jobs. >> the american middle class got nowhere in the decade of the 2000s. >> look at the jobs. okay? we can't afford to joke around anymore. >> the problem is larger than the proposals. >> that could mean an additional 1.9 million jobs. >> it would create 100,000 new jobs here in the united states. >> it will add 11.5 million new jobs for americans. >> 30 million jobs. that's what we truly need. it's a big number. but america is where big ideas are born. from the inventions of thomas edison to the first airplane flight of the wright brothers to the ottawa assembly line of henry ford america became the industrial giant and into the digital age with the microsofting of bill gates and the apple of his eye steve jobs. >> there it is right there. what's made america the engine that runs the world is innovation. so we begin our 30 million jobs tour from the 21st century's

cradle of innovation, silicon valley, and the show for wednesday, january 18th, starts right now. good afternoon to you. welcome to san jose, california. nice to see you. we are on top of the hotel valencia overlooking silicon valley, a true, literal cradle of innovation where problems, people, and capital, money are coming together every single day to solve problems. you know what that means. you solve a problem you create a job. in this case lots of them. this is the high tech home to companies like apple, cisco, hp, google, ebay, oracle. the list goes on. but the cradles of innovation like this are not limited to the technology sector. we can create them in health, energy, education as well. more on that a bit later in the show but for the unique

synthesis of education and investment, ideas and action, is the reason why we chose this location to start our big 30 million jobs tour. 30 million you ask? that is the number we need right now to create enough opportunity for full and complete u.s. employment. we have plenty of problems. that would seem to be plenty of jobs. to get there however will require that the pillers of industry do their part along with the cradles of innovation. david will be joining us a little later in the show to describe that to us coming up. but we now introduce you to two folks who know an awful lot about putting money, people, and ideas together to put americans to work. ted as managing partner at a world leading venture capital firm here in silicon veil eigalt has supported hundreds of entrepreneurs from amazon to google to genentech and garth

from stanford university's business school. together stanford university and the investment community in this area have created an ecosystem where ideas become profitable, job creating businesses. a pleasure to have both of you here. stanford has taken a unique point of view relative to a relationship with an investor like ted. you go out of your way to recruit people like ted and others to look at the ideas coming out of your university. why has stanford assumed that position? >> well, you're exactly right. it's because we're not just about creating the innovations but in helping our students and faculty take those ideas and take those innovations, commercializing them through an innovation chain that takes them from the university into the valley and beyond. and in order to do that, those ideas have to come under scrutiny from investors, from other entrepreneurs, and they need the support and financial capital of course to get them

launched on that journey. >> would kleiner perkins be what it is if you didn't have an educational system and a culture like that? >> silicon valley wouldn't be what it is without having stanford in its back yard. and the relationships that are forged and the realization by stanford that their teachers are not just educators but they themselves are entrepreneurs and to embrace that, to encourage them to spend the time with the venture capitalists in other, and their ph.d students and to spin companies out. it's what's made this valley come alive. >> and it's something that at least on its surface would seem to be possible for other universities to do this. in other words, it is -- there is no reason the entire uc system couldn't do this, the entire sunni system back east. the state colleges and other prestigious universities. am i naive? >> no, i don't think you are. i think it as matter of culture and approach and the kinds of approach to innovation and

support for commercialization that has become part of the lifeblood of stanford university i think is in fact rem basketball at other places. >> let's talk about the 30 million jobs number. obviously nobody has a linear plan. i can't imagine someone is going to show up and say if we do ten things we'll have 30 million jobs. why is the environment so important? why is it the focus not on the list of what we're going to do, ted, but the actual environment you're able to work in, really the determining factor? >> innovation has been one of the core drivers of the united states' economic system for decades and decades. and one of the reasons is it's driven by the desire to take risk. you have to be a risk taker. you cannot be in an environment and culture that is inherently conservative. most of what we do fails. most -- >> you're one of the best in the world. >> that's okay. it is okay to fail. it's actually applauded to fail.

