Separation of powers, the legislative power clause of the constitution giving Congress Power to make laws, the story behind that, why we didnt want a king, and how the system of government was set up, how we stood up and proposed we have a king and the Founding Fathers objected to this idea, soundly rejected it. Too much power in one person or group of people in the drift away from separation of powers is something incompatible not just with the constitution itself but stories behind it. Booktv wants to know what you are reading. Tweet of your answer at booktv or posted on our facebook change, facebook. Com booktv. [inaudible conversations] good evening, everyone. I direct Foreign Policy institute and im delighted to welcome you to this evenings Foreign Policy institute conversation with Michele Wucker, she produced an excellent book, the gray rhino how to recognize and act on the obvious dangers we ignore. It is wonderful to welcome michelle, i am grateful to her for putting the site as a stop on her book tour. I had the pleasure of traveling with michelle, and heard about this book, been anticipating it and it is an exciting read. Asking the question why we ignore crises we can see coming until they literally stampede us, a new paradigm, excited to hear her ideas this evening. This book follows two others, haitians and dominicans, i didnt realize you were the author of that exclusively written book and a marvelous book on immigration asked why we get immigration so wrong even though our prosperity depends on getting it right, she is a prolific writer, had a distinguished career in journalism and also received numerous awards for her leadership including Global Leaders awards are World Economic forum and she has been recognized, as the president of World Policy Institute and other leadership roles. Leading our conversation this evening, doctor jeff leonard is the ceo of the Global Environment fund which is a private equity fund that invests in growth companies, Renewable Energy and environmental cleanup as well as energy efficiency, he is chairman of a number of boards including the board of the washington monthly, he served on the board of new america and he is himself a prolific writer who has produced 5 books including the struggle for the world products, we are grateful to have him lead the conversation this evening and hope all of you will stay and at the end of their discussion and q and a we have a raffle and raffle off some books the publisher was kind enough to make available, she will sign books and hope you will enjoy the reception and discuss the ideas we are going to talk about this evening, so welcome. Thank you, everyone, for coming. It is great for me as a washington person to be here. A number of people, especially people who have done finance programs here because the worldliness and precision is what we really need to have a big policy picture and the ability to deal with serious financial skills. I was very fortunate because i have been able to as an idol friend of michelles we get together periodically in the mail often about ideas so i have been able to be present since the early parts of the gestation of this book and it is very exciting. It is an extraordinarily wellwritten book. I dont usually say that about policy books or books like this. It is very well written. It unfolds in so many profound layers and we only scratch the surface of the gray rhino how to recognize and act on the obvious dangers we ignore in our conversation. We keep it to foreignpolicy but the book itself, the richest parts of the book are on corporate behavior and domestic policy and individual behavior in political settings and so on. It will be fun, we will elicit ideas how to apply this in foreignpolicy. The concept i will let michelle do fine for you and tell us how she found her way to it. I want to say 30 something years ago as a graduate student i was traveling in what was then yugoslavia and kept a journal, i was studying Political Economic systems and wanted to understand socialist economics and what was going on in socialist system so travel all over yugoslavia, i kept a journal, i rose prolifically about it, articles and so on but one thing stands out in that journal, everybody i talked to hates everyone else. I said this country is going to blow skyhigh when tito dies. Anybody who was present there could see, could feel this was a country held together by the force of one man but 1980, he died, we had bosnia, all these horrors and terrible situations but that gray rhino was so apparent yet nobody talked about it. To me that is the opinion me of what michelle is going to talk about today so i want to start with you telling us about the gray rhino and tell us how you found it. He is quite an accomplished writer himself so thank you for that. It has a big horn, really dangerous, think of the elephant in the room, the big obvious thing nobody wants to talk about and we take for granted nobody is going to do anything about but is standing still, you get the elephant in the room together with the black swan, a book that came out 10 years ago, the we needed to pay more attention to highly improbable, unpredictable high impact events that as an individual it is hard to predict but as a group, much more than we think, get the elephant in the room together with the black swan and the love child is the gray rhino, something that is highly probable, predictable, within reason, you might not know every detail but it is going to happen, it is a matter of when, not if, unless somebody some does Something Big and dramatic to deal with it but it is not getting the attention it needs. Might not mean that it is completely ignored but it is certainly not being dealt with properly, not resolved. The way i came to the rhino was looking at sovereign debt crises. I was a financial journalist writing about emerging market, fascinated by argentina and many of you remember in 2001, a pretty dramatic falling apart, 9 months before that a proposal went around wall street, very smart bankers and academics saw the direction things are going, there was no way argentina could pay its debt if they kept going the same direction so heres a proposal, lets write down 30 of this debt and that is what it will take to turn the situation around. Argentina wanted to save face, banks were doing crazy restructurings that were very expensive and not solving the problem. 