May 6, 2014 - Peter Schuck

  • 05/06/2014

Samantha Bee defends the real victims of the financial crisis, lesbians face discrimination during major life events, and Peter Schuck describes effective public policy.

[CHEERS AND APPLAUSE]>> Jon: WELCOME.

[CHEERS AND APPLAUSE]WELCOME TO "THE DAILY SHOW."

MY NAME IS JON STEWART.

WE GOT A GOOD ONE FOR YOUTONIGHT.

GUEST TONIGHT PETER SCHUCK.

HE IS THE AUTHOR OF "WHYGOVERNMENT FAILS SO OFTEN AND

WHAT WE CAN DO ABOUT IT."

BUT FIRST, AS WE ALL KNOW EVERSINCE THEY VERY INNOCENTLY

CRASHED OUR ENTIRE ECONOMYTHROUGH PURPOSEFUL AND

FRAUDULENT ACTIVITIES --[LAUGHTER]

-- BANKS AND THE BANKERS WHOBANK THEM --

[LAUGHTER]-- HAVE WEATHERED ATTACKS FROM

ALL CORNERS.

>> THE GOVERNMENT IS WAGING WARON BANKS.

>> THEY SAY THAT WALL STREET ISGUILTY THAT YOUR FORTUNES ARE

WHERE THEY ARE NOW BECAUSE OFTHE GREED ON WALL STREET.

>> PEOPLE WANT TO SEEGUYS IN A PERP WALK, THEY WANT

TO SEE BANKERS IN HANDCUFFSGOING TO PRISON.

>> Jon: IT'S AS THOUGH SEEINGTHEM PUNISHED APPROPRIATELY

WOULD BE SOMEHOW JUST OR RIGHT.

[ LAUGHTER ]WELL, GUESS WHAT?

THE VAMPIRES FINALLY GOT THEIRBLOOD.

>> HIS NAME IS KAREEM SERAGELDINAND HIS TRADERS LIED ABOUT THE

VALUE OF HIS MORTGAGE BACKEDSECURITIES AND HE KNEW ABOUT

THAT AND HE SORT OF LOOKED THEOTHER WAY, AND SO HE WAS GUILTY.

>> Jon: HUH.

LYING ABOUT THE VALUE OFMORTGAGE-BACKED SECURITIES AND

LOOKING THE OTHER WAY I THINKWAS THE SLOGAN FOR ONE OF THOSE

COMPANIES, WASN'T IT?

WHY IS HE THE ONLY PERSON TOHAVE GONE TO JAIL FOR THAT

ACTIVITY?

>> HE PLED GUILTY AND HE IS NOWIN PRISON.

>> Jon: OH, HE WANT TO JAILFOR STUPIDITY.

DOESN'T HE KNOW, PLEADING GUILTYIS NOT HOW YOU ADDRESS THOSE

VERY COMMON CHARGES.

>> JP MORGAN IS PAYING $410MILLION TO SETTLE CHARGES WITH

THE GOVERNMENT BUT JP MORGAN ISNOT ADMITTING ANY WRONGDOING.

>> GOLDMAN SACHS SETTLEDEARLY ON IN THIS CASE FOR

$550 MILLION WITHOUTADMITTING WRONGDOING.

>> UBS HAS AGREED TO PAY ABOUT$50 MILLION.

UNDER THE TERMS OF SETTLEMENTUBS DID NOT ADMIT ANY

WRONGDOING.

>> Jon: THAT'S HOW WE DO.

[LAUGHTER]YOU SAY WHEN YOU ARE CAUGHT,

WHILE I CLEARLY HAVE DONENOTHING WRONG, I KNOW YOU ARE A

BUSY MAN AND YOUR TIME ISVALUABLE SO HERE IS A LITTLE

SOMETHING FOR YOUR TROUBLES, YOUKNOW WHAT I MEAN?

GET THE GOVERNMENT'S WIFESOMETHING NICE, MAYBE A TENNIS

BRACELET.

HEY, GABBAGOUL.

[ LAUGHTER ]BUT AS WALL STREET SUFFERS, THE

REAL PERPETRATORS OF FINANCIALDISTRICT WRONGDOING CONTINUE TO

PAY NO PRICE.

I'M TALKING ABOUT OCCUPY WALLSTREET.

I'M SORRY.

I'M SORRY.

MIC CHECK.

I'M TALKING.

I'M TALKING.

ABOUT OCCUPY -- ABOUT OCCUPY,WALL STREET, WALL STREET.

[ LAUGHTER ]REALLY YOU ARE GOING TO

(bleep) DO THAT, REALLY?

THEY REALLY DID BECOME THEPEOPLES MICROPHONE. YOU KNOW,

THESE OCCUPY WALL STREETERSAFTER VICTIMIZING WALL STREET

JOB CREATORS BY DRUMMING INTHEIR GENERAL VICINITY, BY

WAGGLING THEIR FINGERS IN ATHREATENING MANNER OR BY RUDELY

CORNERING THE PEPPER SPRAYMARKET WITH THEIR FACES.

THE OCCUPIERS HAVE GOTTEN OFFSCOTT FREE.

EXCEPT FOR, OBVIOUSLY, THE MASSARRESTS AND PREVIOUSLY MENTIONED

PEPPER SPRAY.

MY POINT IS NOT ONE OCCUPIER HASBEEN SENTENCED TO LONG-TERM

PRISON TIME.

THAT'S RIGHT.

IT'S STILL --[LAUGHTER]

-- WALL STREET.

ONE GUY IN JAIL.

OCCUPY --[LAUGHTER]

-- UNTIL YESTERDAY.

>> AN OCCUPY WALL STREETACTIVIST WHOSE ARREST WENT

VIRAL, CECILY MCMILLAN, FACINGUP TO SEVEN YEARS IN PRISON.

>> Jon: WOO!

AN OCCUPIER HAS FINALLY BEENSENT TO JAIL.

THE ARC OF THE MORAL UNIVERSE ISLONG.

BUT IT BENDS TO MOTHER (bleep)JUSTICE.

[LAUGHTER]THAT'S RIGHT.

IT'S -- IT'S 1-1.

WHAT CRIME DID THIS OCCUPYPROTESTER COMMIT?

I BET THEY SERVED GLUTEN AT THEGLUTEN FREE TABLE OR SHELVED

CHOMSKEY BEFORE ZINN IN THE FREELIBRARY. EVERYBODY KNOWS C COMES

AFTER Z BECAUSE ALPHABETICALORDER IS A SYSTEM

OF HETERO-PATRIARCH NORMATIVITY-- I'M BEING TOLD

THAT MY MAN-SPLAINING FAILED TOCHECK MY PRIVILEGE.

I BET IT WAS SOMETHING LIKETHAT.

>> SHE WAS FOUND GUILTY OFASSAULTING A POLICE OFFICER

BACK IN 2012 AND IT WASALL CAUGHT ON VIDEO.

>> Jon: OKAY, YEAH YOU CAN'TDO THAT. THEY'LL DEFINITELY

ARREST YOU FOR THAT. AND BY THEWAY, DON'T THINK THAT THE POLICE

DIDN'T ALSO GET IN TROUBLE WHENTHEY ASSAULTED PROTESTERS, TOO.

REMEMBER THIS GUY, THE NYPDOFFICER ANTHONY BOLOGNA

AKA TONY BALONEY WHOPEPPERED PROTESTERS WITH

ENTHUSIASM RARELY SEEN OUTSIDEOF CHIPOTLE.

HE WAS PUNISHED, TOO.