we call that scar tissue. and the more scar tissue you have the better an entrepreneur you're going to be. and you have to be in a supportive environment that supports that. i'm talking about a banking environment that will lend you money knowing it's on a wing and a prayer and they may not get paid back. educational environment that wants its students to maybe even take a sabatical from school for a little bit of time to go start something out. encourage this risk taking. it is hard to just snap your fingers and just make that happen in texas or new york or seattle or wherever. it happens but in smaller pockets. >> how influential is policy? private policy and public policy to determining the appetite for risk? what you just said was if you don't have an appetite for risk you won't have a cradle of innovation. >> policy matters a lot. and there's certainly a lot of things going on in congress that

have inhibited companies from wanting to go public. that's another case of inhibiting risk taking. going public is a scary thing. well, if we put in a bunch of policy and costs that makes it harder the fewer companies we have going public the fewer jobs will be created. there is a direct correlation to that. policy matters because you want to encourage risk. if you start to close the gap between long-term capital gains let's say and income tax and make the policy, why spend a large amount of money with high risk over five to ten years if you're not incented to do so? we certainly know we are a culture of incentives as well. so washington matters. policy matters. and keeping an eye on do we still focus on encouraging innovation, encouraging risk taking versus inhibiting it is going to matter a lot. >> the critical thing there when you look at it is ultimately, garth, an appetite to have the

ruthlessness to sort through these things but also the compassion to understand that there is going to be a high failure rate but it is in those failures that lessons are learned, information is revealed, and new things emerge. i get the sense a lot in this country right now that we have an aversion to failure. we would rather be mediocre than fail. am i wrong in that perception? does policy influence that? >> policy does. and public attitude does. we're visited on a routine basis from governments in other areas that want to talk about how do you replicate this? and one of the things that i think is hardest to understand is what it takes to have a positive attitude toward risk taking and therefore the tolerance that comes or the lack of stigma from failure. failure has no stigma in the valley. there are plenty of stories of folks like ted who have had an entrepreneur fail, get up, dust himself or herself off, and then they funded them again in a second company because they're

stronger and they've learned lessons. that's counterintuitive in a lot of other parts of the world. >> so describe that a little bit. what is it about -- obviously you're a business. you want ultimately to get enough returns from your investments so you can continue to invest. how is it that you reconcile a willingness to indulge the failures, and invest with them again? >> if venture capitalists made money on every investment it means they're not pushing the envelope and taking enough risk. you are looking for entrepreneurs that are look forgue something disruptive in the market place that no one has ever tried before. by definition no one has ever done it before. how can it all work? it can't possibly all work. a lot of it fails. and that's okay. what you're looking for is that spark, the inner desire, the mission inside these entrepreneurs that they're willing to walk through the walls to try as hard as they possibly can to see if they can make it work. and, you know what? rarely do these businesses just

kind of go up and to the right. it's not usually a straight line. usually a journey. how you navigate that journey will determine whether you'll end up with a successful company in the end. they're not all huge or googles. they're not all facebooks but that's okay. they can generate jobs. >> yeah. >> and you learn no matter what. regardless of the outcome there is an author i've been enjoying right now who we've had on the show and his whole premise is how matters. it's how not how much. i'd love to hear just a little bit more from you garth on just the importance of how and how it's actually the answer not just the question but the way you work together, how you work together is also the answer. >> i think often the greatest learning actually comes from the failures. i think when you're successful, maybe you don't think as hard about the how. you don't think as hard about what is it that connected the dots that made you successful. when you fail, you'll think hard about it for a long time. because you have the scars from that. so one of the reasons that we

invite the entrepreneurship community and the venture community in to stanford all the time is that they have more of that patent recognition. they have more data on which they can connect the dots that will help an aspiring entrepreneur and give him the confidence. sometimes the entrepreneur will say i want to go the modest route as opposed to go for the home run. and somebody who has seen a lot of cases will give them the confidence to really take that step. >> something else i want to stress about stanford if i may. >> please. >> that they do better than any university in the entire country which is around what we call the technology transfer which was an invention takes place inside of the stanford labs. they use technology transfer meaning to put it into a startup company to be financed and create something new as a strategic weapon versus as purely a money making venture or as a negative. hey, that technology is leaving our university. many other universities just

hold on to it and they make it hard. stanford's case, they make it actually easy. let's get that and see if we can get it applied. let's see if we can make a company out of it. if so the world will be a better place. that is a different viewpoint than any place i've ever seen. >> i think that is exactly right. much more frequently and effectively the idea leaves the university with a person. so often it is the student who had the idea in the lab, maybe even the faculty member whose lab it was in. and helping those people who have the idea and therefore know more about the innovation and more about the technology than anybody else on the planet. giving them the resources and the assistance to take that into a new innovation. >> wonderful. and it really speaks to a confidence that there is an expectation and a certainty that more new ideas will continue to come along than it is that ideas are not, there is not just one idea. there is a constant flow we all live in our own brains and know

