e? iran and libya. what you are describing is not something -- they have tried. they have absolutely tried. we have to be real about this. they are trying. that is why engagement in the proliferation efforts that are ongoing are hugely important. look, the more i get into this stuff, there are some things were you just go, holy. as the rest of the world gets weak and more insular, we have to be more engaged because these things will occur. great question. >> it is and it is going to have to be the last one.

governor, we in chicago and the council hugely appreciate your time and the opportunity to take your principles from your remarks and to have a conversation with all of us around those principles. and we are truly pleased and privileged to have the first opportunity to do so. >> thank you. [applause] >> former defense secretary william cohen next on c-span.

business leaders talk about the effect inovations have in the workforce. cspan-2, follow officials on violent extremists. now, william cohen on security challenges. he was defense secretary under clinton.

rudy: good morning, and welcome to the center of american progress for our program, a look at the future of defense, a conversation with former secretary of defense william cohen. last year with a turbulent one for national security --russia's aggression in ukraine, extremists, boko haram, the collapse of libya, and yemen and then ebola in the pandemic crisis. domestically, the fractious political order make tough choices on defense difficult raising the risk of the ongoing

sequester and misalignment of u.s. strategy with resources and investment. yesterday, a new secretary of defense, ashton carter, took the oath of office, and inherent in office filled with the most couple can challenges, and not much of a honeymoon facing him. so, as this debate on all of issues have keyed up, we are glad to welcome the former secretary of defense, william cohen, for a wide discussion on the future of american defense from how we manage difficult politics at home, to global areas of crisis, to juggling long-term, strategic priorities, and making smart investments. the conversation will offer insights into the way forward

for america's national security during these turbulent days. now, a couple of things -- and then a little bit longer introduction on secretary cohen. first, cheering, catherine blakey, our defense policy analyst at the center. she is working on her phd at the university of california. she is author, along with dr. lawrence kohr on a recent paper, "defense budget deja vu," published last week and available here on the website. i also know that in a former life, kate was the senior budget analyst for defense at the library of congress, but the pesky sequester has impacted some of the most capable and rising stars on the federal

side, and here we are lucky to have kate as our defense budget expert. let me more formally introduced william cohen, currently the chairman and chief executive officer of the cowen group in washington dc, but with an inbox that extends to almost every capital of the globe. we know he serves on the judiciary committee in 1974 during the nixon impeachment hearings is a very young man but interestingly, as a house member, in 1974, he traveled to thailand to reestablish an ally following withdrawal from me in from the and him. it turns out the policy for exiting the policy for exiting worst is every bit as complicated as getting involved so dealing with an ally in the war zone is trickier than it seems. in 1978, he was sent to the

senate, served on the armed services committee, and also chaired the government affairs committee on oversight, where computers were one of their early issues of inquiry. today, we live in the world of cyber, where the financial interest, the news media, sony pictures, all deal with the security of their networks. the act first dealt with trying to move us into the 21st century. also served on the select committee for intelligence as vice-chairman, and then, in the late 1980's, as the council on foreign dinner it -- relations he chaired -- council on foreign relations, chaired the middle

east study group, a critical task, and as he was looking forward to the university of maine and other pursuits president clinton, in january, 1997, asked william cohen to serve as secretary of defense. in a gesture of bipartisanship reminiscent of arthur vandenberg crossing the aisle to work with harry truman on securing the passage of the marshall plan in the late 1940's, bill cohen stepped into the pentagon during a very challenging period for the united states. his three goals for his tenure were succeeding in the modernization of the military, and maintaining its readiness to fight. his successors at the pentagon inherited a military that was ready to go, dealing straightforward with recruiting and retention problems, making sure we were bringing in the most capable people, taking care of their quality of life, and making sure that they had a

first-class housing to live in and then strengthening security relationships with countries around the world. i was honored to be part of their leadership team, both as undersecretary for personnel and readiness, and later, deputy secretary of defense, but it was clear that secretary bill cohen was engaged, made some of the most important missions to the middle east, the most senior official to meet with young assad as he took over syria, in a straightforward dialogue that reminds us of the challenges facing serious then and now. now, he is also in his spare time, the author of 13 works of nonfiction, fiction, and poetry. his next book, "collision," will come out on june 30 and deal with asteroid mining. given his preceding work on computers a decade ago, we will be interested to know where the asterisk issues take us -- as trade is -- asteroid issues take

us now that we are capable of landing on asteroids. he is also a member of the new england all-star hall of fame for basketball players, the great sport of his career, and had he not been a public servant, may have been a professional basketball player. so, after 31 years of service, secretary william cohen has left a record of unparalleled incompetent, integrity, and respect, and he brings to this program, and this discussion and unrivaled knowledge and reputation relationships across america and around the globe turn we are very happy to have him today for this program on national security. so, kate, and secretary william cohen, thank you very much. [applause]

katherine: well, secretary cohen, thank you for joining us today. we are looking forward to a broad ranging conversation on the challenges we face. secretary cohen: i would like to say word of thanks to rudy. there was a book written called "the quiet american," a novel. rudy is a quiet american. he is probably the most quiet, influential voice in washington, and has he mentioned, he and i have known each other a long time. when he was the staff director for the house armed services committee, and then serving over the pentagon -- people still come to him for insight and

advice, and most recently, he managed the transition for ashton carter during his transformation process. thank you for arranging for me to be here, and john podesta, of course, i worked with him for four years at a pleasure to be with all of you. katherine: wonderful. the way i would like to structure the conversation is starting with more domestic concerns and then brought into the international arena. there is no shortage of hotspots and trouble issues around the world, but let's start with my daily with, the defense budget. it is coming in that -- at about $35 billion over the pentagon's cap, so there is a dilemma unless congress amends the cap or makes tough choices on what to appropriate to under the cap, the pentagon will face another

sequester, like in 2013. you have been a long advocate of sensible defense reform, military compensation reform reducing the amount of the back-office personnel, and greater efficiencies in the pentagon operations. the budget makes a lot of these recommendations, but it is not the first time we have seen nearly all of these recommendations. like in past submissions, many seem dead on arrival. the prospect of a bipartisan deal for sequester relief are also looking slim. what is your assessment of how the republican congress will handle this storm? secretary cohen: first, let me say, with respect to sequester i think that has been an exercise in political malfeasance. the notion that you would endorse across-the-board cuts without regard to requirements irrespective of strategy, to me, is a forfeiture of public trust, and i think anyone who subscribes to that should be removed from office. i would hope that the first

thing secretary carter would do would be to push for an elimination of the sequester process, and go back to appropriating, as we once did. so, and i encouraged that they will do that? the answer is no. i think there is such division amongst republicans at this point, even though in charge of both houses, that there is a debate that will take place between those that are committed to reducing the federal debt and annual deficits, and those that are committed to an internationalist approach to the united states. frankly, i think we have yet to decide who we are, and what america's role is -- really used the word "turbulence." what is america's role in a world of constant turbulence? we have not seen a more difficult situation in which the instability is coming at us with a velocity not seen before. so, what is our role, and, frankly, i do not know what our role is going to be, what the

congress is going to decide, or what the president is going to decide. in my judgment, the president has been pursuing, until recently, a policy of this engagement. we were out of iraq until recently. we were getting, pretty much out of afghanistan. we were not getting involved in syria. we were not getting involved in ukraine. we were shifting focus over to the asia-pacific region, and assuming that europe could handle itself, and that there was no russian threat at that time, so our policy has been one of striking back -- almost nation-building at home, and that was coming from republicans on the right, on the libertarian side, and democrats on the left. so, we have to decide, looking at the landscape today, and what is likely to take place in the future, what should be the role of the united states? is it disengagement or engagement? is it leading from behind, or is