HE LOST SOME VACATION DAYS ANDGOT REASSIGNED TO STATEN ISLAND,

WHERE HE IS FROM.

[ LAUGHTER ]SO NOT SO MUCH A SENTENCE AS

BEING RELEASED BACK INTO TO HISNATURAL HABITAT.

SORT OF LIKE THE END OF FREEWILLY.

YOU KNOW, FOR A GUYLIKE TONY BALONEY, I MEAN,

HE COULDN'T BE MORE ATHOME IN STATEN ISLAND UNLESS

HIS NAME WAS JIMMY PEPPERONIHEY, I'M WALKING OVER HERE.

FOR MORE WE'RE JOINED BY SENIORFVU CORRESPONDENT SAM BEE.

SHE'S ON WALL STREETRIGHT NOW. SAM, THANKS

FOR JOINING US. SAM,

>> YEAH, YES JON.

>> Jon: FIRST OF ALL, I'VE NEVERSEEN THE ACRONYM BEFORE. FVU.

I WORK HERE; I'M NOT SURE WHATTHAT IS.

>> IT'S THE FINANCIAL VICTIMSUNIT, JON.

[LAUGHTER]>> Jon: THAT WAS WEIRD, WHAT

THE HELL WAS THAT?

>> THAT WAS MY DRAMATIC STING.HEY, LISTEN, JON,

I'M DOWN HERE ON WALL STREETWHERE EVERYONE IS BREATHING A

SIGH OF RELIEF NOW THAT CECILYMCMILLAN AKA THE MENACE IS

FINALLY OFF THE STREETS.

>> Jon: WELL, THIS MUST HAVEBEEN A VERY DIFFICULT TIME FORTHE

WALL STREETERS TO KNOWTHAT SHE WAS OUT THERE

AND CAPABLE OF LETTING THEM KNOWFROM ACROSS THE STREET

HOW MUCH SHEDISAPPROVED OF THEM.

>> JON, YOU DON'T KNOW THE HALFOF IT.

BECAUSE OF THE ACTIONS OFCRIMINALS LIKE MS. McMILLEN A

LOT OF HIGH RANKING BANKEXECUTIVES LOST THEIR HOMES.

>> Jon: THEY REALLY DID LOSETHEIR HOME?

>> YEAH, WELL THEIRPIED-A-TERRES. AND THEY DIDN'T

REALLY LOSE THEM, THEY JUSTCOULDN'T USE THEM OR A COUPLE OF

NIGHTS WHAT WITH THE DRUMMING

AND -- MANY OF BANKERS ARESTILL IN RECOVERY AFTER

YEARS OF SUFFERING FROM PTID.

>> Jon: PTID?

>> POST TRAUMATIC INCONVENIENCEDISORDER.

[LAUGHTER]BUT IF JUSTICE IS TO TRULY BE

SERVED WE ALSO HAVE TO FIX THISTERRIBLE INEQUALITY.

>> Jon: WHAT IS THE INEQUALITYHERE, SAM?

>> PUT YOUR GLASSES ON, OLD MANBECAUSE RIGHT NOW THESE JAIL

TERMS ARE FALLINGDISPROPORTIONATELY ON THE

FINANCIAL SECTOR.

>> Jon: NO THAT'S NOT TRUE.IT'S ACTUALLY EXACTLY EVEN, IT'S

EXACTLY EVEN FOR THE ENTIREFINANCIAL MELTDOWN.

ONE WALL STREETER WENT TO JAILAND ONE OCCUPIER WENT TO JAIL.

SO, EVEN STEVEN, I GUESS WOULDYOU SAY.

>> I'M SORRY, JON. WASN'T THISABOUT THE 99% AGAINST THE 1%.

THAT MEANS THAT ONE BANKER ISWORTH 99 PROTESTERS.

BY MY COUNT THAT PUTS US 98CONVICTED HIPPIES SHORT OF TRUE

JUSTICE. STING ME.

>> Jon: THANK YOU VERY MUCH,SAM.

SAMANTHA BEE, EVERYBODY.

WE'LL BE RIGHT BACK.

[CHEERS AND APPLAUSE]>> Jon: WELCOME BACK.

[CHEERS AND APPLAUSE]NOW -- WE ALL KNOW THAT TWO GAY

MEN IN A LOVING COMMITTEDRELATIONSHIP POSES A THREAT TO

OUR AMERICAN WAY OF LIFE.

WE ALWAYS ASSUMED THAT TWO GAYLADIES WERE OKAY WITH US.

BUT WE FIND OUT OTHERWISE INTONIGHT'S SPECIAL EDITION OF GAY

WATCH, LESBIAN LIFECYCLE.

♪ FIRST --

[LAUGHTER]-- WE BEGIN --

[LAUGHTER]I DON'T KNOW IF THAT'S A STOCK

PHOTO OR NOT BUT --[LAUGHTER]

FIRST, WE BEGIN WITH ONE OF MOSTIMPORTANT MILESTONES IN A

WOMAN'S LIFE.

YOU MEET SOMEONE, IN THIS CASEANOTHER WOMAN, YOU FALL IN LOVE

AND YOU GET MARRIED AND THEN ANDONLY THEN IF YOU ARE BOTH READY?

>> THE JUDGE RULED THAT TWO SANANTONIO WOMEN MARRIED IN ANOTHER

STATE CAN LEGALLYGET A DIVORCE HERE IN TEXAS.

[CHEERS AND APPLAUSE]>> Jon: THEY DID IT.

[CHEERS AND APPLAUSE]TRUE DISDAIN REALLY DOES CONQUER

ALL.

CONGRATULATIONS.

THE CASE COULD HAVE RIPPLEEFFECTS BECAUSE THE STATE OF

TEXAS DOES NOT RECOGNIZESAME-SEX MARRIAGE AND IN THIS

CASE IS RECOGNIZING SAME-SEXDIVORCE.

>> Jon: THAT'S RIGHT. THERECOULD BE A SLIPPERY SLOPE THAT

WOULD OPEN THE DOOR TO SAMESEX TRIAL SEPARATIONS, SAME SEX

LABOR DAY BARBEQUES, SAME SEXQUINCEANERAS. SAME SEX

BAR MITZVAHS. IT'SA SLOPERY SLOPE.

I'M JUST WONDERING THOUGH, WHYDO THEY NEED A DIVORCE IF

THE STATE DOESN'T CONSIDERTHEM MARRIED?

>> ALLISON FLOOD LESH HASN'TSEEN 14 MONTH OLD KATELYN

SINCE NOVEMBER SHORTLY AFTER SHEAND

HER WIFE OF THREE YEARS DECIDEDTO SEPARATE.

>> Jon: OH RIGHT, LEGALPROTECTION. SHE NEEDS TO GET

A DIVORCE IN ORDER TO GET THELEGAL RIGHT TO SEE HER KID.

RIGHT, WELL THAT SOUNDSREASONABLE.

>> LESH'S WIFE ASKED THE JUDGETO TOSS THE CASE SINCE GAY

MARRIAGE ISN'T LEGAL INTEXAS BUT LATE TUESDAY

THE JUDGE DENIED THAT REQUEST.

>> Jon: WOW, TAKING ADVANTAGEOF THE STATE'S HOMOPHOBIC

MARRIAGE LAWS JUST TO GET BACKAT YOUR EX.

THAT IS IMPRESSIVE TO SEE ALESBIAN PULLING SUCH A DICK

MOVE. THAT IS --[CHEERS AND APPLAUSE]

NICE.

NICE.

ON TO THE NEXT STAGE IN THECYCLE OF A LESBIANS LIFE.