that. wonderful conversations. thank you both for your time today. again, thank you so much. thank you for teaching us today. >> thank for having us. >> coming up on our first 30 million jobs tour road show. which policies are proven job creators in cradles like this or in pillars of industry? and which simply sound good on the stump? we'll separate fact from fiction coming up. plus, where's the holdup in all this? a high ranking insider's view of the politics preventing the kind of job creation america desperately needs. we're one-on-one with california's lieutenant governor gavin newsom and just what does a cradle of innovation look like anyway? we'll help you with our talented graphics department. they've mapped it out for you. and it's all ahead of course on the "30 million jobs tour" getting under way live from silicon valley right here in sunny california. [ male announcer ] how do you get your bounce?

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we're back in silicon valley the birth place of giants like google which is just one of a large group of websites that today has joined a virtual strike with some even blacking out their sites all together. like wikipedi nachlt protest against legislation pending in our congress billed as a way to protect content from piracy but opponents argue that the very bill could lead to a government

controlled internet in this country. we want to bring in our west coast megapanel with us at silicon valley. down in los angeles matt miller. i'll begin with you here. your thoughts on where this debate is going. certainly the strike has caught a lot of people's attention. >> how we manage to do our jobs i don't know. it's only fair. however, i think if national laws can't work you need an international solution. what is very interesting is say you look at say sweden, they've been counteracting it with adapting a digital age so fundamental tally is not going to come down to lawmakers but technologies catching up with pirates. >> the concern was their ability to gatekeep who can see what is what really has everybody up in arms. >> the congress cannot make this

decision. this is another example of our congress being quite dysfunctional. they were handed a piece ofr th. the motionturessociation and chris dodd tir old friend, ey said hey. let's go with this. what happens is all of a sudden they see this doesn't work. it actually creates more problems, potentially more problems than signing the law. so now you have this huge reaction which is awesome to watch in a way. again, i have no idea what i'm doing and the students and teachers around in the united states have no idea how to answer any questions today but it is a very blunt measure by wikipedia but it is actually quite a precisely good way to do this. you're saying you sign a law that is going to have blunt and stupid consequences. don't do it. let's figure it out in some more rational manner. >> matt, you get the last word. >> there is a lot of theft on this property. there as lot of concern. the bill as first structured is kind of over reaching and raises

legitimate concerns from the web guys and somehow these two industries are going to have to figure out a way to address legitimate concerns without the kind of over reaching that makes the private guys, these enforcers of everything. >> an amazing way, i really think the blackout certainly highlights the conversation. and in a meaningful way. basically their message being the risk would be this. we wouldn't have the power. it wouldn't be wikipedia's decision but the government's. >> there is a legitimate concern. >> huge. of course. >> absolutely. >> it needs to be solved. >> speaking of things that need to be solved the house of representatives needs to be solved. voting down the latest debt increase, symbolic vote mind you setting up another fight over a move that's been made some 74 times. we've done this ten times in the past decade and it has become the favored political prop in recent debate. however, this congress as we all know has moved in over all fits and starts haggling over every inch of the most rudimentary

decisions proving itself to be remarkably not just dysfunctional, maybe nonfunctional. you can see it in their approval ratings. it has also taken the toll on the job market and investment in this country. a team of economists from the university of chicago and out here at stanford using their own index looking at the economic uncertainty and mentions thereof and whole stack of things say that the shenanigans in congress by their measure have cost america 2.5 million jobs. again, what the numbers are and what -- whether that's right or not obviously can be debated but it provokes an interesting conversation which goes to economic uncertainty. rob, and the need, you can't have a pillar of industry or innovation if you don't have a culture of investment. >> and if you have uncertainty about the rules which is essentially what happens when congress is divided and doesn't get things done. you hear business confidence, employer confidence. markets aren't confident. you can't make longer-term decisions if you don't know what the rules will be and that is a