it as the germans -- by the way, i was in munich a week or so ago, and the germans defense secretary said germany's role was to lead from the center. i do not know what that means. i do not know what that means. so, we have to decide what will the united states will play. we do know this, when we disengage, when we pull back bad things happen. so, we have to decide our role in the world. we have to decide whether we are willing to appropriate the kind of dollars necessary to facilitate that role, or are we going to sit back and see events take place in which we have very little influence. katherine: thank you. on this term of disengagement, let's talk a little bit about nato. you came back from munich. nato would be facing a difficult year with a drawback from afghanistan in a reassessment of what the nato alliance means. in some ways, the ongoing

aggression from russia has put the role of the nato mission in really spirit what do you see forward as the path for nato given the current challenges for security in europe, which i do not think many people saw coming last year at all? william cohen i think --secretary cohen: i think nato continues to be the most important military/political organization in history. it has been more political recently, but it is a hybrid institution. once again, i am not particularly encouraged by what i have seen to date. ruby and i have talked about burden-sharing. this is a constant theme. there is an inadequate level of sharing by our european friends. the budgets of the europeans

continue to go down. there has been a pledge, most recently, to 2% of gdp over the next 10 years. i think that is going to be difficult, if not impossible for a number of members to achieve that. i'm not sure there is the political will to achieve that so the united states, initially, with nato, we picked up 50% of the burden with nato. the other members of the alliance picked up the other 50%. now it is 75/25. soon it will be 80/20. that is not sustainable. we will have to try to persuade the europeans they have to do more, but they have to see it in their self-interest, and what russia is doing might help to concentrate the mind wonderfully that there is still a threat to them. that, coupled with what is taking place with the euro greece, and other nations, is really going to focus their attention on what they need to do to have a whole, free, and

secure europe. that has been the goal. there seems to be some erosion at the edges on that. katherine: katherine: -- katherine: the 2% standard has long been a goal, and more of a theory then practice. one of the issues the u.s. has faced in europe, and also around the world, has been keeping engagement with our allies and partners strong, and particularly in the situation with the ukraine and russia now in eastern europe, there is a lot of talk about how strong the sanctions against russia will be, how long we can keep the financial sanctions impact, and whether russia is trying to peel off some of the less-committed european allies. what are your impressions, having just come back from munich, on the political as well as the military engagement on the european side? secretary cohen: chancellor merkel gave a speech a week or two ago, and said negotiations

with russia are the only solutions. providing arms to the ukrainian government would not be productive. that did not sit well with the american delegation, and it was the largest american delegation in the years that i have been going to the munich security conference, which has been some 35 years now. most of the american delegation reacted to that saying when you do not send arms, putin's forces continue to attack, so if people are willing to fight and die shouldn't they be given some weaponry defensive in nature to fight and die with? that does not seem to be the german position, nor that of the europeans, so i do not see the europeans contributing that much other than continuing to support sanctions, possibly -- i say possibly -- intensifying them, but i do not see that momentum. katherine: given the recent

setbacks for ukrainian forces in the east, would you support arming the ukrainians? secretary cohen: i want. right now they are fighting tanks with rifles, not a fair opportunity to defend their interests. president putin, notwithstanding, he will continue to destabilize, certainly the eastern part of the ukraine, and make it virtually impossible for the ukrainians to be able to function effectively as a government, and serve as a center for any -- disincentive for any consideration to the ukraine joining the eu. this is something lindsey graham made clear during the conference. he said the europeans have an obligation here. they were the ones that were encouraging the ukraine to come and join the eu. when the ukrainian picked that up and started moving toward the

eu, that is when the russians started to help destabilize the country. so, the europeans, at this point, have, at least, a moral obligation to have -- help those they encouraged to move toward them help defend themselves. katherine: it seems a lot of foreign policy right now is trying to manage or prevent bad situations from getting worse. there is not a terribly clear path forward in the ukraine and whether russia will continue to escalate and up the ante, but a lot of regions around the world, in northwest africa with boko haram, and in the broader middle east, particularly with the cancer of isis, is a very tough situation for the u.s.. we have tried to harm the moderate rebels. it has been difficult to get anything up and on the ground. the cia has had a program. the pentagon is just setting there's up now. we are in an awkward situation where there not a lot we can do ourselves and we are also trying to manage a somewhat fragile

coalition. you have also had a lot of experience in the 1990's -- in kosovo, not only in making the call to intervene, and how when, and where to do so, but also in managing partners that. what lessons do you see from your kosovo experience now in the middle east? secretary cohen: well, i probably should invoke "one should be prudent, and not hesitant to i think with -- hesitant." i think we have been to hesitant in terms of how we react in certain scenarios. you mention syria -- did we try to help the rebels? i do not think so. that was a key point. if you go back to when there was resistance to assad, there were two redlines, or i should say at least one pink line and one red line, and the pink line was a sod has to go. he had lost credibility as leader of the syrian people and must go. then we sat back and did what?

we did nothing. we did not help those that were desperate to have him go, and then it continued to unravel. we talked about having safe havens. there were no safe havens. we talked about having no-fly zones. there were no no-fly zones. then came the bright red line about the usage of chemical weapons, and we dithered on that. at first, we said we were going to fire a shot across the bow of the syrians, and the military came back and said wait, we do not do that. we do not fire shots across the bow. are you talking about a military mission? tell us what the mission is, what the follow along is, and that we can talk about the use of military force. we did not do that. instead we rally the american people to say we're going to use force against assad for the use

of chemical weapons, and then senator mccain, lindsey graham and others came down on the white house because the white house said it would be a light shot, not a heavy one, and the president assured them it is going to be serious. they came out in front of the white house with the cameras and said we are with the president. 24 hours of -- after that, they changed their policy -- we are not going to use force. then it got to a debate with the president said maybe i will ask congress for authority. the president did not have to do that. he had the authority to take limited military action, but he will throw the ball to congress, and congress acted predictably as one would assume and said no thanks, and then the president said even if the congress does not give us authority the president will take action anyway. what kind of a signal are we sending to people under these circumstances? so, we look uncertain -- and uncertain trumpet that we are

blowing, and as a result president putin comes in on his white horse, no shirt on, we will bail you out from the weapons, and they did that at no cost. we lost credibility with those in the region. we lost credibility with uae with the saudi's, with the israelis -- we sent a signal to other adversaries, the russians, that we are not serious when we draw a redline. so, we are paying a penalty for that, so we have emboldened people to say we are not really going to contest you in a military or physical way. we are going to verbally challenge you. we will go for sanctions, but you do not have to worry about us, and i think that is part of the problem we have today in dealing with these particular issues. when you are looking at isis iso, or whatever we are going to call them now -- we are in information war. we are talking about a propaganda war. they, now, are putting out messages to young people who see this as pretty exciting.