9 months later argentina collapsed and the banks lost 70 of face value, the idea of 30 versus 70 with a clear example of a stitch in time saves 9. Fast forward 10 years to 2011, Michele Wucker is having the same dynamic happenings and in this case threatens the European Union. I wrote a paper about that for the new America Foundation saying Michele Wucker can learn from argentina and if you dont the consequences will be bad and it went down to the last minute and they were halfway off the cliff and people got together and pulled them off the edge. They came to an agreement that was not perfect and not everything was solved but it helped keep Michele Wucker from defaulting and helped the European Union from falling apart. I started asking myself what is the difference between Michele Wucker and argentina, people who see this big scary thing coming at the man do something, and the ones who dont . You say it is not about weak signals. In both those cases the signals were there. It is about weak action to the signals and that is one way to distinguish a gray rhino from a black swan. There is one paragraph, after you defined it, where you say the biggest intractable challenges we face in the world today are gray rhinos, Climate Change, unsustainable debt levels, anemic rates, labor market dynamics, youth unemployment, on and on, we know of course a theory that explains everything cant explain anything. I want you to help since this is early in the book, the rest of the book describes why it doesnt explain everything but take us through the broad stages of recognizing and dealing with a gray rhino crisis and also help me because theres a great point where you say behind every black swan is a crash of gray rhinos. I read the part of the book that set a rhino group is called a crash. So why is a crash of gray rhinos behind every black swan and how do you recognize a black swan, distinguish it and cope with it . When you see a lot of obvious things coming together, when they meet you might not predict exactly how they meet or what the consequences are, but it is a combination of predictable things, the 2008 financial crisis is a classic example of that. The subprime crisis, questionable use of derivatives, loose supervision of banks, reckless behavior and a lot of warnings, a few months before everything went down, christine the guard said we are facing a financial tsunami. If you do a nexus search of news stories at the time and references to prime mortgages, credit default swaps, it is pretty clear we saw it coming despite what so many people said in hindsight. The black swan had come out and everyone was talking black swan, financial crisis, this is a black swan, nobody saw it coming even though everybody did. They misused the concept a little bit because it is improbable and unpredictable so the minute you actually see it coming, imagine it happening it is not a black swan anymore but on the flipside using perfectly opposite logic you had people after something happened who said that was a black swan, perfectly unpredictable, unforeseeable, 2008 really was a crash of gray rhinos, people who saw lots of elements of that happening didnt quite have a sense of how extensive the damage would be but a lot of people knew it wasnt going to be good. I was living in new york city at the time and had an apartment i bought a few years earlier and it almost doubled in value, a very small example but i sold my apartment and some other people may too much bigger bets that things were not going to go the direction they were. It is as if people in the beginning stage, you talk about denial and a modeling phase, sometimes people dont want to admit it, or how institutions systematically fail or dont allow people to call these things to their attention and one example is so striking about 2008, the chairman of the board of emerging markets, my board was filled with the smartest investor people on the planet and we had off the record dinner, washington dc, with the chief economist of Standard Poors in 2007 and some of the people on the board behind closed doors were going what is in this . They poll a read him the whole night and the guy said honestly we dont know. We are as worried as you are. All these comments, these institutions were praying it would go away. We are praying it is going to turn the other way and not come our way but sooner or later you have to reach the stage that you respond and deal with it. How did that unfold the we tried to deal with it . The s p example is a good one. A lot of people didnt know what was going on. There were a lot of journalists who wrote about things. This denial is interesting, it is the first stage. The first thing i did is find a copy of Elizabeth Cooper russells book on death and dying. Everybody knows the 5 stages of grief. She said it should be a temporary phase, it is protective, gives you enough of a cushion that you start absorbing what happens, you absorb it all at once it is too much of people will break down. That was interesting to me. Some of the psychological mechanisms humans have for dealing with problems are that denial but we also set up decisionmaking systems and there are some unconscious things we do, i spent a lot of time looking at denial and the biases we have the get in the way. One of the biggest ones has to do with decisionmaking structures we set up, groupthink. When you get a lot of people who are similar, have similar perspectives, whatever measure of similarity you want to use, when one person says something it is much more likely you will see all