con f confirmation process, filibuster reform to the restoration of majority rule, to linking congressional pay, to the performance of basic congressional duties, such as producing an annual budget on time. the second basket is -- deals with the budget process itself. and i lay out a number of options for reforming the budget process, which was put in place, let us recall, through the 1974 congressional budget act, which is almost 40 years old and worked better at the beginning of those four decades than it is now. and fijly, reforms to the electrical process to begin the process of depolarizing our hyperpolarized system. point four and finally, and this is a direct response to some of the things i heard this morning.

not on only can we not decouple from economic politics we cannot decouple governing politics from electoral politics. what is said during political campaigns is a very good leading indicator of what you're going to get out of the political system and not get out of the political system. and to be blunt, if it's not discussed in a campaign and it's a matter of any significance, it is extremely unlikely to happen during a -- during the governing process, during an administration. what people say matters. what the president says in his forthcoming state of the union address matters. what appears in the platform of the opposition party later this summer matters. what is discussed in the general

election matters. and i have to say, this is my clousing thought, there is an almost complete discontinuity between the very important topics that have been discussed in this room this morning and anything that has been discussed in national political discourse at a level of visibility during the past year or right now. during the presidential nominating process. and these are bad leading indicators for the kind of discussion we're likely to get. bottom line, there are many in this room who are capable of influencing what is discussed in our nation's politics. this is a very important election. they this is a very important moment. if you want the topics that you care most about to be on the public agenda, have you to act affirmatively to put them there. >> i like bill's idea of linking congressional pay to actually producing federal budgets on time. i mean, that might actually change the incentives in a

significant way. i'd like to follow up on this exercise of connecting the dots and throw out a couple questions, any of the panelists who wants to jump in, feel free to do so and then we'll open the floor to the audience after that. how well is government doing on innovation in particular and what should the government, if anything, be doing to promote innovation? any of our panelists? and you can talk about innovation in public sector, private sector? >> you know, i was asked earlier in 2011 by someone who i considered to be an incredibly thoughtful signiscientists tryi combat a very important disease. he said, you know, who would you introduce me to in washington so that we can try to get some of these programs moving? and i'm ashamed to say in front of this group that i told him that i thought to the extent he could avoid washington, that was probably the best outcome for

him. and my sense is that there is very little that would induce the private sector to really reach out to government to try to figure out how to solve a problem. that may be an incredibly parochial and naive view but we are to a certain degree on our own. i think one of the great life bloods of this kurngts as ted was talking about before, and certainly we see every day in our company at bloomberg, is this incredible power of innovation that occurs regardless of what the external environment is like. so, i'm ashamed to say that with the malaise that exists in the world of politics and government, to the extent you can avoid that, i think, you're better off and have a much shorter path between development and ultimately success. but i don't know, ted, whether -- >> if you can't measure it, you

can't manage it. if we're serious about innovation we have to create national database and make it tra transparent to see how we're doing. you could quickly come up with some sign posts. could be numbers of startups, how many venture capital is flowing into startups, how many patent thes have been filed, how many new product launches have there been, how many new plants have been opened. you know, you could -- you can make a list, how many jobs have been created. i don't think we do that. so, we leave it to singular, heroic, romantic figures. that's why we were as a country in national mourning with the passing of steve jobs. walter isaacson's book, people

reading it like the bible. we are desperate as a people to recapture what made the company great. we're a startup nation. we're at our heart entrepreneurs. the country was based on innovation, our founding fathers really were our first entrepreneurs. so, i do think that washington, because much this political gridlock, gets in the way more than it helps. and that's the big issue. one of the intellectual fights is do you want government to create jobs or do you want industry to create jobs. it's pretty binary. and if government creates jobs, how do we know that we're getting our money's worth because we as taxpayers in essence are becoming venture capitalists.

and will the government be able to manage those functions and those businesses and investments well? we know there's management and leadership investing trying to make these companies successful. i'm ashamed to say that i agree whenever i'm asked what's the best thing that government can do to help entrepreneurial business. i say, do nothing, get out of the way because speed, innovation, fresh ways of looking at things is what differentiates a startup from an institution and the government has gone truly the other way in terms of not being able to move quickly on things and overregulating things, especially to blunt young companies to scale.