they are all in black. they are wearing hoods. they are cutting heads off with their knives. this is video games for a lot of younger people. now they can join a movement. they do not know what will follow the movement, or what the institutions will be, or what their lives will be like, but it is exciting. the people that are putting out an appealing message to these young people coup --, -- young people who, number one might not have a job, might not be highly educated, but do not see a future where they could have a stake in something is very attractive to them. we have two of our game in terms of putting on information and contesting that, as well as contending the spread -- containing the spread of the

violence. it will be an information war, and a propaganda war if you want to call it more directly what it is, that we are losing in that regard. katherine: you are not the only person to say we should have been more decisive about isis. there is a lot of could have should have, what have -- what would be the right moment, but then if you look at the nato bombing campaign in libya, libya certainly is no picnic, and had recent strikes with egypt just days ago. it seems the use of air power is not so simple after all. secretary cohen: the lesson is and bob gates forewarned us this was not a country to get involved with as far as military action. that was overruled because of the british and the french insistence that we needed to help them because they were involved. the role is you have to have a clearly defined mission, and really can tell you -- you know this -- rudy can tell you -- and you know this as well as i -- a

clearly defined mission that is achievable at a certain cause in blood and treasure, and has an exit. that has to be done before you ever use military force. the notion that you go in, bomb, and take out gaddafi, what is step two? what will replace gaddafi? unless you have thought it through, you should not take action and this is where i would fault the u.s.. we have not had a thought out plan of what comes after the bombs. bullets and bombs -- that takes how people, but that does not solve a social problem, a political problem. that needs to be done through institution-building, and if you are not prepared to stay long enough to build an institution that provides for a war of law a law of will, he will fail. libya is a failed state. syria is a failed state at this

particular point. others are on the verge of it. when you get involved in the military, it always must be at the very last resort, and number two, you have to have a clearly defined mission with a follow along strategy. katherine: we have a failed state in libya following international action. we have a failed state in syria following international in action, and we have a campaign going on in iraq and syria related to isis, as well as continued, real deja vu reference to strengthen the iraqi government, how to be a more inclusive government, how to have less sectarian tensions there, but you still have this confluence to run and other areas. secretary cohen: number one, we cannot do it on our own. we still come at this point in time, are the only "superpower," in terms of military capability.

there is no peer competitor at this point, but we have learned the limitations of absolute power as such. we have to have a coalition, have to have other countries see it is in their interest to help contain the spread of violence in the region and we have to work on a coalition basis. we, i think, made a mistake. number one, i have my own judgment about going into iraq. katherine: which time? secretary cohen: pardon? katherine: which time? secretary cohen: the second time. the first time we took action, the we did not go in. nonetheless, pulling everyone out left a vacuum, and then we had a prime minister who simply wanted to engage in cleaning out the sunnis -- out of the government, out of the military.

so, they have a second chance now, a limited opportunity for a second chance to say if you want a country, and you want this to succeed, then you must be inclusive. you must allow the sunnis to play a role in your governance and your military. absent that, your country cannot survive. so, that is the lesson of iraq. whether you will have this with bodi, whether he will be true to his word and try to be more inclusive leader remains to be seen. i think at this point all we can do is try to hold back the fire that continues to burn. katherine: it seems that one of the lessons is the limitation of america's ability to do everything on their own, and then iraq we have not had the best partner, the most credible partner. it has gone in peaks and valleys. in the region we have not had the best partner. the relationship with saudi arabia, the relationship with

iran is very poor, and the relationship with turkey is more unstable than we would have expected a while ago. how do we engage, not just in a military sense, but in a more broad-spectrum way, bearing in mind the limitations we have just been speaking about purely military actions? secretary cohen: when i say engaging, i mean trying to give the rule of our chance to flourish. it does not come at the end of a bullet or a bomb. it comes with real investment in a country's future. you are not always granted the partners that you like. we have had some that have not been particularly beneficial in terms of their relationship with us, but we have to keep trying. the question is, we can try and say -- look, the middle east that is your problem.

we are coming back home. we are going to come back home and nation-build here at home. we have seen a consequence of that. the notion that you could, sort of, retreat to a continental cocoon, and watch the world on phone on msnbc, cnn, al jazeera, all of the networks -- fox -- it cannot happen. anything that happens, it will have an impact. if there continues to be a spread of this instability in the middle east, and that affect the flow of oil coming out of the persian gulf, the arabian gulf -- the answer is yes. does that have an impact on us since we are developing our own resources? well, not directly, but guess what, if the flow of oil is impacted for any length of time, the world economy is impacted, and when the world economy is impacted our ability to sell goods and services to other countries -- our economy goes down. everything is connected. everything is related. that means we have to have a global vision.

that does not mean we have to be putting our military all over the world, and that is the only solution. that means we have to have active diplomacy, active economic investment, and a very strong, capable military to back that up. unfortunately, we will face a world that will continue to be turbulent. it is going to be unsteady. it will be new institutions that have to be built, new relationships that have to be formed, new institutions in the gulf, for example -- gcc does not have an institution like nato. they never will as an institution like nato, but there has to be more of a common defense capability developed in the gulf area. we are building relationships -- we talk about the pivot to asia, and i think most people would agree that use of pivot was ill-informed, i think, because

it suggested we are shifting our focus to asia, where we had been since world war ii. what we are doing is building relationships, strengthening them with australia, a democracy -- with singapore, with the philippines, with japan, with south korea, with india -- so, we are building these relationships to say that we want to promote the rule of law, so we are investing, economically, politically, militarily. we will have to see how that works in relationship to our relations with china. china sees that effort as trying to contain them, and the truth of the matter is we cannot contain china. it is too big, too strong. it is not our goal to try and contain china, but rather to send a signal that we want china's growing military power

-- they are an economic power already -- but they're growing military power to be used for peaceful purposes, integrated into the international rule of law, not for aggressive purposes. can we make that work? we hope so, and that requires strong diplomacy. it means we have to continue to talk to the chinese. we have to work with them on multiple levels. so, i cannot tell you where the next challenge is going to be tomorrow, or 10 years from now but i do know this -- that we have to make sure that we have a strong and ready military that can respond to the full spectrum of threats, and we have to be willing to pay for it. if we are not, we are going to be relegated to a less influential role in the world, and that could have consequences for our future, and that of our kids and grandkids. so, we have choices to make. katherine: i'd like to pick up on a couple of things you talked about that.

first, internationally, and then on the domestic front. i certainly would agree with you that i do not think anyone would dispute we are living in the most global, interconnected, the digital world we have ever had and you mentioned earlier the success of isis'propaganda campaign in pulling teenagers from the u.s., libya, england, encouraging people to travel to syria. we have interconnected economic and mimetic relationships. at the same time, when the international order continues to be growing more fragile -- the norm of not integrating other states is a little more delicate than it used to be, and we are seemingly running out of ideas on how to tell russia that this violation was actually unacceptable, they are just going to pay the prices we will impose on them, and there is talk given to china in terms of a new model power relations -- that is a phrase that has been used -- but how can we really

incentivized china to play by the international norms when they see they have the might to perhaps ignore it? they have the example of russia where they are willing to pay the prices, and on the domestic front, we are not able to open international institutions like the international monetary fund to make them a little less u.s.-centric. how do we have this space for china and other rising powers like india to play a constructive role in the world order when international norms and organizations seem to be increasingly brittle? secretary cohen: i think the first order of business is to get our house in order. one other countries look at us -- i travel the world and to this day i am on the road or in the air almost all of the time. it is becoming more difficult for me to go to another country and say we want you to be like mike.