the heads not all the way around the table and it becomes difficult to Say Something that is not what people want to hear. That is certainly something that happens in markets. We are very tempted to think the party will keep going on and no one will take the punch bowl away but it is inevitable. Looking at financial crises, people who made this proposal on argentina in 2001 were fans of his, anyone who had ever read this had to have recognized that. We released his classic book recently, the first stage is denial. There are other reasons, people take advantage of this human tendency towards denial, things we dont want to hear, see no evil, hear no evil, speak no evil monkeys, the ostrich with the head in the sand, this wonderful menagerie hanging out with gray rhinos and black swans but once you go, realize people are susceptible to it you can manipulate that, look at the tobacco companies, the testimonies coming out about the Oil Companies that new very well what was going to happen and concealed that. There is a certain manufactured denial we can take advantage of or be aware of and question actively why are we denying it. And wishful thinking. It is better for me to fess up. Very much. Our culture is like that. Look at income equality and the people who look up at certain candidates, millionaires, billionaires and wealthy businesspeople, debates over taxes, debates over trying to address the problem of income any quality which is affecting growth which is helping create a poisonous Political Climate we havent a lot of people dont want to make the hard decisions, even people who benefit from them, i could have a big shiny building with my name on it. Use sites one of my old professors when you say the crisis takes longer in coming than you think and happens faster than you think and this is a challenge in markets and financial markets. I could never be Hedge Fund Manager because there are so many times i am right, it takes three years to be right. We went to investors in private equity and we said we think the stock market is completely and totally overvalued, two years or three years later they were saying the publicprivate markets by 280 basis points every year and we were sure but it was too early. How do you deal with that . You arrive and see this crisis so early but others dont or are not ready to act or institutions are not ready to hear you like we have heard so many stories from 2008. It is very common and it is a matter of when but exactly when that is a little niggling devil on your shoulder. You need to understand the later phases of a gray rhino, start with denial. I was so inspired by the book, maybe i could have 5 stages too and it worked out well that way. The second stage is muddling, like everyone is saying this is a problem but they come up with all sorts of reasons not to do anything about it. The stage after that i call diagnosing but you can think of it as blaming or bargaining, what do you do . Making sure you have the right solutions. The fourth stage is panic. A time when the rhino is on top of you and it is a doubleedged sword. On the one hand you are more likely to make bad decisions, we see that often in financial crises and economic crises, no one wants to cut the budget, no one wants to be responsible and it is on the way down they want to cut the budget and create the Snowball Effect and it gets worse and worse. The final stage is action. When you do something action happens in such a way that a group of people start acting and you create a ripple effect. How do you get these leaders and influencers that it is in their interests to do something, to make the hard decisions. That is a great transition, the biggest Inconvenient Truth of all, the biggest elephant in the room is Climate Change. I say that because 20 years or more into the diagnosis and so on i remember taking a course at harvard in the 1970s, talking about Climate Change and the greenhouse effect and so on, here we are, this year we have this on your mental set of agreements so how do you see where we are with Climate Change and where we are going in coming years in the theme of your framework . Climate change is an example of all 5 stages, the number of people in denial is shrinking after many years of very hard work by many people, you hear muddling, what do we do, what dont we do, some of the diagnosing questions become wild, we will see the clouds, technology will solve everything, some technologies can. There is one in the book that blue me away, the conversation i moderated a couple years ago where the company that created something to literally create plastic out of the air. If you like technology, it is Carbon Capture technology on top of the smokestacks, how i imagine it though this is not exactly what happened and they shoot some enzymes at it, they use it in a lot of smart phones, something that takes the carbon out and turns it into something good and saves whatever carbon might be produced otherwise. Look at the renewable technologies, lots of interesting things going on. When i was in emirates last october they were doing interesting things with clean energy and you see a lot of them across the middle east, a couple weeks ago morocco and solar power, there are things that can be done but at the same time you have huge subsidies of the fossil fuel industry, you are seeing the extent of the efforts they made to perpetuate denial and not seeing enough of a sense of the risks Climate Change is posing to those companies though the changes we have seen in oil prices over the last year are in some part due to the changing technologies, lots of factors in that as well but you are seeing action, some of the dramatic numbers and facts over the last few years, the crazy reseeding of arctic ice, look at those maps and it reminds me of the painting, the highest temperatures on record, violent storms and every time they happen you get predictions of the rising sea levels, it is getting harder to ignore and the more people