problem with gridlock. there is of course the other element. i mean, which is they won't pass a lot of dumb bills. but i think that's a sort of a smaller issue when people just have no confidence. >> yeah. >> that their rulers are going to let them go about their business. >> economies need certainty. unfortunately the two largest economies in the world the european union which all together makes up the largest economy in the world and obviously america complete political uncertainty at the moment. with the european union you have 27 countries and leaders trying to make a decision and therefore they've always been behind the crisis curve as it were or the leaders and the euro and obviously here as well. fundamentally, 2012 is going to be very, very tough year and goodness knows what we'll see by the end of it. >> as i've been saying, as we sort of travel around, matt, that there are 311 million of us and 545 of them. so you got to figure the odds are with us. and i just wonder how hot the kitchen has to get before we actually do see a move toward

solution seeking to simply drive investment. forget who is in power. you cannot have job creation let alone 30 million jobs in industry and in the cradles like the one we're sitting in now if you don't have that culture of investment. how determining is the government's functionality to get what we need right now? >> it is huge. don't expect there to be functionality any time before the fall election. i mean, what's happening now, this debt vote, it's a huge charade where it was agreed to as part of the deal the last time they reached the crisis where the republicans would get a chance to formally vote their disapproval so they could tell voters back home they disapprove, adding to the debt, but the budgets they passed adding 5 or 6 trillion to the national debt in the next decade anyway so it is just a debate about how much debt we're adding not that one side wants to and the other side doesn't. it is another total dance and

people shouldn't expect anything different at least until the dust clears in the election. >> and meanwhile we're stuck in a conversation around debt as oppose today around things like bank trade or tax reform which could drive investment which creates value. it is a bizarre time. thank you so much for making the trip out. matt, nice to see you. i hope you two enjoy the -- this is a pretty nice hotel. pretty good. we should stay a little longer. up next, proof that cradles of innovation like the one behind us right here in silicon valley are not just reserved for the tech sector. my mother froze everything. i was 18 years old before i had my first fresh bun. the invention that i came up with is the hot dog ez bun steamer. steam is the key to a great hot dog.

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well we chose silicon valley as the first stop on our 30 million jobs tour for the simple reason it is one of our nation's biggest cradles of innovation, problem solvers, and job creators not to mention it's still growing. the valley's information, communication, and technology firms, they call it ict around here for short is expected to grow 15% during the next two years. and that does mean jobs and money. 60% of the ict firms in this area of the country plan to keep hiring through the summer of 2012 despite the dysfunction in the american economy. they invest in education and entrepreneurs here. those are high quality, high paying jobs at that. the average salary, look at that. $182,000. as we talked about with our guests at the beginning of the show, silicon valley's success is not limited to here. it is replicable across the country. >> our country is full of cradles of innovation. silicon valley is only one

example. no matter where you look barriers are keeping these cradles from flourishing. just look at our energy, health, and education sectors. we're in desperate need of energy efficiency. where do we stand now? twle comes to stationary power generation efficiency at 34%. we need a health industry that develops health not just treats sickness. and we need an education system that encourages experimentation and skill mastery because that's the proven way we learn best. these are the problems to be solved. and that means job opportunities. there are plenty of seeds in these cradles or people looking for work. we are on a 30 million jobs tour, remember. but the cradles that will foster those seeds and create those jobs are bone dry. there are desert landscapes desperate to be irrigated by a flow of capital. remember, capital isn't just the central banks and governments. it's private businesses,

personal accounts, and most importantly, all of human potential. the river exists. it's massive. some might say even infinite. it's surging with potential if only we release it. and reforming the policy gates of taxes, trade, and banking that control the river of capital is the beginning. despite this lack of capital, there are oasis in the desert showing us what's possible. just look at dr. jeffrey brenner in camden, new jersey. the khan academy in san francisco and mayo clinic in minnesota. there's plenty of sun for these cradles which is the attention of a market place ready to foster growth. this river and its vital flow of capital is being held back by three major barriers. man made levies of bank, tax, and trade policy auctioned off by our bought election system. we and our greedy bastards behavior are creating these gates. in the process we're holding

back the flow of capital by incentivizing credit speculation, job out sourcing, and corrupt pricing of almost every major u.s. service. we auction tax benefits and subsidies through the money in the political system to ensure that. but we can fix this. we can remove those barriers and let the flow of capital irrigate the desert cradles. it's not a mirage. by using our values of shared visibility, integrity, and choice we can achieve aligned interests and demand real, capris he comprehensive trade and tax reform and we'll unleash these cradles of innovation and yield solutions to our problems while building millions of jobs for america. like this desert our country is thirsing for innovation because every seed it sprouts is a job. it's the reason why we are on a