we want you to be like us. we want you to have a democracy. we want you to believe in the rule of law. we want you to have a commercial code. we wanted to have a parliament elected by your people. they say really, you want us to be like you? you cannot make a decision. you are engaging a dysfunctional system filled with sporadic embolisms. what is going on in your united states where your congress cannot even arrive at a budget and have to face a sequester which is an arbitrary, across-the-board cut -- you are using a butcher knife when you need scalpels, and you want us to be like you? it is harder. if we intend to be able model for the rest of the world, we have to get our own house in order, and that means going back to the business of trying to arrive at consensus with the

american people, and we do not have that. people on the right. we have people on the left. we do not have many leftover people in the center, and that is where most people in this country live. i like to say it is between the 40 yard lines. you do not play politics in the end zone. you can in the primaries, but not when you're trying to govern the country. we are either a country that is slightly right of center or slightly left of center at any given time in our history, so we have to come back to the center, and we are not there. it is going to be hard for us to persuade other countries to take us seriously because they are looking at our budget. the old axiom that amateurs study policy, and professionals study budgets -- other countries are professionals looking our budgets in terms of how we allocate resources, and really your military needs me to be modernized. do we see that taking place? no. do you mean to say you will

continue to have 20% extra infrastructure you are carrying -- you are 20% overweight, but you will not reduce? you have a system where pay scales are higher now than ever before, and your health care costs have gone from when you, mr. secretary cohen, was at $19 billion. how do you sustain that? we have to show this is a vibrant democracy, and we can make decisions, and then we can create a credible basis for going to the chinese to say we are still a strong military power. you do not want to challenges. or, to india, and say let us work with you. you are a major player and will be a major player on the international scene. they want to know what are we credible? the way things are going right now, we have a credibility gap. that is why i say it is political malfeasance that has

been taking place. people are so locked into their ideological spectrum, that they plan the flag in the summit of the right or the cement of the left, and they see that as a badge of honor, and they degrade the notion that copper mines has become synonymous with abject surrender. when that takes place, then will what we have is this the generality. we have sclerosis. so, i hope, in the next two years, we will see some change in that. frankly, i am skeptical. we are already now lining up saying? what will 2016 bring us? who will win the republican nomination? is hillary the best candidate? we are not talking about between now and then. a lot is happening in the world,

none of it very good for us. i hope we see some real effort eight. i talked to my friend john mccain, senator graham, and a few others, along the last of the internationalists saying it is important we had transpacific partnerships, transatlantic investment partnerships, but i do not see that taking place right now on the hill. i do not see the conversation taking place in the american people. i think what has to happen, as we debate whether we are going to actually appropriate down to the levels below what would trigger the sequester, i think the uniformed military and civilians have to come forward and speak to the american people about what is taking place because most of the american people do not see what has happened to "readiness." readiness is key. we have had wings of aircraft sitting idle with pilot not

flying because of the sequester. what does that mean? it means those pilots call to action insider -- syria, libya and every -- they are not ready to report for duty. we cannot report for duty, because we are not ready. that has been taking place, and if that continues you will see an erosion of our capability and credibility. we have to make the decisions and say here are the choices -- if you want to play a leading role, and we, for the most part, right now, are the only ones i can play this role. if you want to play a leading role in trying to shape events rather than becoming hostage to them, then this is what we must do. if we are unwilling to invest in the future, unwilling to make sacrifices now in order to achieve that, then you are consigning our kids to a future which is going to be much more turbulent, and a world in which

we will have much less influence. that message has to go out, and it has to go out constantly, because the american people do not see that, and we have actually masked that. we have the overseas contingency account. we are going to plus that up by about $50 billion. i would venture we will plus it up by even more. it is a supplemental. we will increase the supplemental because they are not under the cap. they are outside of the cap. it is the wrong way to do it. increasing the supplemental. someone discuss that as gas money. that is gas money to keep everything running, but it does not invest in the future for research, technology innovation, education -- where not procuring and investing for the future.

we are just paying for running everything as it is. it is the wrong thing to do, but i suspect we will see an increase in the supplemental, or what they call the oco account. we have to get back to fundamentals. that is what it comes down to. are we prepared to do what made us strong in the first place? what made us strong? we have rights, duties obligations we have to sacrifice in order to continue to be strong. unless we continue to do that, we will play a secondary role. katherine: let's pick up on the theme of bipartisanship. you are right on what will happen with the oco funds, the easiest get out of jail free card. the republicans are split, democrats do not see benefit to cover my thing with republicans, and obama has got a lot of flack during his first six years of his presidency for waiting for their evidence to become uncompromised, and sending him that no one has really met him

halfway, and when they had tried to meet him halfway, the more fringe parts of the party have cratered that approach. you are seeing it now in the defense budget with a debate about whether or not they will have any sequester relief. you also see that in a nondefense budget, where there is a real lack of investment in our infrastructure, investment in our education, investment in our diplomatic missions abroad and you are using ebola as a scare tactic to try to fund nih, where we should have been funding it earlier. calling for bipartisanship is easy. how do we get to bipartisanship? before you were in the pentagon you had a long industry wished career on the house and senate side. is there a path forward for bipartisanship for the sequester

and for the country, world will we be locked into this "2016 -- let's put everything on hold while we fight political battles?" how do we get from a to b? secretary cohen: i have mixed emotions. american people like to celebrate the fact that we like divided government. we have a divided structure. the house is supposed to check the senate. the senate checks the house. the white house checks the congress. the supreme court checks everybody. what i like to say is everyone is in check, but nobody is in charge. nobody is in charge. so, i have come to the conclusion, and it is not an easy one -- i would rather have one party run everything for four years, even though that is not always an appetizing thought to me, but for a variety of reasons, but say ok, you have four years. republicans, you are in charge. you have the white house, the congress -- do what you will do for the next four years and see where that takes us, or

democrats, you be in charge, but i do not see us getting to the bipartisan policies we had in the past when i first went to the senate, where you can be a statesman for four years, run for office the next two years. you are running for office every day, and the senate is no different than the house anymore he because you are out there requesting money, and money is the most corrupting thing, i think, in terms people spending time raising money for the next campaign. it never stops. so, i see a number of people that i could point to on both the democratic side and the republican side and cities are reasonable minded men and women that could come together. you have to watch the word. you cannot call it compromise. compromise has been poll tested. it is weak. it is unprincipled. it is mushy. we want people that are strong

and planted to the cement. so, we say how about searching for common ground? that is ok. finding people willing to search for common ground -- i do not see much of an effort underway as a body on the house and the senate, and i think each party will go to its base. for the next year and a half we will see more of the same. i would like to say it is not going to be the case. i hope it won't be, but i do not see any evidence that it is going to change. my hope for 2016 is that i would like to see someone in charge. i would like to have a policy that we could all get behind, or at least a majority could get behind -- to have a consensus on what our role is going to be in the world, what we have to appropriate in terms of achieving that. if it is going to be a smaller military, it has to be more capable military. if it is going to be a more capable military, we will have to be able to do less because you cannot stretch a smaller

number of people to more and more regions, more and more operations. so, we have to have a strategy backed up by a capability, and right now i am not sure what the strategy is, and i know the capability is eroding. i would like to see someone in charge. my preference would be to have the scoop jacksons of the world, the howard bakers of the world others that have been involved -- i would like to see the return of that kind of statesmanship coming to the middle saying this is the kind of policy that we need for our country to be successful when helping to make the world more stable, and if we are not the ones doing it, who will be? who do we hand it off to? are we handing it off to china? are they ready for the global responsibility?

do we want russia to set the agenda? with the europeans? i do not think so. india, at some point? not now. who is going to do it if not us? that is the mission we have to convey. i would like to see it bipartisan. i am skeptical. if not, let one party rain for four years. katherine: to offset reform, or time travel -- secretary cohen: i have always said if democrats have a good idea, let's all of that, if republicans have a good idea let's support that, but let's stop seeing each other as the enemy. it must be squashed. what is in our core interest? what is the interest of the united states as a leading force for stability throughout the world? if we are unwilling to adopt that leadership role, we say

over to you, over to who? i do not think anyone wants to point to anyone else. we have seen what russia has done controlling gas lines into the ukraine and into europe. how would you like to have them controlling the gas lines in the persian gulf? what would that mean for world stability? i have used this phrase before -- we cannot be the world's policeman, but we cannot be the prisoner of world events. somewhere between john kennedy's durational message that inspired me to get into politics -- let the world know that we will pay any price, enduring hardship oppose any foe, befriend any friend, in order to ensure the success and survival of liberty. ok. that is a time that inspired me and others to carry the american flag. we have gone from their two let's not do stupid stuff.