RETIREMENT, A JOYFULREFLECTIVE TIME THOUGH LESS SO

WHEN SAID RETIREMENTWAS NOT VOLUNTARY.

SUCH WAS THE CASE FOR LATTASOUTH CAROLINA POLICE CHIEF

CRYSTAL MOORE WHO CLAIMS SHE WASFIRED AFTER 23

YEARS ON THE FORCE BECAUSE OFHER SEXUAL ORIENTATION.

BUT WAS SHE? WAS SHE?

>> SOME RESIDENTS BELIEVETHE MAYOR FIRING CRYSTAL WAS

PAYBACK. CHIEF MOOREINVESTIGATED MAYOR BULLARD'S

MOST RECENT HIRE. CHIEF MOOREFOUND THE MAYOR

NEGLECTED TO CONDUCT ABACKGROUND CHECK ON SELLERS.

>> Jon: AND, IF HE HAD RUN ABECOMEGROUND CHECK THE MAYOR

WOULD HAVE FUND OUT THAT VONTRAYSELLERS HAD CRASHED HIS CAR IN

A DITCH WHILE DRUNK DRIVING.

SO, IT IS POSSIBLE THIS ISN'T ACASE OF HOMOPHOBIA AND JUST SOME

GOOD OLD FASHIONED SMALLTOWN CRONYISM.

>> THE CITY'S NEW MAYOR EARLBULLARD WHO WAS SECRETLY

RECORDED BY A COUNCIL MEMBER.

>> I WOULD MUCH RATHER HAVESOMEBODY WHO DRANK AND DRANK TOO

MUCH TAKING CARE OF MY CHILDTHAN I HAVE SOMEBODY WHOSE

LIFESTYLE IS QUESTION ABLEAROUND CHILDREN.

>> Jon: OKAY HOMOPHOBIA ITWAS. ALRIGHT, I'M SORRY. NO,

HE'S JUST SAYING HIS CHILDCARE HIERARCHY IS THIS.

HIS FIRST CHOICE, HIS EXWIFE,SECOND CHOICE 15-YEAR-OLD DOWN

THE STREET WITH ADD.THEN DRUNK GUY, THEN

ESCAPED MENTAL PATIENT, THENTORONTO CRACK

SMOKING MAYOR ROB FORD AND THENFIGMENT OF HIS IMAGINATION AND

THEN AND ONLY THEN A RESPONSIBLELESBIAN WHO RUNS AN ACCREDITED

AND LICENSED CHILD CAREFACILITY. SIR, JUST OUT OF

CURIOSITY, WHY CAN'T A LESBIANTAKE CARE OF YOUR CHILD?

>> BECAUSE THAT AIN'T THE DAMNWAY IT'S SUPPOSED TO BE.

>> Jon: SAYS IT RIGHT THERE INTHE BIBLE.

GOD SAYth UNTO MOSES, THOUSHALT LEAVE THY SON TO BE

WATCHED BY YE WHO DRUNKENLYABANDONED HIS CAR IN A DITCH.

SO SAYETH THE LORD.

SO, LESBIANS DON'T GET TO TAKEPART IN EVERY DAY LIFE EVEN THE

BAD PARTS LIKE DIVORCE AND WORK.AT LEAST TELL ME THEY

ARE TREATED EQUALLY AT THE ENDOF THE LIFE CYCLE.

>> IN IDAHO, A NAVY VET ISMOURNING THE DEATH OF HER LATE

WIFE BUT MADELEINE TAYLOR ISALSO MOURNING SOMETHING ELSE.

THE STATE RUN VETERANS CEMETERYWHERE TAYLOR HOPES TO BE BURIED

ONE DAY IS REFUSING TO BURY HERWITH HER WIFE'S REMAINS.

>> Jon: YE YOU (bleep).

CONGRATULATIONS IDAHO YOUFIGURED OUT HOW TO SCREW GAY

PEOPLE FROM BEYOND THE GRAVE.

AND A VETERAN NO LESS. LET METELL YOU SOMETHING,

THIS WOMAN BETTER NOT BEADORABLE OR YOU ARE IN TROUBLE.

>> TAYLOR WAS HOPING THEY WOULDAPPROVE IT SINCE THEIR ASHES

WOULD FIT IN ONE SPOT ON THEWALL.

>> IT'S NOT TAKING UP ANY MORESPACE TO HAVE BOTH OF US IN

THERE. I DON'T SEE WHERETHE ASHES OF OF A COUPLE

OF OLD LESBIANS IS GOINGTO HURT ANYBODY.

>> Jon: IDAHO. YOU ARETELLING ME YOU DON'T

WANT TO SEE THAT SWEET OLDLADY, BURNED TO

ASHES AND PLACED IN -- [LAUGHTER]

-- POINT IS JUST LET HER DOWHAT SHE WANTS.

WE'LL BE RIGHT BACK.

[CHEERS AND APPLAUSE][CHEERS AND APPLAUSE]

>> Jon: WELCOME BACK.

MY GUEST TONIGHT IS THE SIMEONE. BALDWIN PROFESSOR OF

LAW EMERITUS AT YALE UNIVERSITY.ALSO AN AUTHOR,

HIS NEW BOOK IS CALLED "WHYGOVERNMENT FAILS SO OFTEN AND

HOW IT CAN DO BETTER."

PLEASE WELCOME TO THE PROGRAMPETER SCHUCK.

SIR, HOW ARE YOU?

[CHEERS AND APPLAUSE]THANK YOU FOR BEING HERE.

THIS, THIS, THIS, THIS, WHYGOVERNMENT FAILS SO OFTEN AND

HOW WE CAN DO BETTER.

WHY IS THIS NOT MORE A PART OFTHE NATIONAL CONVERSATION?

WHY DO YOU THINK THE NATIONALCONVERSATION IS SO TIED UP IN

CONFLICT AND PARTISAN RHETORICAND NOT THE BUSINESS OF

GOVERNANCE?

>> WELL, A FEW REASONS.

ONE REASON IS THAT PEOPLE WOULDRATHER TALK ABOUT WHAT THEY WISH

WOULD HAPPEN, HOW THE WORLDSHOULD BE, RATHER THAN THE WAY

IT ACTUALLY IS, THE WAY IT WORKSOUT IN REALITY.

MOST OF US ARE LIKE THAT.

SECONDLY, THE GOVERNMENT DOESN'TWANT TO KNOW IN MANY CASES WHY

IT'S PROGRAMS DO SO POORLY.

>> Jon: DO THEY HAVE -- WHATARE THE MECHANISMS OF GOVERNMENT

TO ASSESS THAT?

WHAT ARE THE METRICS THEY USEAND WHAT DO THEY EVEN DO TO

ASSESS IT?

>> THERE'S A FEW AGENCIES LIKETHE GAO AND CONGRESSIONAL BUDGET

OFFICE AND INSPECTORS GENERAL OFVARIOUS

DEPARTMENTS, THEY DO PERIODICASSESSMENTS OF PROGRAMS BUT ONLY

WHEN CONGRESS ASKS THEM TO DOTHAT OR DIRECTS THEM TO DO THAT.

THEY HAVE A VARIETY OFMETHODOLOGIES, COST

EFFECTIVENESS IS USUALLY THEMAJOR CRITERION.

>> Jon: AND, ARE THOSE FINDINGSUSUALLY UTILIZED? ARE THEY

IMPLEMENTED? WHAT'S THE RESULTOF THAT?

>> THEY'RE PUBLISHED. WHETHERTHEY'RE UTILIZED OR NOT.

>> Jon: THEY'RE JUST PUBLISHED.

