legislature president as LBJ

or as pure a politician in
the sense of knowing how

to pull the leverage of power
in order to get a desired result

and we likely never will.

Johnson also had the
legacy of JFK to build on

and his own massive victory
over Goldwater as a mandate

but my point is that
Washington's ability to act

in 1964 and its ability to act

to today are two completely
separate universes.

So let me turn to the cases

that I think illustrate
my proposition.

What are these problems we've
been able-- unable to address?

The first for me is energy
policy, for more than 35 years

since the shock of the Arab
oil embargo we have been trying

and failing to formulate one.

We've talked endlessly about
energy independence a goal

that is neither feasible
nor desirable.

What we have done
is very little.

Automobile mileage
standards have been the single

major achievement.

Congress has wasted untold man
years fighting over symbols

like the pitons of oil

in the Arctic National
Wildlife Refuge, ANWR.

Through 3 major oil crisis
the plot line has been nearly

identical when oil prices
are low we ignore surging

consumption just when it
makes most economic sense

to raise the prices
to bring it down.

When a crisis hits we try

to boost short term
domestic production

through tax incentives
at exactly the moment

when incentives are redundant
in the face of the price spike

that caused the crisis.

Next we search for that
year's silver bullet,

the new technology that will
somehow solve all our problems.

We've been through oil
shale, through hydrogen,

fuel cells, ethanol et cetera.

Government subsidies
spark investments,

sometimes very large
investments in these,

but the enterprises fail
when oil prices fall back

and Congress repeals
the subsidies.

As the price spike ebbs
the efficiency mandates

that have worked to bring down
demand are weakened or abandoned

and consumption starts
to rise again.

Soon the cycle repeats
itself and we again pay

to foreign suppliers through
higher prices what we might have

paid to ourselves in a targeted
tax spent for domestic benefit.

Why is this?

There are three reasons,
first, a deep unwillingness

to confront the necessity
of raising energy prices.

The strangle hold
of special interests

in this case energy
interest over Washington

and a strange national blind
spot about energy demand.

States notably California
of course but others

as well have been able to act

but you cannot make a
national policy state by state.

We've been willing to do almost
anything but face the prospect

of sustained high energy prices.

In 1973 there was talk
of invading Saudi Arabia.

Rapid deployment forces for use
in the Middle East were funded.

We've been willing
to endure inflation

and other unnecessary economic
pain but we've never had,

excuse me, we've never
seen the political courage

to explain the truth
to the American people.

The mere word tax is enough to
frighten away the politicians

of our era even though the
revenues could be refunded

completely in any
number of ways.

It has been 17 years since we
last raised the gas tax during

which time the cost of building
and maintaining our highways

and transit has risen
by 40 percent.

In Europe today the
gas tax is between 4

and 5 dollars per
gallon, the tax.

Our is on average combined
state and federal, 45 cents.

The results of this
is that we are one

of the only developed
nations in the world

in which transportation
does not pay for itself.

The Highway Trust Fund is broke.

We have somewhere 60
and 85 billion dollars

of needed maintenance
that is not getting done,

a deferred tax on our children.

And this critical
element, transportation

of our national infrastructure,

is not fit to support a renewed
period of economic growth.

By the third factor
energy demand,

I mean of course improved
energy efficiency.

We have a massive resource of
waste built into our system.

Every expert including
these days the leaders

of the major oil
companies will tell you

that by far our largest energy
resource and our cheapest

and our most quickly
accessible is what can be mined

from wasteful use.

Yet our National Policy
Discussion continues almost

entirely focused on the hunt
for new sources of supply.

It's been one of my
greatest disappointments

about President Obama's period
in office that he has focused

so much on renewables which are

about in the short term one
twentieth the dimensions

of the efficiency resource.

Healthcare is of course
the second example.

It took 45 years to take the
first major step beyond Medicare

and Medicaid towards
universal healthcare coverage.

But the new law does not
come near to doing what has

to be done to contain costs,

namely to address the way
healthcare is delivered

and paid for.

Healthcare cost in the US are
today in the neighborhood of two

and a half trillion
dollars per year more

than 17 percent of GDP.

At their current rate of
growth healthcare alone would

constitute one fifth of our
entire economy soon after 2020.

I think it's obvious that this
is not a sustainable situation

in a healthy economy.