somewhere between let's not do stupid stuff and kennedy's inspirational message, we have to have a policy that reflects a core interest, and if we are not able to come to a consensus on that, that we will see the continued spread of instability with an inability of the part of anyone to manage it in a way that promotes the rule of law. right now, there is a great debate taking place. is it going to be -- in terms of governance, in terms of, not corporate governance -- that too, in terms of global governance -- are we going to look to the chinese model? in terms of that is how you govern a country in terms of decision-making? are we going to look to the russian, autocratic, klepto autocracy?

other countries are flirting with this. the united states does not make decisions. there is a real issue as to whether democracies can govern today. given the role of social media the fracturing of interest groups into multiple pieces, can any country, in a democracy, make decisions for the good of the whole? that is a real challenge as we look forward to the 21st century. what is going to be the role model that other countries want to aspire to? i would like to have us once again set the standard. we cannot set the standard as long as we are divided at home and divided along party lines, partisan lines, with no willingness to "find common ground," and, to me, that has to be the message. we have to find a way to build this united states of america into what has been in the past to what we wanted to be in the future.

katherine: we have talked a lot about the more turbulent and challenging areas in the world. certainly, the domestic american political picture is not rosy. i do not really see a lot of comedy coming back anytime soon. we have trouble spots in europe, the ebola crisis in africa, bill carron is increasing their scope and their range, but there are still some bright spots where it has been deep engagement with partners. we have had the negotiations about the transpacific ttp. we have had deepening relationships, not just on the defense side, but deepening economic and dramatic relationships, principally in asia. we have had a revitalization of the nato alliance. where are the moments of hope in terms of american engagement internationally? secretary cohen: let me give you an example. afghanistan.

you say well, have we invested a lot in afghanistan. i was in copenhagen 10 days ago, talking to the university there, and praising the danes for their commitment to security and their commitment to operations in afghanistan. have we made a difference? think about it. the life expectancy in just the past 15 years has gone from 42 to 62. there were 900,000 students back in 2002 -- 900,000 students, almost all male. today, there are 10 million, 40% of whom are women. teachers have gone from 29,000 to 170,000. again, many of them women. women have started 3000 businesses. there are some -- i think three members in the cabinet are women. out of 268 members of

parliament, there are some 60-odd women. so, we have made a difference in the lives of people in terms of our commitment to lifting them into the 21st century. it takes a lot of money. it takes a lot of persistence, and this is the message that we have to remember. if you are going to get involved in a country, do not think you can just go in and you can remove dictators, but you must have a plan to replace them. that is the international community's obligation. we can show there are successes that can be achieved. india is breaking through from what i would call a malaise, a word used during the carter administration. there has been a malaise in india over the last 5, 6 years. it is different today. the prime minister has made a

difference, at least for the moment, because he said we are open for business. we want to revolutionize the way we do business. we are open for business. we are open for business and want a better relationship with united dates in china and others. there are some real positive spots you can look to. i want to make sure the united states continues to be the begin, continues to have a leadership role, so we can say look at us. we think that having a chronic form of government, a capitalist economy, will reduce the most prosperity for the most people. that is the way forward in people -- digit -- in the future. we can do that if we get our house in order. katherine: let's opened up to audience questions.

we have just over 10 minutes left. if you could state your name and affiliation and in the form of a question, i beg of you. >> i am the partner director for vietnam southeast asia, and interstate company in detroit. a wonderful presentation. some questions. my question is this. given the role you envision for the military, to support the kind of engagement i think all of us in this room want, do you think we need to bring back conscription?

because nixon took away the draft. took the steam out of the antiwar movement in vietnam. now we have fewer than 1% of our population exposed to the horrors of armed combat and all that entails. do you think we need conscription? senator cohen: i think we need a program of universal service. that is something that we proposed in office. i think most militaries -- military leaders would tell you the draft is not desirable. you have people that do not want to be there, do not have the esprit de corps. it would not be that productive. but i think what is missing from our lives today is that we do not have a sense of commitment to public service. to doing something.

they could be working in a nursing home, doing anything that has a productive social use. i think we should stand up promote it, and encourage our young people to take two years of their lives and do something for the country. >> secretary, you said russia is not going to stop. anton circle -- sirkov called for removal from the order and russia. within the next week, an agreement will be signed with russia. if russia did go further into georgia, right now it is 35

kilometers, what do you see as their next move? how do you see him playing out given the fact that there is a lack of leadership at the top? senator cohen: i think melville that is a real issue as far as their future. i think the answer, as far as non-nato members, we are unlikely to contest the militarily. i think we have to send a signal to reinforce the commitment to existing nato members, mainly states in the baltics. make a statement, make it clear that if russia moves against any member of nato, there will be a response from the united states. i think the european leadership i think we have appropriated

some close to 1.7 billion in the last several years to increase training and preparation for nato members. then i would say, if russia continues to move aggressively, i think sanctions have to be much harder. i would certainly look at their banking system. i think the message has to go to the russians that, if you continue to behave in this fashion, you will pay a penalty. in the short-term, you may think that is the reputation with your people. but as oil continues to be at the levels and the fact we have sanctions against you, at some point in time, the people are going to turn against their leader. right now levels, what does russia offer its people? they built guns, missiles. sell vodka.

what is made in russia that goes around the world? basically weaponry. and oil. and to the extent oil is no longer the dominant source of revenue for russia, they are going to have real problems. let's work in the fields of science, technology, math, and say something -- build something we can be proud of. you are not doing it. i think president putin's popularity will wane over time. is your -- you're prepared to center by some of its own prosperity by insisting on deeper sanctions as we build more military capability sending a signal to the russians, do not think about crossing the lines. we meet at this time -- we mean

it this time. do not touch any of the nato countries. katherine: more questions? >> thank you very much for your talk. i'm with the danish embassy. i would like to return to the issue of arming ukrainian forces. they were recently warned against turning it into an arms race that ukraine cannot win anyway. what is your view on the? senator cohen: could we armed the ukrainians so they could defeat the russian military? no. that is not the answer. could we give them sufficient defense of equipment? share more intelligence, maybe even use uav's, which the russians are using in ukraine

to help make it more costly for the russians? with that tempt them to roll over ukraine? it might. but right now, they are rolling over them, and the ukrainians are fighting sticks and stones against heavily armored russian military. i think you could make it more costly for them and say that more russians will be placed at risk. understanding that the ukraine we can never train them fast enough or on them sufficiently to defeat the russians there. i would not be the goal. but we should set it up as saying to the russians -- and we have to find a way out of this. we do not want to turn this into another cold war. president putin is angry with what has happened to the soviet empire. he made that clear at a security conference in munich in 2007, i

believe. i was there at the time. there was a room full of people who had open arms for president clinton. for the first time -- president putin. first time he had been invited works at the. -- or accepted. he came in and gave what i would call a cold message. it blew everyone in the auditorium away. we thought he was coming to say let's work together. he said, no. the worst thing that happened is the collapse of the soviet empire. he made it clear he felt he had been mistreated or ignored. sort of the rodney dangerfield. he could not get any respect. he wanted respect. frankly, russia is entitled to respect.

it is a country with rich history, intellectual capital. the question is, how does he pull back from what he is doing without looking like he's giving into the west? how does the obama administration make some kind of arrangement with prudent -- putin that does not look like we are caving in? angela merkel is correct that we need to engage the russians in an aggressive way. we also need to couple it with a notion that you cannot run over people change geographic lines militarily and upset the world order as it has existed for the past 60 years or so. katherine: i think we need to wrap it up there. thank you very much, mr. secretary. [applause] we appreciate your thoughts and remarks on really challenging moments in our history. thank you.