[LAUGHTER]WELL THAT'S VERY LOVELY.

>> LIKE MY BOOK.

>> Jon: EXACTLY YOUR BOOK ISPUBLISHED.

IT'S PERFECT.

[CHEERS AND APPLAUSE]WHAT YOU DID WHICH IS LONG

OVERDUE IS YOU TRY TO FIND A WAYTO ATTACH VALUE TO THESE

PROGRAMS. YOU HEAR FROM -- ITHINK FOR PEOPLE WHO STILL

BELIEVE GOVERNMENT HAS ANIMPORTANT ROLE TO PLAY IN

IMPROVING PEOPLES LIVES ANDTHEN WE WATCH THEM NOT BE ABLE

TO DO THE SIMPLEST OF TASKS LIKEPROCESS VETERAN HEALTH

CLAIMS IN AN EFFICIENT WAYIS DISHEARTENING.

AND THEN ON THE OTHER SIDE YOUHAVE PEOPLE JUST SAY, WELL IT'S

TOO BIG AND YOU HAVE TO CUTMONEY WITHOUT ATTACHING BIGNESS

OR MONEY TO ANY VALUE THAT ITMAY BE PROVIDED.

>> RIGHT, WELL YOU HAD A SEGMENTI THINK LAST WEEK ABOUT THE V.A.

AND THE COVERUP THAT OCCURREDAFTER IT WAS REVEALED. ALTHOUGH,

PEOPLE WHO WATCH THESE THINGSHAVE KNOWN FOR A LONG TIME

THE V.A. BACKLOGS ARE TERRIBLE.

REALLY TERRIBLE.

THEY ARE REDUCED AND ONCE THEYARE REDUCED IT'S LIKE A HIGHWAY.

YOU REDUCE CONGESTION AND MOREPEOPLE COME ON.

>> Jon: WHY DO THEY HAVE SUCHTROUBLE REFORMING CLEARLY

FAILING OR INEFFICIENT SYSTEMS?

IT'S NOT THAT CLEAR TO A LOT OFPEOPLE.

PEOPLE WHO SUPPORT THESEPROGRAMS CAN FIND LOTS OF

REASONS TO THINK THAT THEY ARESUCCEEDING AND THERE

ARE ALWAYS LOTS OF INTERESTS WHOWANT THEM TO DO MORE OF THE

SAME. SO IT REQUIRES PEOPLE,LIKE ME, AND OTHER PEOPLE WHO

WILL ACTUALLY GO ANDLOOK AT THE DATA REALLY

CAREFULLY AND MAKE SOMEJUDGMENTS ABOUT WHETHER IT

WORKS OR NOT.

>> Jon: YOU MENTIONED THEHOMESTEAD ACT AS A PROGRAM THAT

WAS COST EFFICIENT, YOU KNOW,

A RESOURCE WAS GIVEN BY THEFEDERAL GOVERNMENT TO A GROUP OF

PEOPLE FOR A PARTICULAR PURPOSEAND THAT HELPED US SETTLE THE

WEST. SO, THAT IS CONSIDEREDA SUCCESS.

>> WELL, THAT WAS A RELATIVELYEASY CASE BECAUSE THE LAND WAS

BASICALLY FREE EXCEPTFOR THE INDIANS WHO

HAPPENED TO LIVE THERE AND WEREMASSACRED ALONG THE WAY.

>> Jon: SURE.

>> Jon: I'M SURE ON THEIR "THEDAILY SHOW" THEY ARE HAVING A

VERY DIFFERENT CONVERSATION. [LAUGHTER]

>> THAT WAS RELATIVELY EASY. ITDIDN'T COST

ANYBODY ANYTHING REALLY EXCEPTFOR THE NATIVE AMERICANS.

>> Jon: YOU COULD REALLY JUSTEND EVERY CONVERSATION ABOUT

THIS COUNTRY WITH THATPHRASE, BY THE WAY.

SO IT WORKED OUT,

EXCEPT FOR THE NATIVE AMERICANS.

[ LAUGHTER ]WHAT ABOUT SOMETHING A LITTLE

WONKIER SOCIAL SECURITY?

>> SOCIAL SECURITY HAS BEEN ASUCCESSFUL PROGRAM BUT IT'S

GOING INSOLVENT.

FORTUNATELY WITH SOCIAL SECURITYTHERE ARE A LOT OF RELATIVELY

STRAIGHTFORWARD FIXES THAT COULDBE DONE.

YOU CAN EXTEND THE RETIREMENTAGE, YOU CAN TAX UPPER INCOME

RECIPIENTS.

PEOPLE LIKE YOU.

>> Jon: YES, EXACTLY. KICK ITIN, BABY I'M READY.

>> BUT, YOU ARE NOT 65 YET.

SO, IT DOESN'T MATTER.

>> Jon: YOU HAVE NO IDEA WHATIS GOING ON INSIDE MY BODY.

I'M ABOUT 93.

[ LAUGHTER ]>> YOU CAN INCREASE THE WAGES

THAT ARE TAXABLE.

THERE ARE LOTS OF WAYS TO DO IT.

>> Jon: DO YOU HAVE A SENSETHAT WHAT NEEDS TO BE DONE IS

A MORE ACTIVE MANAGEMENT OFTHESE PROGRAMS OR THERE HAS TO

BE A MORE FUNDMENTAL CHANGE INTHE WAY WE VIEW THE

IMPLEMENTATION OF POLICY?

>> I THINK IT'S BOTH.

IT'S NOT JUST ACTIVE MANAGEMENT.

THE MANAGEMENT IS OFTEN VERYINTERIOR. OUR BUREAUCRACY

HAS BEEN DEBASEDAND DEGRADED OVER TIME. IT HAS

A TERRIBLE MORALE PROBLEM.MUCH MORE SO THAN IT USED TO.

>> Jon: BUT, THAT'S A MANAGEMENTPROBLEM MORE THAN IT IS, YOU

KNOW, THE PEOPLE I TALKTO IN THE BUREAUCRACY

ARE GENERALLY PRETTY GOODHEARTED, PRETTY MUCH WANT TO

DO THE RIGHT THING BUT DON'THAVE THE MARCHING ORDERS.

>> BUT THAT'S PART OF THEPROBLEM.

THERE'S BEEN MUCH MORE LAYERINGOF POLITICAL APPOINTEES ON TOP

OF THEM TO A MUCH GREATER EXTENTTHAN IN THE PAST. SO,

THEY DON'T HAVE THE SAMEKIND OF AUTONOMY, THE SAME

SORT OF SENSE OF MISSIONTHEY USED TO.

IN THE BOOK I DISCUSS A NUMBEROF STUDIES

THAT HAVE INTERVIEWED THEM ANDHAVE DONE A VARIETY OF TESTS TO

SEE HOW THIS BUREAUCRACY ISFUNCTIONING.

IT'S IN DEEP CRISIS.

>> Jon: WE'RE IN THE DEEPCRISIS.

WE'RE ON THE PRECIPICE OFCOLLAPSE. WE'RE GOING

TO COMMERCIAL, YOU'LL BE ON THEWEB AND YOU'RE GOING

TO TELL US HOW TO FIX IT ANDYOU'LL HAVE THREE MINUTES.

WHY GOVERNMENT FAILS SO OFTEN.

THIS IS THE BOOK.

THESE ARE THE CONVERSATIONS THATTHE NEWS NETWORKS I THINK

SHOULD BE HAVING.

>> THEY DON'T.

>> Jon: YEAH, NO. I KNOW.

PETER SCHUCK.