are affected personally by at the more impetus you get for change. Amazing we finally got the report on Climate Change but i dont know anybody who thinks it was enough. I dont know anyone who thinks it is going to be implement it fully so that is a cautionary tale. And most cases of action a day late, dollar short, never quite as far as it ought to be. In my lifetime we have tried to fight a rearguard action when you think of environmental problems and related things. You cite a number of examples in the book about companies that have taken a leapfrog approach the fighting rearguard action for environmental problems but realizing by addressing new technologies that make business more efficient or allow them to morph completely and avoid a gray rhino of obsolescence, i thought about that and in the corporate sector, what it takes is a group of ceos to talk about these things, share their leadership and almost competing with each other, you talk a little bit about the emergence of china and the us seeming to set a longterm agenda for leadership in Climate Change, is that analogous to what you see in corporate sectors where pepsi and coke on sustainability issues and so on . You have to see countries working together, i have all sorts of arguments with a friend who is fun to argue with who might be here tonight but i remember arguing with him once about suvs, i wont stop driving my suv because no matter what i do china is building a new coal plant every day and there is no point, this helplessness worrying about what the other guy is going to do is a real issue so you get countries worried about competitiveness, people feeling they are going to fall behind. One of the solutions is the idea of transparency and one of the things that came out was the discussion of who will hold countries accountable for how closely they meet these targets and when you count something it is easier to do something about it. It really helps but as it becomes harder and harder to hide this, as it becomes harder to get away with doing things, we have social media, outreach, people becoming more vocal on these things it becomes much harder to avoid so the shining light of transparency on what is happening is incredibly important in china had pressure from outside the United States but also a lot of pressure from inside. Videos going around about pollution in china, they were being heard. I have invested in china and we invested in companies in food chains trying to keep it from being poisons dealing with air pollution and Water Pollution but one thing we saw in the secondary cities, starting 5 or 7 years ago was huge demonstrations and civil disobedience in effect relating around Environmental Concerns before the tibetans or other things in china. One of the interviews was peggy lou who helps promote us chinese cooperation on clean energy and these very elaborate facemasks, her facebook profile has a picture of her where she wears the mask beautifully embroidered, she is very passionate about this and says if you cant have air that people breathe, she had to evacuate her kids sometimes and i downloaded the air quality index apps, and was amazed being able to count the air quality index and Say Something about it. Big picture foreignpolicy concepts, lets talk about how we can apply when we open up the questions to stimulate the issues we talk about, one interesting thing, you went i took my two boys many years ago to south africa and i have a picture of our jeep right behind a rhino walking down the road and it was marking its territory and that stinks. It seems to me in some respects sometimes you have to have some pretty stinky things associated with the gray rhino situation. We all remember the concept, effectively by doing a deal with the devil, the afghan he mujahedin we created Osama Bin Laden and the circumstances, we call that blowback. In covered areas there is a blowback of the cia operation. We had to do what stalin did to defeat hitler and many issues in our foreignpolicy. It is almost like dealing with one rhino crisis sometimes you have a baby rhino and the next generation comes back. Very much so. I think situations like this with clashing questions of rhinos and situations where people define it differently but the quagmire, a gordian knot in terms of how hard it is to unpack, you have russia and the United States defining the nature of the threat and the solution and the problem in extremely different ways so that tells you how important it is to find ways to align the stakeholders which is easier said than done. There are camps who say Bashar Alassad is the problem, the only one who can bring order to diametrically opposed ideas, look at the debates over Interest Rates and quantitative easing, led to a number of speculative bubbles in the market that have a lot of people thinking in 2008 but on the other side economic growth, the imf numbers are not very cheery so you have two completely, seemingly butting heads, dont want to get too heavy with the metaphors but deciding what is the biggest problem there are times you have to trade one problem for the other, this one i am going to let it go. Your book i preordered it from amazon and it came two days ago and it was right at the time i went to see the new movie eye in the sky which is about drones and the moral dilemmas of drone usage, stunning movie for me that really hit home but it made me think as i was reading your book, your concept, almost like rational selfinterest, companies can use it to see their rational selfinterest but what about making moral judgments where the judgment is one Collateral Damage is perfectly fine by United States policy but you get to know this girl in the movie and you are sitting there realizing she is the Collateral Damage of this drone strike you are at the horns of a dilemma, how can we apply gray rhino thinking to moral issues . It is very tough. At one point i talk about the trolley problem, the dilemma between the trolley or train coming