[captions copyright national cable satellite corp. 2015] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org]

>> on the next washington journal, lawrence hurley looks at president obama's executive order on immigration and a recent decision by a texas court judge to block the order. more about the case with the center of immigration studies. and crystal williams of the american immigration lawyers association. washington journal is live every morning at 7:00 a.m. eastern on c-span. >> what you are about to see is you connect all these devices. 500 billion devices, where this will go. the challenge is, how do you get the right information at the

right point in time to the right device, to the right person to make the right decision? that is about architectures and transforming the business process. you're going to have to change health care, turn it on its head. education, the same thing. how countries are run is about to change. when you see industry leaders it is one thing as a ceo or government leader, you have to have instinct as to when something fundamentally changed. when you talk to the president of south korea, she is an engineer. in mexico, how do they achieve the goals of social equality? the role that this next generation of the internet, how does it transform business? you do the same thing germany, france, u.k. suddenly, they get it. these are very smart people. >> the c-span city store textbook tv -- takes books tv on the road to learn about history

and literary life. we have partnered with time warner cable for a visit to greensboro, north carolina. >> charles halpern, who had been given the task of cleaning, was making one more walk-through. in the attic, he saw an envelope with kind of a green seal on it. he walked over and noticed the date was in 1832 document. he removed a single mail from a panel in an upstairs attic and discovered a trunk and books and portraits, stuffed under the eaves. that was this treasure. we have had this story available to the public, displaying different items from time to time, but trying to include her life story to her death in 1840.

some of the items we currently have on display, a carved ivory calling card case with a card in close with dolly's signature along with her niece anna. some glass perfume bottles. and a pair of silk slippers that have tiny little ribbons that tie across the arches of her foot. the addresses are the reproductions of a peach silk slippers that have tiny littlegown that she wore early in life , and a red velvet gown, which is intriguing that it has lasted and is part of the collection. there is a legend that accompanies the stress. >> what all of the events from greensboro, saturday at noon eastern on book tv and saturday afternoon at 2:00 on american history tv on c-span3.

>> now willie downs talks about technology. the churchill club of san jose posted the event. >> welcome, everyone. i'm shonda bever -- shonda vavra , producer of a trade show in las vegas. we are just off our biggest year. 2.2 million square feet, 170 7000, so i'm sure we will be talking about that today. this is my oprah moment. we have given you all a copy of my newest book just published yesterday, digital destiny. look at the history of how we ended up. it also painted picture of the implications when everything becomes digital, becomes

connected, centralized. we see a world where that really starts to impact every experience we have. we will get into that as well. let me turn it to you. perhaps you can spend a minute and introduce yourself. >> sure. thank you. congratulations on your book. i have the privilege of reading it in manuscript. i can tell you with confidence it is going to be a success. i think it encapsulates a lot of the same kinds of technologies that i have been looking at and the research i have been doing with the institute for high performance, and that was the basis of our book last year. it is just more of the same. we can certainly talk about ces since we were there. my feet still hurt.

i think one of the big themes i want to look at is what we think of as the second-generation of disruptive innovation as a result of your -- the revolution. when i first are writing about these trends, the industry's there were really effective immediately where the obvious once, in attainment and media. -- entertainment and media. the ones using it as a core offering. what we found for big bang disruption is we are entering a new stage where other industries that were not affected or transformed the first time around our -- are. some industries happening slower or faster than others, but all the same kinds of being amazon, being napsterized.

all the things that happen the first time around are happening in industries that had little impact less on. that has created an interesting set of opportunities for incumbent businesses and startup investors. and other interested parties. those of the technologies that i think you write about so well in the books. we should talk about as many of them as we can. >> robin? >> i lead our internet and social clients around the world. one of the privileges of working at eccentra is i get to work with lots of exciting client. my history with accenture, i have been working with digital disruption for the last couple of decades.

when napster hit them, a kind of affected all of them. i did a little work in consulting with the last three generations of consuls -- consoles we know and love today. they have been interesting because unlike the smartphone, which we throw away every couple years, consoles have to last for a much longer period of time. the digital decisions you're going to make, architecting those consoles, how you watch them and how they work, is very different from a lot of consumer-electronics we see today. i have been lucky enough since 2005 to work with leading cloud providers and our global clients. that is interesting from a

capital perspective, you're making decisions that are quite often -- if you're looking at things like fiber -- up to two decades of investment in the digital future. you're trying to guess what the world is heading. some of the other areas i've worked around, mobile. if you look at the results, just amazing development in the past year around the internet of things. just bringing it for circle, i started my career with ford motor company in europe particularly around electronics. this was back in 1995, using silicon graphics. there was fiberglass you could put on and see your hand. 20 years on, it actually works.

back in the day, it did not. i think it is interesting, as we look at digital disruption we look at the pace that we see that everything is changing really fast. there are these long cycle developments around digital technology that actually underpin a lot of the change we see in the structures we see right now. we look at disruption as it is happening. a lot of the foundation that allowed it to occur are actually built over a decade or so. congratulations on the book. i have skimmed it. i have only had a day to read it, and it was fascinating. >> it is interesting. all three of us, but both of you have talk about something i thought about in the book as well. we tend to think of these eureka moments, these moments where innovation is binary. but really, it is part of a broader evolutionary path that

plays out over years or decades. i think that is definitely what we see with the trends we are talking about today. digitize asian -- digitization. televisions were one of the first to become digitized. you take something that is widely owned and start their. so we have now gone through over the last 15 years, all of the core devices we have and are starting to spill over into adjacent spaces, the second-order effect, i suppose. what does that start to look like? we can kind of paint to the end of the story, where everything is impacted. that is an easy job. what is the sequence of events? do we see from now until the end of digitization? >> one of the things we have

found in our research about transformation is that -- there is a famous quote from ernest hemingway -- how did you go bankrupt? another character says two ways -- gradually and suddenly. that is what we found the industries we looked at. you see a long period of gradual change where incumbent say, new technology is coming and may eventually affect our core customers. but it is happening in a incremental, almost predict the way. -- predictable way. then some critical mass is reached. someone finally gets the right combination of technology and business model, and they let it go, and it is facebook. then all the rules are changed. i think that is sort of the general trend we are seen. as you talk about in the book the price-performance is very

important. the technology of computing stuff is getting better all the time. it is cut having this moore's law type of effect. it becomes cost-effective to start introducing intelligence into more things. my take away from las vegas last week, i said in an article we did for forbes, if there was an overriding message, it was the theme song from the lego movie. instead of everything is awesome, it would be everything is connected. everything was connected to everything else. one of the things that struck me was the next smart thermostat. they now have a partner program that works with nest. the initial partner seemed completely bizarre. it was the car company. the lock company.

i am trying to remember some of the others. what do those have to do with the thermostat? well -- oh the dryer. your dryer is now talking to your thermostat. >> what is it telling you? >> if you get in the car and you left, if the cartels that to the thermostat, the thermostat says there is no one home. if you are not home, the dryer can be told they are not coming back. slow down the cycle. 10 minutes before they arrive, turn it back on to get a fresh cycle. when you put your key in the smart lock, it says sean just walked in the house. this is the temperature he likes. these are the kind of connections that initially seemed bizarre. but as you work through it, you realize it makes a lot of sense. these are totally different

industries. the car companies, washing machine companies google. they do not normally seem like people who would be partners or things that would go together. once you get to that incredibly low price point you just showed a sensor into everything. suddenly these connections become possible. the idea of industry, the very idea of industry, starts to fall away. and you see these very strange couplings. >> one of the things that happens in technology is we have these periods where we move from scarcity to surplus. i was think about the 1960's and 1970's when computing power was a scarcity. we used it very sparingly. universities may not have had computer access. a mainframe that people would line up for, sign up for access.