WE'LL BE RIGHT BACK.

[CHEERS AND APPLAUSE][CHEERS AND APPLAUSE]

>> Jon: THAT'S OUR SHOW.

HERE IT IS YOUR MOMENT OF ZEN.

>> DON'T FORGET THIS WAS PRIOR,PRIOR TO OSAMA BIN LADEN BEING

TAKEN DOWN.

AND THE THOUGHT WAS AND THEDISCUSSION WAS IS PRESIDENT

OBAMA GOING INTO THE REELECTIONSOFT ON TERROR OR NOT?

A LOT OF PEOPLE ARE SAYING -- ITWAS AFTER?

MUCH AFTER?

>> YEAH, YEAH, YEAH, A YEAR.

>> MY BAD, I TAKE IT BACK.

[CHEERS AND APPLAUSE]>> Jon: WELCOME BACK.

MY GUEST TONIGHT IS THE BALDWINPROFESSOR OF LAW EMERITUS

AT YALE UNIVERSITY. ALSO ANAUTHOR,

HIS NEW BOOK IS CALLED "WHYGOVERNMENT FAILS SO OFTEN AND

HOW IT CANDO BETTER."

PLEASE WELCOME TO THE PROGRAMPETER SCHUCK.

SIR, HOW ARE YOU?

[CHEERS AND APPLAUSE]THANK YOU FOR BEING HERE.

THIS, THIS, THIS, THIS -- "WHYGOVERNMENT FAILS SO OFTEN AND

HOW WE CAN DO BETTER."

WHY IS THIS NOT MORE A PART OFTHE NATIONAL CONVERSATION?

WHY DO YOU THINK THE NATIONALCONVERSATION IS SO TIED UP IN

CONFLICT AND PARTISAN RHETORICAND NOT THE BUSINESS OF

GOVERNANCE?

>> WELL, A FEW REASONS.

ONE REASON IS THAT PEOPLE WOULDRATHER TALK ABOUT WHAT THEY WISH

WOULD HAPPEN, THE WORLD SHOULDBE RATHER THAN THE WAY IT

ACTUALLY IS, THE WAY IT WORKSOUT IN REALITY.

SO, MOST OF US ARE LIKE THAT.

SECONDLY, THE GOVERNMENT DOESN'TWANT TO KNOW IN MANY CASES WHY

ITS PROGRAMS DO SO POORLY.

>> Jon: DO THEY HAVE?

WHAT ARE THE MECHANISMS OFGOVERNMENT TO ASSESS THAT?

WHAT ARE THE METRICS THEY USEAND WHAT DO THEY EVEN DO TO

ASSESS?

>> THERE A FEW AGENCIES LIKE THEGAO, AND THE CONGRESSIONAL

BUDGET OFFICE, AND THEINSPECTOR'S GENERAL OF

VARIOUS DEPARTMENTS, THEY DOPERIODIC ASSESSMENTS OF PROGRAMS

BUT ONLY WHEN CONGRESS ASKSTHEM TO DO THAT OR DIRECTS THEM

TO DO THAT. THEY HAVE AVARIETY OF METHODOLOGIES.

COST EFFECTIVENESS IS USUALLYTHE MAJOR CRITERION.

>> Jon: AND, ARE THESE FINDINGSUSUALLY UTILIZE AND IMPLEMENTED?

WHAT'S THE RESULT OF THAT?

>> THEY ARE PUBLISHED.

>> Jon: THEY ARE JUSTPUBLISHED.

>> WHETHER THEY'RE UTILIZED ORNOT.

[LAUGHTER]THAT'S VERY LOVELY.

>> LIKE MY BOOK.

>> Jon: YES, EXACTLY. YOUR BOOKIS PUBLISHED.

IT'S PERFECT.

[CHEERS AND APPLAUSE]BUT, WHAT YOU DID WHICH IS LONG

OVERDUE YOU TRY TO FIND A WAY TOATTACH VALUE TO THESE PROGRAMS.

YOU KNOW, YOU HEAR FROM -- ITHINK FOR PEOPLE WHO STILL

BELIEVE GOVERNMENT HAS ANIMPORTANT ROLE TO PLAY IN

IMPROVING PEOPLE'S LIVES ANDTHEN WE WATCH THEM NOT BE ABLE

TO DO THE SIMPLEST OF TASKS LIKEPROCESS VETERANS

HEALTH CLAIMS IN AN EFFICIENTWAY, IT'S DISHEARTENING.

AND THEN ON THE OTHER SIDE, YOUHAVE PEOPLE JUST SAY, WELL,

IT'S TOO BIG AND YOU HAVE TOCUT MONEY WITHOUT

ATTACHING BIGNESS OR MONEY TOANY VALUE IT MIGHT BE PROVIDING.

>> RIGHT. WELL,YOU HAD A SEGMENT

LAST WEEK ABOUT THE V.A.

AND THE COVERUP THAT OCCURREDAFTER IT WAS REVEALED.

>> Jon: CORRECT.

>> ALTHOUGH PEOPLE WHO WATCHTHESE THINGS HAVE KNOWN FOR A

LONG TIME THAT THE V.A. BACKLOGSARE TERRIBLE. REALLY TERRIBLE.

>> Jon: RIGHT.

>> AND, THEY ARE REDUCED, ANDONCE THEY'RE REDUCED IT'S LIKE A

HIGHWAY. YOU REDUCE CONGESTIONAND MORE PEOPLE COME ON.

>> Jon: WHY DO THEY HAVE SUCHTROUBLE, THOUGH, REFORMING

CLEARLY FAILING ORINEFFICIENT SYSTEMS?

>> WELL, IT'S NOT THAT CLEAR TOA LOT OF PEOPLE. PEOPLE WHO

SUPPORT THESE PROGRAMS CAN FINDLOTS OF REASONS TO

THINK THEY ARE SUCCEEDING ANDTHERE ARE ALWAYS LOTS

OF INTERESTS WHO WANT THEMTO DO MORE OF THE SAME.

IT REQUIRES PEOPLE LIKE ME ANDOTHER PEOPLE WHO WILL ACTUALLY

GO AND LOOK AT THE DATA REALLYCAREFULLY AND MAKE SOME

JUDGMENTS ABOUT WHETHERIT WORKS OR NOT.

>> Jon: YOU MENTIONED THEHOMESTEAD ACT AS A PROGRAM THAT

WAS COST EFFICIENT, YOU KNOW, ARESOURCE WAS GIVEN BY THE

FEDERAL GOVERNMENT TO AGROUP OF PEOPLE FOR A

PARTICULAR PURPOSE AND THATHELPED US SETTLE THE WEST. SO,

THAT IS CONSIDERED A SUCCESS.

>> WELL, THAT WAS A RELATIVELYEASY CASE BECAUSE THE LAND WAS

BASICALLY FREE EXCEPT FOR THEINDIANS WHO HAPPENED TO LIVE

THERE AND WERE MASSACRED ALONGTHE WAY.

>> Jon: SURE. I'M SURE RIGHT NOW

ON THEIR "THE DAILY SHOW"THEY ARE HAVING A VERY DIFFERENT

CONVERSATION.

[ LAUGHTER ]>> BUT, SO THAT WAS RELATIVELY

EASY. IT DIDN'T COST ANYBODYANYTHING REALLY EXCEPT THE

NATIVE AMERICANS.

[LAUGHTER]BUT.

>> Jon: YOU CAN REALLY JUSTEND EVERY CONVERSATION ABOUT

THIS COUNTRY WITH THAT PHRASE,BY THE WAY.

SO IT WORKED OUT.