down the track and it is going to run over 6 people in the question is do you flip a switch that runs over one person instead of 6 people and it is that active behavior people have so much trouble with. There were going to be 80 faceless People Killed by the bombers but one girl you had gotten to know in the movie would be killed if they did this strike. That speaks so much to the importance of emotion in policymaking and other decisionmaking. I am perfectly happy to walk out with as many numbers and analysis. I like the rational approach to things but i know that is irrational because it is not how people react to things. You think about the tragic photo of the little boy on the beach, the tremendous reaction to that, and it was really heartrending to see that or you look at the reaction people have to the People Killed in the terrorist attacks in paris, brussels and the tremendous reaction there, not as much to the deaths of the same number of people in places westerners did not have as many connections with or much more regular attacks, the more attacks there are the more they lose their emotional resonance. I think it speaks to a real balance in policymaking. Are these lives worth more than those lives . It is not an easy decision. You have constituents to answer to. There are going to be tradeoffs and they are going to be harder to make when there are emotional decisions to be made. Talking about argentina and Michele Wucker and greece. A little bit of nationalism or racism involved because greece was a country in our union that we knew. Argentina, the western bankers against them in a way. Is there some of that . It has to do more with the interconnections that greece was so tied in with the european ideal and argentina was down in south america somewhere. I wanted to get you talk about engagement, the guys saying how did greece engage . And i thought about the people my ceo at new america and others who talked about the power of foreignpolicy and in a sense that is analogous to solving gray rhino problems, people get together and talk about cases and legislators talk about things and that ties up the United States more and more into a system. We facilitated china and other countries getting into World Trade Organization and that box them china is a reserve currency, they are locked more into the world. Is that an example of gray rhino evolution and problemsolving . Engagement . Gradualism is important, the way change happens, as romantic as the ideal of a big revolution is in many cases it is stepbystep but the engagement and the ties you create different tradeoffs and different emotional associations. It is funny, the title gray, i didnt come up with it intending nuances but that is a good additional icing on the cake, the way the metaphor works, came from the black rhinos and white inos and when i came up with the rhino image talking to a friend, it is coming at you, a black swan joke, a black rhino and i thought wait a minute, there is such a thing as a black rhino and there is such a thing as a white rhino too, something so obvious in front of you and the premise of the black swan is you cant picture a black swan because it doesnt exist, you cant picture it because there is it is about nuance. The gray swan was called a bazaar so many in the talk i did at javas i was paired up with william plato, fantastic Japanese Technology and Crisis Management expert who had me on, you can have so much fun but it is quite serious and there is a reason we pick animals that have so many powerful animal images. My friends tease me, the cockfight and other rhinos, it is coincidence but it is not and we can see things that help us see more clearly what we are doing. Maybe we should take a few questions. I would urge everyone to read the book. It is a lot of fun to read and it is a lot more detailed, one whole page diagnosing which kinds of rhino it is, a dead cat bounce rhino. You have broken it down to show the different permutations and how to diagnose and that leads to how you try to solve it whether you confronted or run from it or slide out of the way but do you have anything else you want to say before you open up . The questions you ask yourself about, the most important thing to start out with, what are my top three rhinos, whether it is in the company, what is your top rhino at work or your top personal rhino or your top rhino in the world as a citizen on the planet you get one of each because if you have too many it is complicated. You got to prioritize but the question you ask yourself when prioritizing which one to go after, is this something i know how to solve. But i thought one of best examples of gray rhino, positive gray rhino thinking long term was in the last couple of weeks when saudi arabia announced theyre creating a 2 trillion fund to bridge over the postoil era for them both in two ways. One, the postera of revenue from oil, but second of all, the Energy Transition they will need to make in the desert. Very much so. So seemed to me that was a perfect example. Very much so. Youve probably conducted seminars [laughter] have not, have not been there, been there yet. But you know, you want to i think its probably a good idea if you just gave us your name briefly. [inaudible] from the Foreign Policy institute at sais. Its great to have you here, michelle, and congratulations on the book. Its a great way of looking at the world. When you look at, you know, were here in the United States in an election season, and id like you to, id like you to reflect on whether you think the rise of donald trump is a gray rhino or a black swan. [laughter] number one. And number two, what are some of the biggest gray rhinos you see here in the United States . Sure. Thats a great question. And i cant if i had a nickel for every time i got [laughter] sorry, i got asked that question. Its something ive been giving a lot of thought to. For me, the idea of a reality tv star could become a leader in the primaries, that, i