Most important we
spend per person more

than double what most
European countries spend

with poor outcomes as measured
by public health measures,

life expectancy,
infant mortality,

and so on, twice as much.

We know that paying people
on a piece work basis

which is what fee for service is
encourages more use of services.

We know that medicine an
interaction between sick

and frightened and ignorant not
stupid but ignorant patients

on the one hand and highly
educated providers is not

and cannot be a normal
competitive market place.

We can see and measure the
differences between what we do

and what happens in Europe and
Canada and we could even see it

within the United States
through the work of Wenburg

and his colleagues at Dartmouth.

Through 40 years
of data collection

and analysis they have
shown that there can be

and frequently are 2 to 3 fold
difference in the consumption

of medical services in
different places even sometimes

in neighboring towns which
are correlated to the supply

of hospital beds and physicians,
not to the characteristics

of the population and not to
differences in health outcomes.

>> Their work suggests immense
savings on the order of 30

to 40 percent of what
we currently spend

if all healthcare were delivered
on the same lines as it is

in the low expenditure areas.

We know all this and yet how
long do you believe it will be

before we are able to address
it at the national level?

My third example is the
wildly diverging shares

of household income that have
marked the past 30 odd years.

During this time 80 percent

of American households have
lost ground economically,

although this was the period
in which a huge proportion went

from one income to
two-income households

as women entered the workforce.

The vast majority of gains among
the lucky 20 percent actually

went to the top 1 percent, so
average income is 1.9 million.

And the same is true
for the top 0.1 percent

who took home nearly all
of that 1 percent share.

The same pattern holds only
slightly less dramatically

for a real after tax income.

Another indicator is the
ratio of CEO pay to the pay

of average worker,
which went 40 in 1960

to more than 400 in 2005.

How, you wonder,
could this be true

or at least I wonder about it.

How in a country built
on being the land

of opportunity could 80
percent stagnate for more

than 30 years while immense
wealth accumulates among the top

1 percent?

How could this happen when
the cost of high inequality

to both economic growth
and political cohesion

and stability is
so well documented?

Why hasn't been there
been a reaction?

The answer is that cheap
credit, the housing bubble

and the home equity loan
disguised what was happening.

Now they are gone and that
is the principle reason

for the pain and anger that
has erupted, sometimes frantic

and unreasoning anger.

Remember the sign "Keep the
government's hands off my

Medicare" that we
see in the tea party.

It seemed like the American
dream was still in force

and then seemingly all
of a sudden it wasn't.

But this huge economic shift
has actually been a long

time coming.

My last example is the failure
to get over the Cold War.

It doesn't exactly fit
my criterion I admit

because it's only been
20 years rather than 25.

But here we are today facing the
failure of the New START Treaty

in the senate, I think
more likely than not.

On its merit the
treaty is unimpeachable.

It has been endorsed by
virtually every Secretary

of States, Secretary of Defense
and National Security Adviser

of both parties for the past
three decades and unequivocally

and unanimously by the
current military leadership.

I'm talking about endorsements
from Secretary George Shultz,

Kissinger, Powell,
Slazenger, Scowcroft,

Steven Hadley all
Republicans, all endorsed it.

The questions that
have been raised

through 18 senate hearings
have been answered,

there's no constraint on
future missile defenses,

the nuclear triad is
preserved, inspection

and verification is robust and
yet, the administration has

to keep promising
more and more money

to modernize our nuclear
weapon systems, an amount now

up to 80 billion dollars
and still Senator Kyl

and the obedient
Republican votes waiting

on his decision is
not satisfied.

He wants more.

The truth that doesn't
surface in these discussions is

that we don't have a use for our
nuclear forces these days beyond

deterrence of nuclear
attack and for that,

we already have far more
than enough capability.

If the New START Treaty is not
ratified the consequences will

be far reaching.

There will be no boots
on the ground inspection

of Russian nuclear forces,
there will no next round

of arms control to
address the thousands

of tactical nuclear
weapons in Europe,

the US-Russian relationship
will be damaged,

perhaps significantly in terms
of cooperation on Afghanistan

and Iran but not fatally
but the impacts on efforts

to control nuclear proliferation
globally will be huge.

The greatest threat
we face today

and everyone knows this is
not from Russia or from China

but that a broken
state or a group

of terrorist will get heir
hands on nuclear materials.