around 1984, we take that scarce resource and it becomes an abundance. 1984, apple introduces macintosh, the first computer with a graphical user interface. at that time, we would never have wasted computer power on rendering a graphical user interface because it was essentially a redundant feature. you would use a command window. xerox had tried an interface in 1981 but had not been successful. it was expensive because you are having to pay a premium for that computing power. i feel like sensors are there where it has gone from a scarcity to surplus. when we do, it creates new opportunities or marketplaces. i think about image sensors on phones. you used to only include one on the back. then we started to include a second on the side. what happens?

it changes our behavior and introduces the selfie. we can argue whether that is a good thing or that thing. >> word of the year two years ago. >> we deployed sensors on the front of that mobile device. if you are in the industry, you need to think about what are the deployment of sensors going to do to the parents that and users have? one of the things that is driving sensorization of everything is the smartphone revolution. we have a billion plus smartphone devices that has created a secondary market for all the parts that go into smartphones. if you take a commercial drone a 3-d printer, most of the things, if you take them apart what you find is that most pieces are smartphone pieces.

often, the last generation pieces you buy cheap on the secondary market because they have been made in incredible volume. you say, i can get a gyroscope a magnetometer. the chips themselves are being made at such incredible volume just for the smartphone market that has spilled over into other industries. suddenly what might have been years away from being cost effective is happening overnight. >> i would say if you look at the course of technologies, i like to think it in terms of the device level or the sensor level.

think of the network and conductivity. arguably, conductivity is not moving as fast as we are seeing with devices. then you have the clout that is just unlocking incredible creativity. i'm struck by adept technology level, -- at eight technology level, but other things, with the reason we're seeing an explosion of creativity is not only the technology but also the fact that there are open ecosystems for development. if you are a startup today, you can now conceivably go into the hardware space. you can work with a variety of different players. you can actually get into the hardware space, and you can stand on the shoulders of giants. the other thing is if you look at the smartphone, and the financial power of the user. with android and ios, that is one billion customer accounts. one billion paying customers. you can access that.

that is unique. that is something that has happened over the last year. back to your world, a continual rise in consumer electronics. what is fascinating is not only are we spending more and more in consumer electronics at the expense of other categories, but products like the tv is costing less. you kind of get headroom opening up. that kind of fueling of spend in these new categories is phenomenal. it comes to the point where you say, how many units will the apple watch be sold? there is such a huge amount of spend opening up. i totally agree.

i think we are in an amazing time of creativity in the digital space. it is almost this cambrian moment where we are seeing proliferation of so many different products as evidenced by ces. it is interesting to see which will survive, which ecosystems will survive. how will they interact -- a very good question. which services will be picking -- king makers? will it be ios or android or some new company we haven't thought of? i think this is an absolutely fascinating time. >> the standards as well. we are seeing this now on the internet. there is not yet kind of dominant standard for how these devices will share data and

interacts. there are maybe five competing. i wouldn't predict which one is going to win, but we also found in research that it is very typical that you will see a fight among different standards. until he gets worked out, it is very chaotic. most of the internet of things and solutions, most of them are kind of point solutions. this is a smart baby monitor this is a smart electric grill. smart yoga mat was my favorite. you can see the groping towards that. we know it will happen, but we don't know who is going to make the market. >> i think what we are doing is bringing -- building up the

notes--nodes of the network. if you use go ill a couple of core devices. a few years ago, it was mobile phones and tablets. we have changed the structure of the network, making the mobile phone the center of this network. it has become this hub device for all of these things. if you look at many devices that are connecting to the internet they don't have an interface. the interface is the smartphone, that is the viewfinder. 15 years ago, our digital existence was very separate for -- from our analog existence. we would actually go online. we even talked about logging online. reviewed those very distinct identities. we see that blaring with the mobile phone becoming the bridge that allows us to easily toggle between those two identities

aired their once very --. they were once very distinct. i think it is an interesting premise that social norms will start to set in and start to apply those to what we want to have digitize and what we don't want. the question now is not can we digitize it. it is not a technical question anymore. that used to be the focus. the technical solution. now it is, should we digitize it? if so, how do we connected -- 24 g or 3g? bluetooth or other communication protocol? i think that becomes the paramount question. what does that scenario look like for my experience. >> one of the positive side effects of all of this entrepreneurship is you do get

kind of 1000 flowers blooming. it is so easy now. you source the parts over the cloud, you build everything can be done virtually. you can really be in the hardware business even if you are one person. we found great examples, of people making products for fun. the risk is because there is no had to this monster,--head to this monster, the concern is privacy and security. which is no surprise. a lot of folks are going into the business of the internet of things. smart devices don't have a lot of history. they don't understand the concept. they don't think about encryption. they don't really think about what is the risk. not so much the damage, but the bad pr it causes for everyone when somebody hacks the base of

a smart baby monitor and starts talking to someone else's kid. it is so creepy. people start to set back -- step back, and say maybe there's be some central authority at four standards. clearly not the way it is happening in the united states. but, it is one of the downsides to our open-ended permission list -- permission was innovation culture. >> you mentioned the data sets being built. one of the things that we are seeing is that there is all of this data being built up by multiple different players. they are not talking to each other. google exercise has lost -- i extracted all the data i could from every digital service that i need. i went to google, facebook, to

fit bit that hearing all of these sources. the reality is when you do that, there is an unparalleled amount of information being captured. the average altitude last year was 600 and two feet. i'm struck by the data. i suppose what i'm intrigued by is all of the security threats. put that to one side. what is the opportunity of that part of being connected. where was that lead and how that data be pulled together? a nice example is in our personal memory space. in our photos and videos. if any of your like me, you have your photos stored in a variety of different places. you have your fitness data.

think about that narrative. what you did last year and where you were. some of it is done on facebook. they are doing interesting things with you -- year end review. i'm fascinated by, how does that data set get harnessed in the future? how does it draw insights and improve our lives, entertain us, inform us? i think we're in this interesting era where things are not really talking to each other. we're creating proliferation of data. but if you have to really behind -- it has yet to really be harnessed. when technology finally catches up, my 40,000 photos on the icloud or in google, interesting things will happen. >> predicting a recommendation

especially when it deviates from this historical course. there's no reason today that some of these fitness devices, couldn't also look at my calendar which is digital, and say, you are not going to hear -- hit your goal today unless you deviate from your course. looking at the photos, you could easily imagine the recommendation engines that look at where you have in or suggest, you have done a lot of beach photos. it really connect with this inner enjoyment that we have that we didn't may be fully recognized. i thought highlight the beach, but i didn't -- i thought i'd liked the beach, but i didn't know i like it that much.

one of the big things today's figuring out how much the companies tell the customers. they can't be too over-the-top with how much things they can tell you. they don't father to tell you your average altitude. they don't want to freak you out. but when that becomes a useful data source, a data bite, to inform and predict something that you might be interested in, i think that is interesting to see. >> and how you drive usefulness out of it. i have been using the tile app which you attach to your keys. it is tracking my location.