think, is really a black swan. But the, i also very much see him as a gray rhino. But its, i feel like trump is the embodiment of several other gray rhinos that are behind him. The inequality issue which a couple years ago was top on the World Economic forums global risk reports list of global risks, and weve heard a lot about it. Thomas pikettys bestseller on inequality, its gotten a lot of lip service, but i havent seen much, if any, progress at dealing with it. And weve possibly even gone backwards on that. And you see trumps message, you see Bernie Sanders message, you see the rise of populist movements in the u. S. And europe as, i think, very closely tied to our failure to address the inequality gray rhino. The other part is what i see very much as a crisis of agency, a feeling of powerlessness. Its a theme you hear often among some of the people interviewed about why they support trump, why they support sanders. And the way that theyre eager to reach out and embrace someone who says, yeah, im going to solve it with great certainty but little detail as to how its actually going to happen. Its, on a certain level it comes back to, you know, magical thinking. One of the examples from the book is from the movie mars attacks, which i loved. Kind of i try to be wacky and not totally serious all the time. Its not easy. But, you know, these martians come down, and theyve got these fish bowls on their heads, and theyre green, and theyre taking over the country and the world, and they go way out into the desert somewhere, and theres a little granny listening to the radio, and theyre about to come and eat the granny. And this slim pickens song comes on the radio, and it turns out thats the magic thing that makes the little green martian heads explode merchandise the fish bowls inside the fish bowls. But its this idea of magic thinking. Someone has a magical solution. One of the points of the book is its a lot harder than that, and its not easy. So i think the combination of the feeling of powerlessness to influence government, to make change happen, and that powerlessness is particularly powerful, you know . Sarah palin calls it, oh, well, that hopeychangey stuff. But i think when obama came in at the beginning, there was so much enthusiasm and raised hopes, i looked at that, and i said, you know, ive seen this in latin america before. This charismatic leader comes in, hopes are risen, hopes are dashed. And also i think social media is playing into that in a very interesting way which we havent begun to really see the effect of. You have people come out, they feel like they have a voice on social media, they can say things in certain ways. But theres a disconnect between what people are saying and what the government is doing. Were at a time when, certainly, in the u. S. The government is paralyzed. Its extremely polarized. The, you know, primaries are increasingly nasty. Theres this just lack of civility. And those, i think, are the bigger gray rhinos. I think, you know, trumps kind of a baby rhino or rhino with orange hair or something, whatever you want to do with it. [laughter] these things are so big and heavy and scary, and i dont at all want to make light of them. But i also feel like you need to have some sort of levity in the discussion. You have to have a way to step back sometimes and say, hey, this is not impossible. Without being a pollyanna, i think that you need to be able to say, yes, there are things we can do. Right. You know, youre citing that issue of politicians sort of giving hope where there isnt a solution yet. Dont forget thats a Foreign Policy failure here in this country on two occasions. One, arab spring. I mean, obama went to egypt and said it, and i remember a tunisian friend of mine just last year when i was there after their revolution had been stunted and crotched really said you told us it was okay, and youre not there with us now. And similarly, the line in the sand in syria with obama. I think people saying from a Foreign Policy perspective, that may have done more damage to our credibility. Absolutely. Those are both the examples i think of like letting the rhino out before youre ready to solve the problem. Just letting it run around instead of dealing with it. Yeah, absolutely. Hi. Hi. Congratulations on your book. Thank you. I guess they know who i am, but you dont [inaudible] i dont think this is working, but yeah, it is. It is . Okay. Speaking of [inaudible] we are one week from the anniversary of the gulf oil spill, sixth anniversary of the gulf oil spill. And i just did a Huffington Post blog on im probably going to get some Rotten Tomatoes thrown at me for saying this, but the gifts of the oil spill. Id to like for you to respond to this. Because in some ways it sped up action. What id like you to talk about is how your principles that you wrote about in gray rhino, how we can speed this up. Because what happened with the oil spill, it increased investment 32 right out of the bat, everybody went up. Now were at 329 billion in investment in clean energy. We have the Environmental Movement got tailwinds, 37 states, four territories now have Renewable Energy standards and goals. I mean, it was just like, boom, it was a hockey stick. So we hate it. Eleven people lost their lives, you know . 