To stop that access
to technologies

that provide weapons
usable fuel must be limited.

The regime is gonna
have to be tightened.

Yet the non-nuclear
weapon states believe

that the nuclear states have
failed to live up to their end

of Nonproliferation
Treaty the NPT bargain,

which was nuclear disarmament
by the nuclear weapon states.

Without progress in that
direction there is no absolutely

no realistic hope except
perhaps the after math

of a nuclear catastrophe of
their agreeing to give up more.

Rejection of this modest treaty

by the United States
would be heard loud

and clear around the world.

Yet there are today and I
don't mean to be partisan,

but accurate, senate
Republicans behaving

as though Russia were
still the Soviet Union

and that US nuclear
forces have to be prepared

for an imminent nuclear
World War III.

I could name several
more examples, I won't.

Climate change of course
would be near the top

of my list but there are others.

It would be both exhausting
for you and too depressing

for all of us, I think.

But I think the case is made.

The question is why can't
Washington tackle the big issues

any longer?

And if we understand
what has gone wrong,

what can be done to fix it?

There are many reasons for
our strangled government.

One that belongs at the
top of the list is money.

I think one of the strangest
paradoxes of what's happened is

that we have been willing to
pay more and more and more

to elect governments that we
like less and less and less.

The last presidential
election cycle came

in at 5.3 billion dollars, up 70
percent in the last two cycles.

The Center for Responsive
Politics

which compiles these
numbers believes

that the 2010 midterms
we've just suffered

through will cost
nearly 4 billion

up 300 percent in ten years.

The money doesn't stop
at elections of course.

It provides a daily opening
for the lobbying industry.

It has been reported that this
industry spent 1.4 million

dollars a day during the
healthcare debate and more

than a billion during the debate
over the Financial Reform Bill.

To pay what have become
astronomical campaign costs

members of Congress have
to begin fund raising

for the next election
basically on the day

after they're sworn in.

That's one of the reasons
members go home every weekend,

and one of the reasons therefore

that we have a three-day
legislative work week.

That means that they don't bring
their families to Washington

and they no longer
socialize with colleagues

because there's no
time, and certainly not

with members of the other party.

It's much easier to hate
someone you don't know.

And it's much harder to hammer
out a tough compromise with--

and much harder to hammer
out a tough compromise.

And this of course feeds
the bitter partisanship

that we see in the Congress.

Campaign Finance Reform as hard
as it is to be both effective

and to meet constitutional
requirements

in my view absolutely
will have to be a part

of a better American future.

The Senate in particular
is a broken body crippled

by secret holds, arcane rules
that are designed for delay

and by threatened filibusters
which have grown completely

out of control in recent years.

In a splendid New Yorker piece
this summer, last August.

George Packer quotes freshman
Senator Michael Bennet

from Colorado who was appointed
last year to fill an empty seat.

And Bennet says "Sit
and watch us

for seven days, just
watch the floor.

You know what you'll
see happening?

Nothing. When I'm in the chair I
sit there thinking I wonder what

their doing in China right now."

External changes are for which
Congress has no control have had

an effect as well.

In that same piece, Senator
Dodd remembers "I used

to have 11 Connecticut
newspaper reporters

who covered me on a daily basis.

I don't have 1 today and
haven't had for several years.

Instead, DC publications"-- and
here he's talking about bloggers

and the five political dailies,
five that cover the Hill,

"Instead DC publications
only see me

through the prism of conflict."

>> President Carter
started a trend as the first

to campaign explicitly against
the people in Washington.

President Reagan escalated that
to campaign against government,

much has flowed from both.

I don't know all
the forces that have

so deeply eroded Americans
confidence in their government

and no one I think knows which
have contributed, how much.

But they have produced
a government, I think,

that is manifestly smaller, less
able, less worthy of respect

than this country
deserves or needs.

I do believe that the
diagnosis of what has changed

over these last 3
decades, three and half

and of what it would
take to reverse it is

by far the important
policy issue we face.

The farther backward you can
look Winston Churchill said,

like a good historian,

the farther forward
you are likely to see.

And I think that's where we have

to cast our mind back
over this period.

I hope that some of you will
contribute to the massive task

of figuring this out, providing
the answers and helping

to find the solutions.

And I thank you for listening

and look forward
to our discussion.