30 million jobs tour. >> just a preview of what's to come. we talk about the integrity and choice and how it can align our interests to solve health care and education and energy in our new book "greedy bastards" which is now into its second printing after just a week on the shelves. thank you so much for your engagement with us as we all try to align with one another to solve this country's problems. we did have a wonderful time last night down in pasadena, california in conversation about the book with the folks in southern california. tonight we'll be up here in san francisco, the commonwealth club hosting us and we are grateful for that opportunity and don't forget of course our latest blog on cradles of innovation is currently posted right now on the front page of the huffington post and on our own website at dylan ratigan.com. next up, from tax cuts to

the wealthy, to government spending and infrastructure investment, what actually has a track record of driving the necessary investment to create 30 million jobs in america? we're setting the record straight right after this. copd makes it hard to breathe,

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could help improve your lung function. get your first full prescription free and save on refills at advaircopd.com. the best approach to food is to keep it whole for better nutrition. that's what they do with great grains cereal. they steam and bake the actual whole grain while the other guy's flake is more processed. mmm. great grains. the whole whole grain cereal. well we're back with a go l gorgeous view of silicon valley and a beautiful part of our wonderful nation. one reason why silicon valley has been able to keep creating jobs while the rest of the country has been hemorrhaging them is because the valley is always changing. it's always adapting. it is always encouraging a culture of investment into its need to change. it started of course as fruit

orchards and then to defense contractors and then obviously chip makers with the mining of silicon itself. today we focused on all sorts of innovations from the latest things in information arrangement in software to biotech, energy efficiency, social networking and the i.t. business as we talked about. clearly, there are lessons for us all to learn when it comes to sustain meaningful job creation in a culture and ecosystem that does it. we need not kid ourselves. we need 30 million jobs which means we need major pillars of american industry to get the support and investment that they need from manufacturing to bolster this economy. here with us to talk more broadly about what does work and what's just popular political rhetoric is david rothkopf, former deputy under secretary of commerce for international trade policy during the clinton administration and his new book "power, inc." will be released

next month. nice to have you out here good to be here. >> walk us through what you would say and have the evidence to back it up i might ad. ro are proven policies that can drive investment in america into the real pillars of american industry? >> you see them all around here. infrastructure is number one. first of all if you build a road or bridge you create a job but you also create an environment that draws in investments so it has a long-term benefit. you can't build a factory that connects to nothing. right? so you need it in the infrastructure. you need the innovation. you got stanford here. you've got lawrence livermore laboratories nearby. lawrence livermore, that's a government institution. they create things and then they spin them off. you have to have the right regulatory environment. here in san jose they've sped up the approval process for a small business. you can come in. all the approvals in one day, turn around, and get them out.

that works. that's another thing. clear tax code. predictability. businesses like predictability. so if you do a short-term subsidy, it doesn't work. the ceo looks at that and says that's going to go away in two years. i can't make an investment based on that. there are a bunch of things we do do that we ought not to do. >> let's talk about that a little bit. you have just mentioned tax subsidies. i'd like to hear more. that's a popular thing. you hire a lobbyist. you go. you make -- you advocate for a tax cut of some kind or you advocate for a tax subsidy of some kind. the tax code may be the most manipulated capital vehicle we have in our government through the process of the current lobbying apparatus. >> if you can game the system, then you can make the tax subsidy work. if you're big oil and you can go in and you can pave for the lobbyists and keep them in place for a long time they actually do attract some kind of investment. but the problem is particularly when you're dealing with small business where a lot of the jobs are created it doesn't work that way. what we saw for example in the

beginning of this administration, a lot of talk about green jobs. a lot of short-term subsidies. and they're never going to happen again. and so a lot of people made investments and now they've pulled back from them and they have to re-examine. it's a bit of a balancing act and it rewards big players with big money and it penalizes the little guy. >> what about the idea of just cutting taxes in general? if we just reduce taxes that we would have more investment and we would have more prosperity? >> well, if you reduce some taxes you reduce corporate income taxes, you may attract more people to be here. but this notion somehow that we're going to reduce all taxes and that's going to go straight back to the people, we know that doesn't work. we have the bush tax cuts followed by ten years of job losses, declining median incomes, and the beginning of an economic crisis of the sort the united states hasn't seen since the great depression. >> let's talk about some of the other things you say really do work especially with the multiplier. we went over the incredible