am i fully aware of it? they have all this location data for me. i am, but is also the reason why when i parked my car in a place i forgot, it was able to guide me in the rain and dark back to where my car was. i'm happy to have that trade-off. when events like that happen, it is remarkable. >> you are both talking about this use of the data for personal enlightenment. that is a collective enlightenment. i was hearing it on the radio about genetic testing, where you take a swallow saliva and they decode your dna. and they have already built up a pretty substantial database of individual dna samples. with permission of their members, they have sent data

sets to pfizer to using research on future lupus treatments and drugs. there is some ways, it is information about a lot of people, you abstracted, and we use it for something completely different than what it may have originally been collected four. -- for. but then the creepy factor. sending data to drug companies sounds awful. but then, they had permission, and it's for research. you have to make these trade-offs. you have to do a lot more as data starts to become connected or connectable. the good news is asked,--x, the bad news is y. >> one of the things i find

amazing is over the last couple of years, we have been talking about as when we will use the cloud as the golden source of data. if any of you bought a new iphone, and you had your old one, and you wiped your old iphone and connected your new iphone and all of your photos got downloaded, most people did not do it through itunes. in that one case, all of your personal data went to the cloud. and your phone became secondary to your golden copy sitting in the cloud. i think that flip from stuff

being stored locally to now the golden copy being in the cloud is something that has happened. most people don't really realize that message shift has occurred. -- massive shift has occurred. i think back to one of the earlier comments. each one of those might not seem that big, but it takes you so far. in the golden globes, richard linklater won for "boyhood" where he shot it for three days every day for the last 12 years. he made sure that in every shot they did, every shoot, each year, they included some technology of the day in the shots. you can see the advanced that occurred -- advance that occurred. he was insightful and all the things that will change of the 12 years of selling the film.

one of the things impressed upon people was the change in technology. you could feel for 12 years the technology being used in each year of the movie was remarkable. >> phones get smaller and smaller. and then bigger and bigger. >> it has changed in a very short space of time. you're much more qualified to talk about it, but that change in smartphones, we went from small smartphones and thinking that was the norm to small smartphones being weird. if you hold iphone 5, you think it is a toy. behavioral change can happen very fast. that is why i'm quite bullish on the apple watch. i think we will shift rapidly. >> i think that is the experiment taking place now.

is no longer a technological question about if, but if it is technologically meaningful. what were looking at is does the internet make sense on the wrist for a smart watch? one of these scenarios for apple is payments. so we can empower payment on the wrist. at the fundamental level, that is the question we are asking everywhere does the internet makes sense in a yoga mat? in your vehicle? that is the question we will be asking for the next 3-5 years. does data elsewhere make the internet in that yoga mat a better experience than you start

to tie those together. that to me is the ultimate test. something happens in the physical world, we digitize it connected, and that is the easy part. the real question is do we close that feedback loop and do we get something to then change back in the physical world? if it is a fitness device now digitized, the level of fitness, doesn't want me to eat differently or sleep differently? if it doesn't, that is where things really start to unwind. that is some of what will start to set in. or they say i will keep my analog whatever, yoga mat. knowing that i have payments on my wrist doesn't influence that. >> it is interesting that with technology prices collapsing, do you actually even need to make

this decision? isn't it a question of whether everything will be digital? like the yoga mat, harvey we are we going to get to the point where they are so inexpensive and maybe they can draw power from your motion. it's just going to be implicit in most products over a certain value. >> i think yes, but i think the bigger question is, does it provide a meaningful experience to the user. it doesn't really provide a meaningful use, then it really doesn't matter whether it is digital or connected. it doesn't really change what is happening. i think you see that in some states of the world. if you look at the way we greet each other. we still do that in a very analog way. digitization hasn't really

impacted that yet. just because digital can be doesn't mean it will be. >> by the secondary effects can be often on even more dramatic and important from an economic standpoint. is this valuable for me, but more importantly, as you look at the whole range of health and fitness related devices and biometrics. you start to and -- imagine a world like that. if you put all this things together and collect that information in some standardized way, it tells you bunch of stuff about yourself and changes your behavior and nutrition. i'm not even interested. i'm interested in what effect does that have on at the health care industry -- on the health care industry? we have 100 plus years of the model where there is a professional class of doctors and health care professionals,

the only ones who have that secret information and the ability to tell you your pulse and blood pressure and glucose levels. that in some ways is how the health care industry for better or worse has been structured. now suddenly, as it accidental consequence of cheap technology, you can imagine a world in which every patient has that information about themselves. they are collecting and analyzing and getting feedback. how does that affect the health care industry and its model of delivery and training? those are what i think of second order effects from an industry standpoint that can be much more devastating. largely because their unintended and -- they were unintended and unplanned, catching incumbents by surprise. >> and it is something that is

changing the dialogue. at the minimum. ultimately, i think it changes the experience that we have. we already see that taking place. if you look at the digitization of entertainment, one thing that the digitization of music that was allowing us to break apart and album easily. we saw the explosion of single track experiences. that entire music experience is fundamentally different than it was prior to digitization. >> and now it is happening with video. >> right. is happening with books. amazon has kindle singles. it fits into a smaller space. when i look at the digitization in other spaces, it has the ability to really influence the experiences we have. you don't need a steering wheel

or seats that faced forward, you can do anything you want in that vehicle that drives itself. it is a fundamentally different experience because of the building blocks. you can change everything. if you are in an experienced industry, you need to think about how that changes once it becomes connected and digitized. >> especially when it comes from left field. when it comes from people like double our smartphone manufacturers. -- google or smartphone manufactories. >> and your obviously more connected with washington, but regulation, you mentioned health and driving. as you look at all of those, regulation plays a massive part in the ability for businesses to be able to do some of the novel

use cases. had he see that playing out -- how do you see that playing out? >> some industries are affected at a different pace than others. one of the big determiners of how fast to digitization and other technologies transforming industry is the degree to which it is already protected in some ways. it's existing business model is in some ways protected by transformation by fast regulatory space. in some ways, they complain about it, but now there are protected from change. we see this publicly and how the taxicab companies are responding to things like uber and how the hotel is responding to airbnb. we have to live in is highly regulated world that may not make any sense anymore, but that is not the conversation.

we want to stop these guys from working because they don't have to play by the rules. they can deliver these things at a lower cost because they don't have regulation. and the regulation becomes the bludgeon with which to slow or change the pace of disruption, often for worse. sometimes for better, but in many cases, it can really become the negating factor, as we refer to it as the bullet time. i know you have a lot of thoughts about this as well. >> definitely. it is setting up a series of hurdles that inhibit the spread of technology. let's now open the conversation more broadly. there may or may not be

microphones around. there are two microphones. feel free to join our conversation. i think we have one comment up here. >> thank you. you guys are talking a great deal about -- in exchange going to be driven by consumer toys or by industrial applications? like water grades. >> i think it is both happening at the same time. it is a question of, where does the internet make the most sense. i think we're in it.

where we are moving into the next days of the internet. in 1995, the homepage for the internet was like yahoo! putting digital information on a single page. the metrics for success are how long people are using that page. then with the explosion of websites we moved to search engines. then a further explosion of internet properties, we start to move to something like reddit. i think like we're all living as we all from 2 billion smartphones 250 billion objects, we are moving to the next phase of the internet where we are redefining the homepage. on the enterprise side, and on the consumer side are both moving in the same direction. the fundamental question is does the internet makes sense in

water grades--grid, or locomotives, or engines. we can't that the industrial internet are -- call that the industrial internet or the the internet of everything. ultimately we will just talk it -- call it the internet. it is just the internet. i think the same thing will happen with the internet of things in 15 or 20 years. >> i think both are happening too. but there has been a fundamental shift towards consumers taking the lead. when i started looking at disrupted technology, the model we had was starting in the military application, then business, then finally to consumers. now it is the other direction. that is something that is spreading. because of social media, they can experiment and communicate about new stuff much more effectively than enterprises can. they do so.

they become the lab rats for moving the other way. >> i think just the barriers -- everyone has access to the same technology. the barriers to getting something in consumers hands and consumers using it i lower than getting into an and provides -- then getting into an enterprise. i think consumers are end-users -- or end-users, i went things are going. i think we will continue to see consumer led initially, and then-- water grid is interesting. it takes a while to see applications. i think consumer leads. the brand is consumer led.