[ Applause ]

[ Inaudible Remark ]

>> Doctor Mathews has kindly
agreed to take some questions

and I'll ask her to repeat them

so that our video viewers are
able to hear the full exchange.

>> Yes sir?

>> A wonderful talk
and I agree completely

with every word you said except
I think it's too optimistic.

[ Laughter ]

>> Climate change is one
that [inaudible] I think

at this point a large segment
of the American people are

in the groups of
religious fundamentalism,

market fundamentalism,
constitutional fundamentalism

and as those things
play themselves

out under the [inaudible] market
fundamentalism play that's going

on, [inaudible] I think
we're in store for a number

of additional crises

and problems whether it's
the teaching of evolution

or it's the legality of
Medicare, constitutionality of--

where does it say
in the constitution

that we can have Medicare?

Where does it say we
couldn't-- we could buy Alaska?

But-- [laughter].

[ Inaudible Remark ]

>> But I think those three
fundamentalisms are gaining

strength and I think we'll
be increasingly deflected

in the next Congress
maybe beyond.

>> Do you want me
to repeat that or?

[Laughter] Well the-- I
mean it was a comment rather

than a question which is
fine to the nice effect

that the gentlemen thought
I was too optimistic

which is great to hear.

And that we are caught
in the grip of--

the American people are
caught in a grip of a series

of what he calls
fundamentalisms.

What I sometimes, you know,
I think we have to be--

I'm an empiricist so I like
to have data which I've tried

to share with you,
about what's happening.

And, you know, it's easy
to have strong feelings

about what's going on
but I think this is

such an important question that
we have to-- we have to know,

we have to figure
it out with data.

I wonder whether we--
and this is a wonder

to match your wonders,
whether we came

out of the slide I described
from the mid '60s to 1980,

that dark turbulent period

and discovered ourselves
split with--

in a country with two
different sets of values.

And, you know, that the pain
and anger and profound upheaval

of the Vietnam War separated
us into camps and that part

of the inability to find
leadership again came

because you can't achieve
leadership unless there is a

body of shared values.

But I don't know, you
know, that's speculation

and feel but that's all.

Just one other comment I'd make
to yours, I know, I mean there--

I could have extended
the list as I said

and climate story
is a terrible one.

But on the other hand, this
country has great powers

of innovation in the
social sector as well

in technology and science.

And I don't give up, I think
we're in a scary period

because I, you know, at
some point trends do become

irreversible, at some point.

I don't believe we're there yet.

But I think in order not to get
there we better really focus

on this and I don't see it
generally defined this way

or happening, so I-- yes?

>> My question has to
a little bit with one

of the issues probably
also found in your list

that you didn't get around
to and that's education.

I'm mostly thinking that
we've got school systems

that are highly dysfunctional
and huge amounts of places.

We've got people who are
segregated by economics

and are going to only some
kind of schools as opposed

to other kinds of schools.

People are across these--

in these ideological gulfs
that you were talking about,

are having much to do
with those who aren't

like them anymore,
positive or negative.

Bob Putnam in his Bowling Alone

and other subsequent studies
talked about coinciding

that that period, the mid
'60s, being the high point

of civic societies,
civil societies

where people broadly were
engaged in everything

from scouting to like healthy
animal [inaudible], the elks,

the moose, PTAs and it
started declining in the '65

and I think it's
emblematic of our time.

Tom Frank in What's
the Matter with Kansas?

People voting against
their economic interest

because of ideology helping
it, and people wanting

to feel comfortable off in
one pure place as opposed

to the muddy center,
[inaudible] gone on that

and whether we got
fundamental failure of education

which goes along with the
daily newspapers [inaudible]

and people just listening
to what they want to hear.

>> Well, the question
has to do with the state

of our education system and I
am not an expert on it at all.

It is certainly true
that the advent

of cable news has transformed
news from-- television news,

from a place that provides
information to a place

that provides ammunition.

And blogs and online media tend
to be directed and read by--

and chosen by people

to reinforce what
they already believe

and that I think is a big
part of what's happening

and as Dodd quote, I
shared with you suggest--

there is a big shift in what
is being covered from news

that is relevant to
peoples wellbeing

and inside political
conflict and inside stories

of political conflict.

I can't say too much

about education 'cause I just
am not-- I don't know enough.

My hunch about these issues
is that they are contributors

but they're not the core of it.