600 square miles of gooey crap on animals. Theres science coming out of it, research coming out of it. So how do you use a stink key event to speed up stinky event to speed up action . And, frankly, this wont surprise you because you know me, but where does diversity come in to helping speed that up . Two issues she does deal with. [laughter] exactly. Well, one of the points, and im certainly not the first person whos ever said this, but the crisis is a terrible thing to waste. Right. And there are lots of cases in which we can use a crisis to create positive change. And in many cases, the positive change that happens is after a big mess. After the Great Depression you get glasssteigel. One of the chapters of the book is set in calgary after the 2013 floods and looking at how that was prompting some resilience measures and some real thinking about probabilities of future floods and what to do about it. The panic stage in the book is really a doubleedged sword. Its either a place where you make very bad decisions, or its the time that pushes action. And im really glad to see the Silver Lining coming out of what happened in the gulf oil spill. You know, that said, it can be extremely dangerous to try to accelerate things. An example from pop culture thats also in the book is greys anatomy which is one of my favorite tv shows. My sisters completely addicted. But in one of the early seasons, there was a whole plot line around a patient who had a heart problem. It wasnt bad enough to get on the transplant list, but everybody loved him, and one of the interns was in love with him. So she, you know, fiddled with the machines in such a way that his heart immediately became bad enough to get higher on the transplant list. And, of course, because this is a, you know, drama soap opera, they had him, you know, all ready to have the surgery, but the surgeon who was supposed to do it got shot in an attack, and the surgery couldnt happen, and he died. So that was an example of, obviously, a madeup example, but of how dangerous it can be to try to push something forward. But at the same time, i think that there are some situations where there are choices to be made. I mean, sometimes people try to muddle through, they try to hide how bad the situation is. And so i think that shining some light on and letting people see how bad a situation is, you know, might be a more benign way of doing that. And i think that were starting to see more and more of that with some of the ways that Digital Media can bring, you know, on the corporate level and the panama papers, for example. Thats a way of really saying this is a problem thats happening that we need to do something about. Diversity, because you do talk about oh, diversity. Sorry, yes. Diversity, you know, its sort of, its one of the things i call a metarhino. Its a problem that affects other situations. And it goes right back to group think. And Decision Making. If you dont want to hear about a problem, if you dont want to hear that it exists, youre not going to. And you look at the very, very small numbers of women on corporate boards in, you know, as ceos in corporate leadership positions, and its not just women, its anyone with a different perspective. You know, the fact that theres not as much inclusion of people who can raise red flags, women have very, very different tolerances for risk. So i think its, its a huge risk not to have diversity in the decisionmaking process. And across companies, governments, whatever organizations to not make sure that theres a way for people to raise a red flag. Go ahead. Hi. My names [inaudible] this is my first event at sais, and its wonderful. Thank you very much. I wanted to talk a little bit, it seems like this is a cheat sheet for problem solving really tough problems. And, you know, its factbased, its rational, and it really serves prague pragmatists. You mentioned a little bit about data, you pointed to your risks, the aqi in china where i spent some time in beijing, its pretty rough. But whether its domestic or international, i see ideology and personal narratives really obstructing problem solving. And so, you know, specifically in todays world im a millennial, but i feel like were inundated with data. And in beijing if i look at the embassys aqi, that tends to be much higher than what the communist Chinese Party is going to tell you is the real number. Everyone has data, but am i looking at parts per million in 2. 5 micrometers or ten, and which ones going to cause cancer, so on and so forth. How do we start parsing the data to really achieve consensus . Thats a fantastic, fantastic question, and i totally agree with you on ideology getting in the way and the, you know, you look at data, and you go back to mark twain. And, or you know, his ideas about lives, darn lives and statistics. And, you know, i think finding the right data, and theres so much data, its sorting out data so that you dont just have a, you know, a haystack and a needle. Theres some people doing very interesting work on that, you know, dana boyd has got a whole institute on data and society. I dont pretend to have the answers to that. But one of the things that im really hoping that the gray rhino can help do is bring together people with different areas of expertise and help them to identify the gray rhinos, you know, in their industry, in their field and to work together. The gray rhino on some levels is, you know, its very simple. Its, you know, ask yourself what the gray rhino is, and everybodys going to have their own take on that. And i want that to happen. I really welcome that. I think its a conversation, and its something that people can interpret very, very personally. And i also actually, you know, think that ideology is a metagray rhino, although im somewhat skeptical as to how possible it is to have absolutely no ideology. But generally, you know, isms and ists make me very uncomfortable. Even, you know, on a certain level pragmatism, you know . Realizing that that there are limits to that. But i think people are often not aware enough of how the ideological masks theyre wearing color the way they see a problem. And i think being able to ask yourself, okay, inflation, for example. If youve got a certain view on inflation, youre not going to see the Interest Rates debate similarly. And i think its a matter of asking yourself do you have a is your goal specific, and is it measurable, is it outcomebased, or is it ideological . So thats youve raised so many great points, we could have a whole other hour discussion on this. The other point about it is the business culture, for example, with the cigarettes for so many years and showing that, you