>> I WORKED OUT.

>> Jon: EXCEPT FOR THE NATIVEAMERICANS.

[ LAUGHTER ]WHAT ABOUT SOMETHING A LITTLE

WONKIER, SOCIAL SECURITY?

>> SOCIAL SECURITY HAS BEEN AVERY SUCCESSFUL PROGRAM.

BUT IT'S GOING INSOLVENT.

FORTUNATELY WITH SOCIAL SECURITYTHERE ARE A LOT OF RELATIVELY

STRAIGHTFORWARD FIXES THAT CANBE DONE.

YOU CAN EXTEND THE RETIREMENTAGE.

YOU CAN TAX UPPER INCOMERECIPIENTS, PEOPLE LIKE YOU.

>> Jon: EXACTLY.

I'M READY.

KICK IT IN, BABY I'M READY.

>> BUT, YOU ARE NOT 65 YET SO ITDOESN'T MATTER.

>> Jon: YOU HAVE NO IDEA WHATIS GOING ON INSIDE MY BODY.

I'M ABOUT 93.

>> YOU CAN INCREASE THE WAGESTHAT ARE TAXABLE.

THERE ARE JUST LOT OF WAYS TO DOIT.

>> Jon: DO YOU HAVE A SENSETHAT WHAT NEEDS TO BE DONE IS

SAY MORE ACTIVE MANAGEMENT OFTHE PROGRAMS OR THERE HAS TO BE

A MORE FUNDAMENTAL CHANGE IN THEWAY WE VIEW THE IMPLEMENTATION

OF POLICY?

>> WELL, I THINK IT'S BOTH.

AND, IT'S NOT JUST ACTIVEMANAGEMENT.

THE MANAGEMENT IS OFTENVERY, VERY INFERIOR.

OUR BUREAUCRACY HAS BEEN DEBASEDAND DEGRADED OVER TIME.

IT'S MUCH LESS WELLEDUCATED, NO THAT'S WRONG,

IT'S MUCH LESS COMPETENT THANIT USED TO BE

RELATIVE TO THE REST OF SOCIETY.IT'S BEEN --

>> Jon: NOW, HOW DO YOU QUANTIFYSOMETHING LIKE THAT? BECAUSE

IT SEEMS -- YOU ARE SAYING THEACTUAL GOVERNMENT BUREAUCRACY IS

LESS EDUCATED THAN IT WAS 30YEARS?

>> NO, NO I DIDN'T MEAN THAT.

AND, I MISSPOKE IF I SUGGESTEDTHAT.

I JUST MEAN THAT THE BUREAUCRACYHAS A TERRIBLE MORALE PROBLEM,

MUCH MORE SO THAN IT USED TO.

>> Jon: BUT THAT'S A MANAGEMENTPROBLEM MORE THAN IT IS,

YOU KNOW, THE PEOPLE I TALKTO IN THE BUREAUCRACY

ARE GENERALLY PRETTY GOODHEARTED, PRETTY MUCH WANT TO

DO THE RIGHT THING. DON'THAVE THE MARCHING ORDERS.

>> BUT, THAT'S PART OF THEPROBLEM.

THERE'S BEEN MUCH MORE LAYERINGOF POLITICAL APPOINTEES ON TOP

OF THEM TO A MUCH GREATER EXTENTTHAN IN THE PAST.

>> Jon: RIGHT.

>> SO THEY DON'T HAVE THE SAMEKIND OF AUTONOMY, THE SAME SORT

OF SENSE OF MISSION THEY USED TOHAVE. SO, IN THE BOOK I

DISCUSS A NUMBER OF STUDIESTHAT HAVE INTERVIEWED THEM AND

HAVE DONE A VARIETY OF TESTSTO SEE HOW THIS BUREAUCRACY

IS FUNCTIONING. IT'S IN DEEPCRISIS.

>> Jon: OK, SO NOW WE'RE AT THEDEEP CRISIS.

WE'RE ON THE PRECIPICE OFCOLLAPSE.

WE'RE GOING TO GO TO COMMERCIAL,COME BACK AND YOU'RE GONNA BE ON

THE WEB AND YOU CAN TELLUS HOW TO FIX IT.

AND YOU'LL HAVE ABOUT THREEMINUTES.

[LAUGHTER]WHY GOVERNMENT FAILS SO OFTEN.

THIS IS THE BOOK, THESEARE THE CONVERSATIONS

THE NEWS NETWORKS I THINK SHOULDBE HAVING.

>> THEY DON'T.

>> Jon: YEAH, NO, I KNOW.

PETER SCHUCK.

WE'LL BE RIGHT BACK.

[CHEERS AND APPLAUSE][ APPLAUSE ]

>> Jon: NOW, FIXING IT I BELIEVEIS CHAPTER 9, CHAPTER 8, IS THAT

WHAT IT WAS?

>> FIXING IT IS CHAPTER 12.

>> Jon: CHAPTER 12 WAS THEFIXING IT CHAPTER.

>> CHAPPTER 11 IS ABOUT THESUCCESS STORIES.

THERE ARE SOME SUCCESS STORIES.

>> Jon: GIVE ME SOME SUCCESSSTORIES TO GIVE US A LITTLE BIT.

>> OK, WELL, IT STARTS WITH THEHOMESTEAD ACT AND THE MORRILL

ACT WHICH ESTABLISHED THELAND GRANT COLLEGE SYSTEM.

>> Jon: RIGHT.

>> AND MUCH MORE RECENTLY, THEEARNED INCOME TAX CREDIT,

MUCH BETTER WAY OFINCREASING THE WAGES -- OR THE

INCOME OF WORKING CLASS PEOPLETHAN OTHERWISE.

>> Jon: RIGHT.

>> AIRLINE DEREGULATION HAS BEENA BIG SUCCESS.

BUT, OF COURSE, THAT WAS NOT APROGRAM BUT ENDING A PROGRAM.

>> Jon: THAT WAS ENDING APROGRAM. RIGHT.

WHAT ABOUT SOMETHING LIKE THECLEAN AIR ACT?

>> IT'S VERY COMPLICATED. THECLEAN AIR ACT HAS --

>> Jon: TOO CLEAN? THE AIR, ITGOT TO CLEAN? NEEDED A LITTLE

BIT OF GRIT IN THERE TO HELPPEOPLE OUT?

[LAUGHTER]

>> IT'S COMPLICATED BECAUSE THECLEAN AIR ACT GENERALLY COULD

HAVE BEEN ADMINISTERED AT A MUCHLOWER COST IMPOSING ON INDUSTRY.

BUT, THE CLEAN AIR ACT IS ONE OFRELATIVELY FEW EXAMPLES

IN WHICH CONGRESS HAS LET MARKETFORCES WORK ON BEHALF

OF THE ENVIRONMENT BY HAVINGTRADING PERMITS AND SO FORTH.

>> Jon: RIGHT. BUT,ISN'T THAT ONE OF THOSE

SITUATIONS, THOUGH, THAT SHOWSTHE NEED

OF GOVERNMENT OUTSIDE OF MARKETFORCES BECAUSE POLLUTION IS ONE

OF THOSE AREAS WHERETHERE'S AN EXTERNALITY.

THEY DON'T REALLY HAVE ANINCENTIVE TO CLEAN UP AND EVEN

WHEN SOMETHING GETS POLLUTED THETAXPAYER PICKS UP THE TAB FOR

THAT, THOSE SUPER FUND SITES, ETCETERA.

SO, THEY DON'T HAVE ANYINCENTIVE TO SPEND MONEY IN

PRESERVING RESOURCES THATWE MIGHT NEED LATER.