benefit from infrastructure. also you say loans and loan guarantees. walk us through that. >> there's leverage. if you -- the xm bank goes and loans money to companies so they can export, create jobs by tapping into other markets. they get paid back and get to do it again. an infrastructure bank is the same kind of thing where if we created a bank that lent money and could leverage money to people to build a bridge or build a highway, well, that would create the jobs now, the money would get paid back. we'd get to do it again. that kind of thing is very beneficial. >> what about research and development tax credits to encourage the sort of upstream things that happened in our universities and laboratories? >> look over the wall. look around here. you know, that's where it's happening. research and development, whether it was at xerox park or bell telephone laboratories where you create the transistor and electronics revolution and lead the way, that is really

terrific. there are new elements now because we're sort of going from an industrial economy into what i would call a super value added economy where materials, se science, and the key factor is intellectual property protection. you also have to have laws and systems of redress that work and if you can protect your idea better in silicon valley than you can somewhere outside of shanghai, where are you going to build the factory? >> so where -- how would you reconcile what we're talking about with the current political debate? >> the current political debate is nonsense. these people are having a food fight on the stage. they're just trying to take each other out. you go to washington and say what is the conventional wisdom? come back in 2013. you know, in the midst of a crisis when we need 30 million jobs so, you know, it is a good thing you're having the debate here. it's not going on where it should be. >> the other thing and i don't

want to be naive, this is a wonderful place and we need as many cradles as we can possibly get but if we do not have substantive development in what i call the pillars of american industry, in manufacturing, in energy, walk me through what you would identify as the pillars. >> well, look at energy. i mean, we've got to transform our energy grid. we can move forward to smart grids. we've got coal plants that have to be replaced by gas plants or have to be replaced by nuclear. right now we can't get there. it costs twice as much to build the nuclear plant in the u.s. as in europe because it takes twice as long to get the approvals. it's not a question of safety. it's a question of, you know, bureaucratic underbrush that's got to be cut through by somebody wanting to invest here. we can clear that away, speed up the building, create the jobs now. >> and then how much do things we talk about tax policy, but how much are things like trade policy particularly with china affect the flow of capital between our nation, either into it or away from it? >> well first of all if they get

to play by a different set of rules, if they get to cheat, extort intellectual property away from people, if they get to subsidize their companies in a way that makes them more competitive than ours, and we don't call them on it, then we're going to lose. you know, every other country in the world has a kind of national industrial policy based on the idea of creating jobs. we here have a kind of allergy to it for ideological reasons and we're getting our lunch eaten by somebody else. >> it's a real pleasure. i hope you'll work with us throughout this winter. >> i'd love to. >> david rothkopf, spend some time learning more about these guys. they do a heck of a lot of wonderful research and i certainly have learned plenty from them and suspect you might be able to as well. if you take a break here. if we know what we do to create jobs why rn we doing it? why is it a food fight? after this we'll talk about the politics of the unemployment crisis and what the government can do to help with california's

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we just discussed the policies necessary to create the cascade of investment not only to cradles like this but to the

pillars of industry in this country so that we can create the ecosystems in these systems in general to create the 30 million jobs our country is crying out for. but our next guest is here to give us an insider's view on the obstacles that these ideas and these policies run into when they head to our state legislatures and of course our government on the federal level, the biggest obstacle, washington, d.c. and with us now the lieutenant governor of california and former san francisco mayor, two times i might add, gavin newsom. it's a pleasure to see you. >> great to be here. glad you're out here. >> nice to be here. listen, we consider your talk on this until we're blue in the face and why we had the head of the stanford graduate school of business and some of the investors from kleiner perkins and david rothkopf and why is it these types of things seem to either never come up or when they do they go away quickly? let's start on the california culture and move east.

>> you brought up the book. he talks about situational values versus sustainable values. we are so focused on the situation. perfect example in california budget crisis. in every single year in the last decade we've been focused exclusively on the budget which has crowded out the issue of investments, jobs, investing in tomorrow, investing in the future. from my perspective it's all about the situation. it's about who is to blame. because the incentives are all wrong. you'll get away with actually focusing more eloquently on who is to blame than what to do. you'll actually be rewarded by being re-elected. you are part of the tribe within your particular parties. as long as it is someone else's fault you abdicate responsibility and actually move forward. that's fundamentally i think the challenge. >> and let's go a little deeper with that. because basically what you're saying is the incentive to accumulate or retain political power is directly in opposition to the necessary how to go back to dove to do this. is that fair? >> i think it's perfectly fair.