>> well, i hope everybody was listening very, very carefully to those last two remarks, because they bear eloquent testimony to one of the per verse consequences political dysfunction. that is that important parts of the private sector f i heard correctly, are basically giving up on government. and it seems to me, if there is any key question we face in this day as a country, whether that represents an adequate response to the challenges we have faced. you know, is it simply a matter of government getting out of the way to quote. that may work for some purposes but for others, others, you know, throughout human history

have required effective public investment, starting with infrastructure but not ending there. it's unlikely to be sufficient. i believe, ted, you were telling your story to control the traffic lights in washington, d.c., which is a business issue, right? and that's a microexample of political dysfunction that has a bearing on your customers. and i could multiply example after example, i don't think it is binary. government creating jobs -- or business creating job because there's a third possibility which i actually think is the truth. namely that the environment of incentives and opportunities and prohibitions and regulations that government creates either facilitates or impairs the growth of business.

and that has certainly been the truth -- the case throughout american history. go back to the 19th century, you know, with the system of canals facilitating commerce, built with, you know -- built through the public sector and henry clay's american plan and all of that. the whole land grant system, abraham lincoln's biggest achievement, other than perhaps winning the civil war. you know, the idea, the idea that the best thing that government can now do is get out of the way, is maybe a sad truth and the symptom of a deep disease i don't think we can live with in this country. i'm putting it as starkly as possible. if you don't agree, please say so. that's why we're here. >> i think, too, what we're seeing is a forcing of business

leaders to pursue double bottom line initiatives. that you're trying to run a business you're starting to run enterprises like they're a government. facebook is going to be china. a billion people with some centralized command. it can communicate to its citizens in a very efficient fashion. what do governments do? they have to defend their citizens. facebook honestly is concerned about its citizens safety and security. it raecreates currency. facebook is creating its own currency. we're starting to see organizations take a lot of what government should do into our

own hands. might be in a virtual way, but we really are seeing that we have to take care of our employees. howard schultz is on the board of groupon and become good friends with howard. he basically has taken on a we have to do the work. we have to be articulate and deliver the votes. we have to communicate to government but we have to deal with our people and our customers as if we're our own governing body. and if we can be exempl lars in the way we run our business, maybe that's a good proxy for what we're asking for government. i was mayor of my town for several years in florida. you know, i learned a lot about local government. then when i was president of aol

i used to say, i'm running the fastest growing city in the world. we would go from a million to 4 million to 7 million, 12 million people. and governing really is a function of focusing on the vital few. and what i think is what has happened is there is so much noise it our system right now that we've lost sight of what the big vital deliverables of the government is. e empl fiing the best ways to work around goals that are measurable. and that's the thing that i keep coming back to. if you're a small business, midsize business, biggest

industry in the world, you have share the goals and metrics. and on a daily, weekly, monthly, quarterly basis you can review to see how you're doing. and and the company with the biggest budget of all time, we don't do that. and i just don't get it. so i think that's -- if we could force that kind of accountability where we had a national score card around the big deliverables and how we are doing, it would certainly make your election vote easier. it wouldn't be based on rhetoric. it would be based on deliverable. and i think that would be a way to start something that brookings could help with. >> in fact, not only do we not have metrics. in some areas we have weakened our data collection and data

analysis capacities. did you want to jump in? >> no. i just want to add, and everyone in this room is sensitive to this fact but one of the things that clearly the web has done for all of us with stain taken yous flow of information around the world is given us a much better understanding of what's going on in other parts of the world. and being luck enough to be in a position to run a company that is very global in scope, the one thing i come back, when i come home after a trip, whether it's to asia or south america or the middle east or africa, wherever it may be, is a lack of sense of urgency that exists here in dealing with some of these issue and dealing with them in a much more highly competitive world than we've ever operated in. and if we -- which i hope we never do, give up the role that we play in the global economy, we are at risk today of ceding

that responsibility to others, and i think to a large extent, some of that will be our fault. and i think that adds further complication to what both ted and bill were saying. that is the world is flat, smaller and it's just a lot different than it was when many of us in this room were growing up. and we have to factor that in in we think of the competitive implications. >> why don't we bring the audience into this. we have a question right up front there. microphones are coming around. >> jim robinson. let me make an observation because today is in stark contrast with yesterday. we're here at brookings. we had the metro program. the focus of our mayors, focus on governs. and the feeling that it's a brookings moment, because we are

having examples, significant examples of public, private initiatives, leadership by governors, mayors, to make a difference because they realize just what we're saying here. the federal government has gotten themselves to the point where they're irrelevant, at best irrelevant. at worst, which is what is happening, they're in the way. so, how do you deal with this paradigm? and it's got to happen at the local level in state and local and it is happening. i'm optimistic about that as much as i am pessimistic about the thought that we somehow are going to change and break that dynamic between the political process is counterproductive with economic development and job creation.