>> THAT'S RIGHT. SO, THAT'SA CLASSIC AREA IN WHICH YOU HAVE

TO HAVE GOVERNMENT. TO REGULATEEXTERNALITIES.

IN OTHER AREAS YOU NEEDGOVERNMENT FOR INFRASTRUCTURE.

>>Jon: RIGHT.

>> NOW, UNFORTUNATELY WHENGOVERNMENT PRODUCES

INFRASTRUCTURE LIKE AMTRAK IT'SVERY INEFFICIENT. EXTREMELY

INEFFICIENT. AMTRAK SERVESMAINLY THE NORTHEAST CORRIDOR

RELATIVELY UPPER INCOME PEOPLEWHO ARE TAX PAYERS GENERALLY.

SO THAT'S BEEN A REAL BUST.

>> Jon: WHAT DO YOU THINK ARETHE REASONS WHY?

WHAT ARE THE INEFFICIENCIES?

IS IT OVERHEAD?

IS IT ADMINISTRATIVE COSTS?

MEDICARE, FOR INSTANCE, THEYSAY HAS A LOWER ADMINISTRATIVE

COST THAN FREE MARKETINSURANCE PROGRAMS?

>> WELL, IT'S ALSO MORECOMPLICATED BECAUSE MEDICARE,

ALL GOVERNMENT PROGRAMS HAVECERTAIN ADVANTAGES IN TERMS OF

BUDGETING AND TAX AND SO FORTHTHAT PRIVATE MARKETS DON'T.

SO, IT'S REALLY UNCLEAR.

I'VE SEEN A STUDY WHICH SUGGESTSIT'S NOT CHEAPER

ADMINISTRATIVELY BUT WE CANARGUE ABOUT THAT.

>> Jon: WHY DON'T WE DO THATON TELEVISION?

[LAUGHTER]SO WE HAVE SOME PROGRAMS THAT

WORK.

WE HAVE SOME PROGRAMS --GENERALLY WHEN YOU SAY THEY

DON'T WORK, IT'S BASED ON --IT'S NOT COST EFFICIENT AND

IT -- ALTHOUGH IT HAS GOODINTENTIONS INCENTIVIZES THINGS

IN A WAY OF UNFORESEENCONSEQUENCES THAT ACTUALLY

CORRODE ITS ORIGINAL INTENT.

>> WELL, LET ME ADD A THIRD.

AND THEN COME BACK TO THEINCENTIVES PART.

>>Jon: YES, PLEASE.

>> THE THIRD IS THAT MANY OFTHESE PROGRAMS ARE POORLY

TARGETED.>> Jon: RIGHT.

SO, STUDENT LOANS, FOR EXAMPLE,WHICH IS A CALAMITY WAITING TO,

>> Jon: THE NEXT BUBBLE.

>> HUGE DELINQUENCY RATES ANDTREMENDOUS MORAL HAZARD WHICH IS

WHAT YOU ARE TALKING ABOUT WHENYOU TALK ABOUT WITH INCENTIVES.

IT'S ALSO POORLY TARGETED.MANY STUDIES HAVE SHOWN

THAT THE PEOPLE WHO BENEFIT FROMTHE STUDENT LOAN PROGRAM

ARE PRIMARILY PEOPLE WHO WOULDHAVE GONE TO COLLEGE ANYWAY AND

THEY'RE MIDDLE CLASS OR UPPERMIDDLE CLASS PEOPLE, NOT POOR

PEOPLE. GETTING BACKTO THE INCENTIVES POINT,

WHICH ECONOMISTS CALL MORALHAZARD, WE HAVE MANY

PROGRAMS, MANY PROGRAMSOF THAT KIND. SOCIAL SECURITY

DISABILITY, FOR EXAMPLE, HASINCREASED COSTS ENORMOUSLY

AND THE NUMBER OF PEOPLE ONDISABILITY ENORMOUSLY EVEN

THOUGH JOB CONDITIONS ARE MUCHSAFER THAN THEY USED TO BE.

>> Jon: RIGHT.

>> BECAUSE THE GOVERNMENT -->> Jon: CAN THEY STUDY MORAL

HAZARD?

AND WHY DO YOU THINK IT IS THATMORAL HAZARD IS NEVER APPLIED TO

CORPORATIONS? BECAUSE

I ALWAYS FIND IT'S ALWAYSAPPLIED TO THE SINGLE MORTGAGE

HOLDER, THE GENTLEMAN ONDISABILITY, SOMEBODY ON FOOD

STAMPS BUT NEVER TO AN OILCOMPANY THAT GETS HUGE SUBSIDIES

OR FARMERS THAT ARE PAID NOT TOGROW OR LARGE AGRI-CORPS THAT

ARE -- YOU KNOW, MORAL HAZARDNEVER ENTERS THAT CONVERSATION.

>> WELL, YOUR EARLIER SEGMENT ONBANKING.

>> Jon: THAT WAS TALES OF MORALHAZARD, THAT IS CORRECT.

>> A VERY GOOD EXAMPLE. TOO BIGTO FAIL, TOO BIG TO JAIL.

>> Jon: RIGHT.

>> SO THAT'S A TERRIBLE PROBLEM.FANNIE MAE AND FREDDIE MAC HAVE

INCREASED THAT KIND OF RISK.>>Jon: RIGHT.

HOPEFULLY IT CAN BE REDESIGNEDIN A WAY THAT WILL REDUCE THE

MORAL HAZARD.

>> Jon: RIGHT. SO IN YOUR MIND,THREE QUICK THINGS THAT YOU

THINK, IF LOOKED AT, WOULD HELPWITH THESE THINGS THAT YOU LAIDOUT.

>> OK, FIRST IS A SUBSTANTIVEPOLICY THING, WOULD BE TAX

REFORM, TAX SIMPLIFICATION.>>Jon: RIGHT.

>> THERE ARE A NUMBER OFBOOKS, MY COLLEAGUE AT YALE

MICHAEL GRASSMAN.

>> Jon: OH, HIS STUFF ISTERRIBLE. I HATE HIS STUFF.

I DON'T KNOW MICHAEL GRASSMAN. IAPOLOGIZE.

I MADE THAT UP.

[ LAUGHTER ]>> MY FORMER STUDENT IS IN THE

AUDIENCE ALEX RASKOLNIKOV.

>> Jon: OH KOSKOLINKOV! I CALLHIM MR. K.

WHERE IS HE?

>> I DON'T KNOW WHERE HE IS.

>> Jon: OH HEY, WHAT'S UP? WHATDO YOU DO?

WHAT IS YOUR THING?

>> TEACH TAX LAW.

>> Jon: WOW, THAT'S EXCITING.ALRIGHT, LET'S GO WITH YOU.

[ LAUGHTER ]GETTING OUT OF HERE.

>> OK, SO THAT'S NUMBER ONE.

NUMBER TWO POLITICAL SYSTEM, ITHINK WE OUGHT TO GET RID OF THE

PARTY PRIMARIES. ITHINK THEY TEND TO --

>> Jon: GET RID OF THE -- HOW

WOULD YOU CHOOSE A PRESIDENT?

JUST AT THE CONVENTION?

>> NO, NO, NO, NOT FORPRESIDENT, CANDIDATES

GENERALLY AS WELLAS THE PRESIDENT. YOU HAVE

PARTY LEADERS MEASURING PUBLICOPINION ABOUT WHICH CANDIDATE IS

LIKELY TO WIN, AND SO FORTH. THEWAY IT USED TO BE.