They've probably
made something worse

but I just have the feeling we
haven't peeled the onion back

far enough to know to have
found those core things

yet and-- but that's a hunch.

Yes? Who wants to go first?

You go first and then you, yes?

>> I'm very pessimistic in some
sense but I'm very concerned

about the solutions
to our problem.

I think the one thing you did
not mention though I suspect

you're very aware of is peak
oil which I'm very convinced

that we've hit and it's
gonna really present us

with very difficult
situations of country.

>> We have to think about and
I think that the positive thing

when I was an under graduate
student [inaudible] France,

a new constitution in 1958 that
made profound impact I think

in terms of the effectiveness
on the French governor,

it was still the
same French man.

I think that you can make
institutional changes

and they can improve things.

I have my own ideas on this

but I'm very curious what ideas
you might put out in terms

of what changes can we make

so that our political
system serves us well?

>> When-- you're first
sentence, you said a word

that I didn't catch that
this question was aimed at.

>> I meant very pessimistic--

>> Oh, peak oil, peak oil.

>> Peak oil, yes.

>> You know there's a paradox

about what we call
renewable resources

and so called non-renewable
resources.

The problem-- the so
called renewable resources

in fact, can disappear.

You can make a species extinct.

Non-renewable resources
are badly named

because they never run out.

The price just goes up
until we stop using them.

So, in fact, they're named in
a completely confusing way.

I-- we've been on a downward
slope on oil production

for some time and-- but proven
resources are still growing,

natural gas resources
are growing steeply.

We have a whole new universe,

shale gas out there now
that could be tapped.

I-- the problem I see
with energy and, you know,

there were a lot of
environmentalists worried

about peak oil in 1974.

It's not that we're gonna
run out of oil, we're not.

The problem is oil is too cheap.

The problem is we have to choose
to price energy at its real cost

which includes climate, which
includes other pollution,

which includes national security
et cetera, et cetera, et cetera.

And if we do that out there
is this gigantic resource.

I-- you know, for years I
worked a lot on the ozone issue

and for years and years
and years, in fact,

it took about 17 years to deal

with the problem
of ozone depletion.

And people were screaming that
there was no possible substitute

for chlorofluorocarbons because
they were inert and easy to deal

with and cheap and abundant
and did this wonderful thing

in all the uses that
they were used for.

And there were studies that
put the costs of replacing them

in billions and billions
and billions of dollars

and this fight went on forever.

When we finally took action

on banning chlorofluorocarbons
there was--

after the treaty
was finally signed,

an international technology
fair sort of thing 3 months

after the treaty was
signed and there were more

than 300 exhibits of
chlorofluorocarbons substitutes.

All that technology was
sitting in the closet.

It existed already.

And the cost of banning
chlorofluorocarbons is probably

the negative, that is the
substitutes have been cheaper.

I think the same thing is
gonna happen with energy.

I mean you've got, you know,
you don't have to listen

to environmentalists you've
got the McKenzie Institute,

McKenzie Company
estimating the waste resource

at 40 percent of current use.

You've got Edison
Electric Institute

which is the research arm

of the electric utility industry
estimating it at 25 percent

of electricity use, this is
with existing technologies

and we've spent almost
nothing on R&D.

This doesn't make a
tremendous lot of sense

to spend an awful
lot of money on R&D

when there's no demand pull.

You know, you've got to
raise the prices first

and then the market provides
the demand pull instead

of the government.

So this is, I think, gonna turn

out to be an infinitely
simpler technical question

than we think.

The problem is not
that it's not out there

and that we can't
have plenty of energy.

The problem is political will.

The problem is not the cost to
society the problem is the cost

to the existing distribution
of winners and losers.

There are gonna be
different winners and losers.

And the current winners have a
whole lot of political power.

Yeah?

>> So given that the
Carnegie Endowment

and [inaudible] worked
globally I wonder

if you can give us a little
comparative international

perspective on your argument

in other words is
it just a US problem

or is it a problem we're facing

in other advanced
countries as well?

Give you an example that
might lead to that kind

of thinking the European
countries were trying

to pass the new constitution
totally oblivious

to the fact the voters were
not on board and in fact,

[inaudible] down in France
and Netherlands and so on.

So is this in some
sense a crisis

of the western civilization more
broadly or is it just the US

and if it's differential,
does that lead to ideas on how

to tackle it given that
there may be examples

of countries that have [noise]?