>> i've lived in virginia for a long time. i just moved into maryland. it's been named top year after year after year. it has great business practices. and i think there's a direct correlation between their governor can only run and serve for one term. so, when they get in they have to work as hard and as fast as they can. it's also unlimited giving which i find interesting. i thought that would be a detriment. we've had a series of really good governors. the state runs well. and it's kind of -- you're in, you've got your 100 days to articulate your plan. you sprint to that fourth year and you're gone. next guy comes in. so, i agree with you.

i think a centralized version of running things versus decentralized high tech, high touch. i cannot why yesterday was more upbeat than today. >> i can assure you that this natural bias will be seen by everyone very quickly. if you look at what the mayor of new york has done, in the ten years he's been there, and the entrepreneurship, the most recent example which many of you have seen, is the cornell project, which obviously has been spearheaded by mike, but it does show, if you have an ability to make decisions and have are the authority to execute those decisions, you really can have a significant impact. i think the biggest concern about the city of new york is when the mayor steps down and it gets -- goes back into much more of a political process. unfortunately, i think some of the gains may, unfortunately, unravel.

>> just a brief re-election on the dichotomy you're observing, which is absolutely right. under our constitutional system, there are certain large policy questions that only the federal government is empowered to address. and many of those questions have an impact on economic growth and innovation. and i was listening this morning, as i'm sure everybody else was. a number of people, for example, talked about i wi talk talked about immigration policy. particularly that high skilled people, especially in sciences and engineering. despite the best effort of our states, immigration policy is still the exclusive province the federal government.

and the last time i checked, states and localities did not have the power to negotiate trade treaties. the absence of which, you know, can have a very important debilitating effect on export opportunities. et cetera, et cetera. you know, so i don't -- in the same way that i don't think the private sector has the luxury of retreating from the public sector, so too i don't think our concern with governance has the luxury of retreating from national dysfunctions to state and local function. because there's too much that's vital that's left languishing in this state of gridlock, which i don't think as a country and as a economy and as a society we can really afford. that's why -- and that's why i spend my time as a brooking scholar, beating my head against what most people in this room probably regard as a wall.

because we don't get through that wall. if we don't have a national government that can function once again, then our future is one of economic decline and i would add classification. i don't think that's a future anybody in this room would like to see. >> if we say innovation, job creation or the deliverables, then we say, well, we need math majors. we need to graduate more than 20,000 mathematic ph.d.s each year. algorithmic work is the basic building block of everything that we're building in the new economy, from financial systems to media to marketing. it doesn't matter. with graduate, 20, 30,000 students per year.

if we said that was important, we would embrace bringing in more students who were mathematics, ph.d.s and getting them to stay here and work for our companies. let's not forget sergei brin, co-founder of google have hired a lot of people, his further was a russian immigrant, came to university of maryland, instructor at university of maryland. and my dad's a greek immigrant. he was aye waiter. he wasn't a mathematician. and i just think that that the discussion becomes politicized and gets away from the basic, what are we trying to accomplish? and right now the economy and unemployment are the two big drivers of the malaise the country is under.

so, we put people on the moon. we've been productive in manhattan projects. mayors have proven they can organize and turn major economies around. we can do it. i just think that you have to hold people accountable for what it is that we want done. and then hold their feet to the fire to get those vital few things built. >> we have time for one more question right here. >> in palo alto when we went was the board. today it's quite striking to hear that many of the panelists basically said that washington had become an ak row nichl. so, my question is, what specific metrics and goal could

washington have to kind of regain its relevance? what would be your view? >> gdp, knocking down unemployment, having a quality of life index. bhutan has a happiness index. we're now the 13th least happy nation in the world. i mean, i do think that we can rally around some very, very important things. we've done it locally. you know, college education as a deliverable, stunning 40% of d.c. high school students don't go to college. so, that's a metric that people are rallying around locally because we know the biggest indicator of poverty is not getting a college education.

so i think there are glaring big things we can metric and measure. maybe that is something the board at brookings can start to work on to have a national index that we can have dialogue with. and probably more instructive and helpful to politicians who basically listen to the loudest minority voices that have been amplified by the web. in the downside of what we've created in social media and this plethora of new distribution is that if you have an opinion you can deliver it on twitter and facebook and on video and youtube. instead of it being one vote, one voice, it looks like a majority of the voices. so, i do think that there's been

an overhang, negative overhang from this plethora of communications on the political system. >> we're out of time. i want to thank peter, ted and bill. we will have a buffet lunch available out in the hallway so you can feel free to grab food and bring it back in. we'll reconvene at 2 p.m. today. thank you very much. >> on your screen is representative chris smith who heads the executive china commission. they're holding a hearing on china human rights abuses. the committee will hearing from imprisonment of china human rights attorney who's been missing for two years.

his wife will be at today's hearing along with the founder of freedom now and china aid association president bob few. we expect this hearing to get under way here live on c-span 3.