>> Jon: DOESN'T THAT -->> PARTY PRIMARIES PUSH PEOPLE

TO THE EXTREMES.

>> Jon: IT DOES BUT WOULDN'T YOUHAVE A HARD TIME SAYING IT'S OUR

ONE MECHANISM OF ACCOUNTABILITY.

VOTING IS THE ONLY OPPORTUNITYTHAT WE HAVE.

DOESN'T THAT ALLOW TOO MANYTHINGS FOR BACKROOM DEALINGS,

OAK FILLED ROOMS, THAT SORT OFTHING?

>> WELL, THAT'S VOTING FORCANDIDATES.

WE'RE TALKING ABOUT SELECTINGCANDIDATES IN THE FIRST PLACE.

VERY FEW PEOPLE VOTE IN THEPRIMARIES AND THEY ARE USUALLY

ON THE EXTREME EDGES OF EACHPARTY. PARTY LEADERS ACTUALLY

KNOW A LOT MORE AND CARE ALOT MORE ABOUT ACTUALLY

WINNING AS DISTINGUISHED FROMWAGING A HOLY WAR.

>> Jon: WHAT IF WE NARROWEDTHE PROCESS DOWN, STILL ALLOWING

PEOPLE TO HAVE THEACCOUNTABILITY OF DEMOCRATIC

ELECTIONS BUT MAKING THE PROCESSMUCH NARROWER IN TIME.

AND SO IT DOESN'T ALLOW FORPERMANENT CAMPAIGN?

I WOULD BE CONCERNED ABOUTHANDING THE POWER OF CANDIDATE

SELECTION TO PARTY OFFICIALS.

THAT SEEMS LIKE A RECIPE FORREALLY CRONYISM IN A WAY WE

DON'T EVEN HAVE NOW.

>> WHAT YOU HAVE TOREMEMBER IS PARTY OFFICIALS ARE

GOING TO SELECT CANDIDATESWHO HAVE A GOOD CHANCE

OF WINNING. THEY WANT TOWIN. THAT'S ALL THEY CARE ABOUT.

>> Jon: MAYBE I'M TALKINGABOUT IS THE ILLUSION THAT

SOMEBODY GOOD --[LAUGHTER]

I GUESS WHAT I'M SAYING IS CAN'TYOU JUST MAINTAIN THE

ILLUSION --[LAUGHTER]

I HEAR YOU.

ALL RIGHT.

WHAT IS NEXT?

>> WE'RE NOT IN KANSAS ANYMORE.

>> Jon: NO, I KNOW.

I KNOW.

>> SO THAT'S THE PARTYPRIMARIES.

AND A THIRD THING, I THINK THATOUGHT TO BE DONE IS WE OUGHT TO

INSIST ON THE ASSESSMENT OFPOLICIES BEFORE THEY ARE

IMPLEMENTED.

DO THE ANALYSIS THAT ISREQUIRED.

>> Jon: COULDN'T THERE BE ANUNFORESEEN CIRCUMSTANCE THERE?

YOU KNOW, AGAIN, ASA COMPANY WOULD COMPLAIN

ABOUT ALL THE TRIALS THEY HAVETO GO

TO TO GET A MEDICINE, DOESN'TTHAT AGAIN JUST EMPOWER A SYSTEM

THAT YOU BELIEVE IS UNEFFICIENTTO TACK ON ANOTHER INEFFICIENT

PERIOD. THAT PRE-STUDY PERIODWILL BE POLLUTED BY PARTISAN

POLITICS, IT WILL BEPOLLUTED BY LOBBYISTS,

IT WILL BE POLLUTEDBY CORRUPTION.

IS THERE A WAY TO GET OURCONGRESSIONAL OFFICIALS MORE

FOCUSED ON NOT JUST WRITING THELAWS BUT THINKING ABOUT THEIR

IMPLEMENTATION?

>> WELL, THEY NEED TO READ BOOKSLIKE THIS.

>> Jon: WHICH THIS IS WHAT IKEEP SAYING.

>> YEAH. THEY WON'T READ IT BUTTHEIR STAFF MIGHT READ IT AND

THE STAFF FEEDS IDEAS TOPOLITICIANS.

>> Jon: HAVE YOU MET WITHPOLITICIANS? ARE YOU SOMEONE

THAT IS IN THEIR EAR? DO THEYEVER COME TO YOU

TO TALK ABOUT THISTYPE OF THING?

>> NO. BUT I'D RATHERTALK TO YOU ANYWAY.

>> Jon: THAT'S WHAT I'MTALKING ABOUT.

IT'S A FASCINATING DISCUSSION.I'VE BEEN STUNNED, YOU KNOW,

IT WAS VERY INTERESTING WE HADON SPEAKER PELOSI, WE WERE

TALKING ABOUT, I THOUGHT I WASBRINGING UP A VERY, A SUBJECT

WITH NO CONTROVERSY THAT THERE'STREMENDOUS CORRUPTION WITHIN

OUR CONGRESSIONAL SYSTEM OF YOUKNOW, REVOLVING DOOR TO

LOBBYISTS THAT GO BACK FROMCONGRESS AND CONGRESSIONAL

OFFICES AND BACK AND FORTH.THE FACT THAT THE VOCAL RULES

STARTED OUT AS A PAGE AND ENDEDUP, AS YOU TOLD ME BACKSTAGE,

980 PAGES FILLED WITHCARVE-OUTS, SOME OF WHICH NOW

YOU ARE TELLING ME HAD TO BEPULLED BACK BECAUSE IT TURNED

OUT THEY WERE HURTING SMALLBANKS.

BUT HER RESPONSE WAS REALLYSTUNNING TO ME WHICH WAS YEAH,

NO, THERE'S NONE OF THAT?

>> REALLY?

>> Jon: OH, DUDE. IT WAS,

LIKE MY JAW KIND OF DROPPED.

I THOUGHT -- IT WAS TWO PEOPLEHAVING A VERY DEPARTMENT

CONVERSATION WITH EACH OTHER.

>> IT HELPS TO BE REPRESENTINGSAN FRANCISCO.

>> Jon: HEY! COME ON NOW.

IT'S A BEAUTIFUL --

>> I'M LIVING THERE RIGHT NOW.

>> Jon: OH IS THAT REALLY TRUE?

>> IT'S GORGEOUS. BUT NANCYPELOSI --

>> Jon: DON'T TELL ME WE FLEWYOU IN? DID WE FLY YOU IN?

>> YOU DIDN'T PAY FOR IT.>> Jon: WE DIDN'T?

>> YOU DIDN'T PAY FOR IT.>> Jon: BASIC CABLE BABY.

>> BUT ANYWAY, SHE HAS A SAFESEAT. HER SEAT COULD HARDLY

BE SAFER. SO SHE DOESN'T HAVE TOWORRY ABOUT BEING REELECTED AND

SHE CAN SAY WHATEVER SHEWANTS.

>> Jon: SHE TRULY SEEMED TOBELIEVE THAT THE FACT THAT THAT

WENT FROM ONE PAGE TO 980 PAGESWAS THE WAY THE SYSTEM IS

SUPPOSED TO WORK.

THAT WAS THE THING THAT STRUCKME.

>> I DON'T KNOW WHAT GOES ON INHER HEAD.

[LAUGHTER]>> Jon: I'M NOT SAYING

NOTHING.

[ LAUGHTER ]WHY GOVERNMENT FAILS SO OFTEN IS

ON THE BOOKSHELVES NOW.

PETER SCHUCK.

THANK YOU VERY MUCH FOR COMINGBY.

[CHEERS AND APPLAUSE]