>> I don't think it's European.

In fact, I'm struck by the
opposite and, you know what?

I recognize I'm speaking
to a European.

But, you know, I think Americans
have poo-pooed and missed--

and missed the importance
of European Union

for 40 years, you know?

And every stage as it moved
along, every American said well,

it will never go
further, you know?

And it will never get
the common currency.

And, you know, every
stage, right?

Meanwhile the United States was
trying to balance the interests

of Ohio and Vermont
took 15 years

on acid rain while Europe did
8 air pollution agreements,

long distance air
pollution in the time

that we've fought
over acid rain.

And when I think what has
to be struck, you know,

it's true that the
closer you get

to the EU the worse it looks.

It looks better from far away.

But-- and it's true, as you say,
there have been major problems.

But I think the fact of
it is enormous relative

to what we have done
in this period

and took an enormous
amount of political energy.

You know, in fact, I think
it has drained an awful lot

of political energy

out of everything
else and continues to.

But you have to be struck by
what's happened for example

in the UK in recent
months, you know?

Faced by a really horrible
economic situation they elect a

coalition government, it
takes office, it's stable.

It is un-- you know, it is
cutting spending in a way

that would-- would be
completely impossible here.

It's talking about
adding a 20 percent--

you know the VAT tax on top of
a gasoline tax that is 4 dollars

and 86 cents a gallon, the tax.

So-- and I think Europe
is responding to--

I mean European countries
have made some, you know,

terrible mistakes as did we
but I think there is a degree

of readiness to confront
it with some things--

it's hard for me to imagine
there being the political will

to do here, so I see a
different picture, yes?

>> Hi I'd be very curious
to hear your response

or your opinion about
the Rally for Sanity

that took place a
couple of weeks ago.

Two hundred and fifty
thousand people perhaps were

on the National Capital I
think that that is a statement

of some sort that got
very little analysis.

And is an energy that is not
being directed necessarily--

government people
weren't there so it's kind

of this free floating energy.

And perhaps is at some sort of
foundation where we could go,

you know, to try to answer some
of these things that you raised.

And to follow up on your
comment about the people,

I'm especially interested

in nuclear energy issues,
Nuclear Energy Law.

And to take that power away from
utilities, it's hugely funded,

and really have the-- you
know, create a political will

that could actually
answer this problem

in a much more constructive
manner that subsidies

for nuclear, long guarantees
for nuclear energy companies

in my opinion, could you,
you know, is there some sort

of like connection between this
free floating high energy level

that went to the national
mall and this need

for a political will to shift?

>> I love Jon Stewart
but I have to tell you

that I find it depressing

that our political
leadership is being offered

by television entertainers
either

on the right Glen
Back or the left.

And that's not where it's
suppose to come from so,

you know, it's great
that after--

that he answered the
Beck Rally and showed

that the country is not
that country completely.

But to me the fact that
those rallies happen

in that context is
a sign of weakness.

It's a sign of--
when something wrong.

I wasn't there.

I talked to a lot
of people who were.

It apparently felt really good
but you couldn't hear anything

or see anything and so-- I
told you my sense about it.

I guess that Stewart wouldn't
object to what I just said,

you know, that this
is a problem,

this not where leadership
belongs.

On nuclear, nuclear could have--

I could have used
as another example.

I mean we have been
trying to find a solution

for nuclear wastes since 1950s

and we don't have one
yet or even close.

And I think nuclear has to be
a part of our energy mix and,

you know, there's lot more
that I could say about it

but I don't think it, you know,
nuclear is a weird problem

because it's never gotten over
the circumstances of its birth.

That the government
said "Hey guys,

we've got this neat
new way to boil water

and it's easy ad it's
cheap and it's simple."

And none of that was true.

And the utility industry,
the nuclear utilities grew

up with this sort of--
when that turned out not

to be true we just kind
of chip on their shoulder

where they keep thinking
people don't understand.

And they keep trying
to take short cuts

and it always back fires.

It's an industry that could've--
it's just not well run.

And-- in a strategic sense,
I think, and could have been

and could well be,
you know, so yes?

>> I always keep wondering about
this survey you've talked about,

I forget when you-- they
started at 58 or so?

>> Yeah.

>> But having been a war baby
myself, I'm wondering in where

after the war the United States
had absolutely no competition

with our industry.