you'll see that in the number of people re-elected. even in the extraordinary elections last the last congressional election the number of people re-elected was extraordinary. in california where we've had districts gerrymandered over the years and parties that have dominated there is really no incentive whatsoever. if you care about your career and you're selfish in the context of your own fate and future and what you believe if you get to the next level you can do as a conscious move that's the problem. >> so how could -- as i've been saying to people, there are 311 million of us. there are 545 of them. i like our odds. >> yeah. >> what can we do to help -- what can we do to help the political -- it's easy to -- moral outrage is easy. i've made a living for a couple years. it's terrible. >> yeah. we have to move to resolution. >> you talk a lot about this in your book. and in california we've actually followed some of your examples and leads moving toward an open primary. we're focusing now on a redistricting process just put

into place. it was independently drawn not by parties. we'll see if that has some impact. but the issue of money is still dominant. the issue of money is corrosive on both sides of the political aisle. not just the super pacs but those things done in open that are equally corrosive. it's how we change and change our expectations of those in elected office i don't see things dramatically changing unless we have more of the conversations you're having today and that is again what works and how can we scale good ideas? we know if we don't like the world standing up we have to stand on our head and we see the world much better with much more clarity when we go local. you see those examples here in silicon valley, southern california. we have remarkable prosperity despite the fact we're in a state that is the second highest unemployment in america. >> the key to that is you can cry out for the national program but that is going to be a while. it's the -- i feel like 2012 is the year of the municipal engagement. >> look. i like to say states are laboratories of democracy but cities are laboratories of

innovation. the innovation is coming from a local level. it's regions rising together. it's clusters like you have out here in silicon valley. there is a secret sauce. it's research and development, infrastructure, education. it's the ability to translate those ideas, all that research into commercializing those ideas. it's where ideas can be tested. the notion of risk taking and entrepreneurism you talked about at the top of the hour. >> it also feels like people are more empowered when they engage in a municipal level. >> no doubt. they feel like they have more impact where money is still dominant but not as dominant as the federal and state level. the conversations we have there are dull and stale. anathema to our state and local lives. you have to count on governments and regions collaborating more effectively. not just public/private partnerships but public/public partnerships. >> speak to why it is that spending your time engaging municipally is a good road to building a more prosperous state or more prosperous nation. >> if you care about your

community, you care about your life, you've got to be expressive in terms of your voice and share it. the great opportunity for us toss reconcile. you talked about it with your hot spot and ex-am pls. the tools of technology not just a way to get elected and amplify voice buss to keep the voices amplified after we're in office to govern more effectively. bottom line is people are more engaged civically than they've ever been. a whole new generation of folks are more empathetic and want to be involved but they're doing it through social networks for kiva and through donors choose and other mechanisms. we've got to find a way to create a framework of engagement through government, particularly municipal government and creating framework where people's lives can be improved and they feel truly empowered. i really believe strongly the tools of technology will provide that q and answer. >> i couldn't agree now. how not how much. a real delay. thank you. thanks for coming out. >> my pleasure. a 30 million jobs tour just getting started. if you might have heard. when we come back, we'll give

awe sneak peek of what we've got planned next. more from our great location atop the hotel valencia here in san jose, california right after the break. [ kate ] many women may not be properly absorbing the calcium they take because they don't take it with food. switch to citracal maximum plus d. it's the only calcium supplement that can be taken with or without food. that's why my doctor recommends citracal maximum. it's all about absorption.

welcome back to our perch above the cradle of innovation that is silicon valley. what an hour we've had launching this thing discussing how we can create new cradles of innovation to cultivate solutions in health, education, and energy spelled out by folks who make things happen. >> it is a matter of culture and approach and the kinds of approach to innovation and support for commercialization

that has become part of the lifeblood of stanford university i think is in fact replicable in other places. >> innovation has been one of the core drivers of the united states' economic system for decades and decades. and one of the reasons that it's driven by the desire to take risk. >> if you can game the system, then you can make a tax subsidy work. if you're big oil and you can go in and pay for the lobbyists and keep them in place for a long time they do attract some kind of investment. the problem is particularly when dealing with small business war lot of jobs are created it doesn't work that way. >> well, this of course day one of what will be a winter long, 30 million jobs tour. it is truly just the beginning. and i hope you'll join us tomorrow for day two as we take you inside a successful start up here in the valley. we'll see exactly how peope,