I wonder if part of this
response you're hearing is a

frustration of people trying
to figure out where we're--

where the United States now
has lots of competition and,

you know, a frustration people

with different economic outlook
maybe, or trying to figure

out their place,
so I don't know.

>> It could well be true.

I'm sorry.

The question had to do
with whether in the 1950s--

as early as the '50s and
the early '60s whether

with the US world
economic dominance,

whether that was a heavy
influence in this--

in the 75 percent of people who
felt good about the government.

I think that's true, you know,

we've had a Post
War Policy designed

to spread economic growth.

We've invested an awful lot in
the growth of other countries

and we succeeded at
some cost to ourselves.

It was still the
right thing to do.

But you may be right and it
may also have been partly a--

the after glow of the war
still, things take a long--

take some time to fade.

World War II was a period when
the country was together as--

I mean that's the one
thing about wars they tend

to do that in societies.

And-- but we also have

to remember the '60s were
terrible time, you know?

Our cities were burning,
people were being assassinated.

It wasn't just the happy
after glow of World War II

or a period of, you know, of
great economic well being, yes?

>> With like the relatively
new and I guess currently

like nearly extreme, I
guess thought processes

of party politics
being, you know,

like you're with us
or you're against us.

And there's like a solid
divide between parties like--

what do you envision is the
solution to this mentality

and like the gridlock or
the conflicts of interest

that causes our Capitol
Hill or do you see this

as like the slow
evolution of the--

like the [inaudible] safeguards
that the founding fathers built

into our governmental system.

>> Well, I think the
question was what do I think

about this [inaudible]
in a sense, right?

And, you know, as I told you I
mean the only honest answer is I

don't know what the answers are.

I think what I can offer is
fixing our attention on a trend

that I think is there and trying
to give it some specificity

and some concreteness rather
than sort of a general feeling

of things aren't right.

I don't believe that there's
anything fundamentally wrong

with our system of
constitutional checks

and balances but I think
there are things wrong, many,

some of which I suggested

with how the system
is currently working.

And, you know, the difficulty
is that for example if you start

to talk about how Congress has
changed since the 1970's its

over determined, right?

There are too many
reasons you could cite

for this horrible decline.

And in a situation when you've
got too many reasons it's

awfully easy to find the
wrong ones, you know,

because you don't
know what to fix.

As I mentioned, right,
Jimmy Carter--

he was the first presidential
candidate to campaign

against Washington,
that was new, 1976.

And then Regan came
in and he campaigned

against government and-- but
they were presumably tapping

into something they
already knew was there.

So we have to look a little
bit further back and, you know,

then we had the-- enormous
shift in the Republican Party.

In the 1970s there were
17, I think is the number,

moderate Republicans
in the Senate.

Today there are none.

I mean they were a
major force and some

of those were the great men
of the Senate Jacob Javits

and a whole list, Edward
Brooke, the whole bunch of them.

So there-- and, you know,
then Newt Gingrich came in

and told members "Don't bring
your families to Washington.

Stay home.

Stay close to the people."

And that as I described
just sketched a little bit,

that produced a whole
different set of people.

And now that we are where we
are the atmosphere is so toxic

that it attacks a different
kind of people as candidates,

so the system sort of
begins to self-perpetuate.

I can't give you as I
said, a more precise answer

as to exactly what the
cause are because I can't.

And I don't anybody can.

But I think I've
identified something

that needs our deepest
attention.

I'll leave it there.

Yes?

>> You described the
slide very well and many

of us are old enough to say "Oh,
yeah we saw it happen, yeah."

And I noticed you've
touched on polarization

and all the factors
involved in the slide.

I'm wondering if you have
an opinion about how we get

out of this hole,
particularly I think some

of us would say the only thing
that ever seems to get us back

on track is a crisis
in this country.

It's the nature of what we do.

Is there more possibility than a
crisis like 9/11 to get us back

on the right track
or-- what do you see?

>> Shall I repeat that?

So the question was, you know,

well how do we get back
on the right track.

>> I don't-- well, first
of all, the crisis,

unless it's a continuing
war as I described

with 9/11 won't get us
back on the right track,

all it did was this sort
of a temporary reprieve.

And it brings its own real
risks, water boarding and,

you know, the rebalancing
of civil liberties

and the things we know about.

And, you know, I'm very
much afraid that were we

to have another terrorist attack
the country's reaction would be

a repeat of what happened in
those respects far, far worse.

But I-- again, I cannot
give you, I'm afraid,

answers until I think we
all have a clearer sense

of why it happened, and
there I can only guess, so.

Yes?

>> You seem to make a
big deal about the--

this problem that
congressmen specifically House

of Reps are spending
more time at home instead

of in Washington but--

>> Senate too.

>> Senate as well--

>> Yeah.

>> Isn't this-- isn't that
[inaudible] aren't they supposed

to be representing
their district instead

of the nation at large?

I mean their representing
for the district in order

to see the problems that
district needs to face.

Shouldn't they be
home most of the time

to actually see what
their district needs?

>> Well, hopefully they knew
what their district needed

before they ran.

But, you know, I mean here's
what their life is like,

they go home-- member, when
I worked on the hill members

of Congress lived in Washington,

their families were
in Washington.

So their work week
except when they went home

which was depending where
they lived from time

to time was a seven-day
work week in Washington

which included, as I mentioned,

time to know both their
colleagues and their own party

and then the other caucus.

Now, they leave their
families home,

they camp out in these terrible
living conditions in kind

of dormitory like
conditions in Washington.

They tend to arrive back
midday Monday and they're gone

at the end of the day, Thursday.

And people who come from
Montana and Alaska and Idaho,

they go home too every weekend.

And I don't know
what the percent is,

I was about to say half of what
they're doing is fund raising.

And I think you're point
is perfectly valid,

I think that there is a balance.

They do have time for
town halls and meeting

and hearing what their
constituents want

but their job is not just
reflecting what their

constituents want,
their job is voting

for what they see is
a national interest

and that I think is
more and more missing.

Yes?

>> Do you think there's
something we need to look

at about the evolution
of democracy?

Something that we don't yet
understand about a system

of government that we've had
for several hundred years

that has been shifting and
moving and perhaps in ways

that we don't understand no
longer reflects the needs

of our people, or that our
people are no longer educated

to understand the basic
values of democracy?

>> Wow.

[ Laughter ]

>> The question was very-- I
can't-- it was very eloquent,

is there something
about the basic nature

of democracy we don't understand
and the changing conditions

and particularly
perhaps that we--

that Americans are not
adequately educated

for being citizens in a
democracy in these conditions.

[ Inaudible Remark ]

>> I am sure-- I'm not sure.

My hunch is that
values have changed.

I don't know exactly
how and exactly why.

We-- I don't know for example
whether fewer Americans today

understand the requirements
of democracy, know the basics

of their government, et cetera
than did forty years ago.

I just-- I don't know-- I
don't know if the data exists.

I tended-- clearly, you know,
I'm scientist originally so I

like to do experiments
where one variable changes

and everything else
is held constant

and unfortunately
we can't do that.

So we've got to get pretty
good at trying to single out,

you know, the really
important factors.

And certainly the sense
of anger and frustration

with Washington not
with all government,

because it isn't visited against
state and local government,

I was saying earlier

in a conversation this
afternoon it's really striking

that especially the
western states,

they do not ideologues
as governors.

They elect moderate
people as governors

and then they send these
ideologues to the Senate to walk

around in cowboy boots
and talk crazy stuff.

[Laughter] But they don't want
them at home making decisions

that have to do with
the highways [laughter]

and their, you know?

They don't.

And you can look at this
it's a nationwide pattern.

And the same is true with
local government, right people?

So what is so troubling
is that the sense of anger

and frustration has taken itself
out in the answer being "Well,

the best thing then
is to send somebody

who doesn't know anything
about the issues."

You know? Just-- I
don't think they would--

you know, that the electorate--

this would be an
interesting question,

their going to elect somebody
like that to be governor?

I doubt it.

So that's a horrible thing
because there are a whole bunch

of decisions only the
national government can take.

And if we got a bunch
of people who think

that the right approach to
it is not to know anything

about the issues 'cause
that's simpler, you know?

Give me half the facts
I need to make decision.

You know, what's going
to be the outcome there?

Yes?

>> You said that you don't thin
we can suggest any solutions

to the problems that you
proposed so eloquently

until we know what caused them.

And I guess I would argue
that we can't afford to wait.

I once had a philosopher
who said

"Don't bring me a problem
unless you also bring me a