know, everybody we just knew how harmful it was, and yet we all didnt admit it. Yeah. Thank you oh, i think hes got a microphone coming. [laughter] thank you again more coming. Its been such a wonderful discussion. Im Carla Freeman from the Foreign Policy institute. You alluded to this a couple of times. You mentioned leadership and the role of leaders in this process including the audacity of raising hopes. How did your thinking about the gray rhino phenomenon make you reflect on leadership and what it means to be a good or effective leader . Thats a great question. I love that. One of the conclusions was not a very happy one, unfortunately. But its really that leadership sometimes means, you know, being aware that youre going to take a fall for doing the right thing. Joan of arc, you know . Saves france, gets burned at the stake. Yea. You know, youre not always going to, that youre not always going to get credit for things. Another part of it really has to do with listening. It goes back to the Decision Making and diversity part of the conversation. Its been very interesting. At a couple of talks that ive given, people have and ive spoken to both highlevel groups but also to people who are getting their job done. And they said what, when we see a problem, what can we do to make sure that the people up top with the power to allow change to happen, how do we get them onboard with it . And thats a very different one. But it speaks to leadership really being the ability to hear things that you dont want to hear, to hear things from a broad set of people from all Different Levels in the company, from all different perspectives. And i think of, you know, of not considering yourself to be infallible. It very much is about leadership. You know, a leader being willing to say this is big, this is in front of me, and i dont have a handle on it. [inaudible] im still trying a little bit how we would apply this thinking. If i sort of play dells advocate devils advocate, we have this question that we identify as one or many huge problems that we know are coming, and then we have to decide whether were going to act or not. My question is, what if we act too soon, right . I mean, look at the case, for example, germany. They pent a huge amount of spent a huge amount of money to try to fight Climate Change, and if theyd waited a little wit, it would been a lot cheaper. When it becomes a crisis, it becomes cheaper to respond to the crisis, at least psychologically. I guess from the devils advocate perspective, how do we know if were addressing gray rhinos because we feel like we should, and how do we know if were actually ignoring them because there are more pertinent things right now . Its a great question. And it goes alongside with the, you know, how do you know if youre dealing with, you know, with a threat just because its there . How do you sort them out, how do you prioritize. Obviously, theres no easy answer and certainly not one that fits in between the covers of the book. One of the things i was trying to do was harness some of the intellectual energy that the black swan did. I just, i looked at so many people going, oh, theres a black swan. I mean, if you do i dont even know what the search count would be or a Google Search for how many mentions of black swan. And even though people were a little misguided in their interpretation of it, i just felt the focus was in the wrong place. There are not easy answers, i dont pretend to say that there are. In terms of costs of responding, theres a bit of a paradox in sort of, you know, financial terms or, you know, energy, whatever measure you want to use. It often is much more expensive to respond at the last minute. Your options generally narrow quite dramatically. Judith roden in a lot of work on her research has showed quite extensively how much return you get if you invest in prevention, in resilience. Its avoided costs which we dont account for properly. But, you know, for example, when i went to minnesota to the memorial for the bridge that had collapsed there, i looked and i dont have the exact numbers off the top of my head, but theyre in the book on how much more it cost to rebuild the bridge quickly on no notice plus the loss of lives, the lost commuting times, the lost business, all of that, and its a problem thats common to infrastructure. I think theres Something Like 80,000 bridges that need to be fixed. And it becomes this longterm versus shortterm cost calculation saying, hey, im sorry, we dont have any money in the budget right now to deal with this. Weve got to deal with many much more with this much more urgent thing. And then, of course, when something falls apart because you havent dealt with it early on, that only creates more of a vicious spiral. And so i think we need to think somewhat differently about how we account for things in policy making, to look harder at avoided costs. The other question is that when theres a crisis, there somehow often are these magical pools of money from, you know, federal Disaster Funds and blah, blah, blah. What if we were to instead, you know, shrink the federal Disaster Fund pool and reallocate some of that towards prevention . And with aid in other countries as well. Steven covey has this really great tool out of seven habits of highly effective leaders, he has this little grid. You know, its is this urgent, is this important. He points out how much time we spend in the urgent category whether or not its important. So there are some things, i think, that you do need to just let go. Say, you know what . This is it. In business sometimes thats called creative destruction. And it can be a very good thing. You want to cushion the people who are affected by it as much as you can. But find ways to allocate more time, more budget, more energy, more priority, whatever, to the things that are important but not necessarily immediate. And i think we could do a lot better at every level from policy making at the global to the national to the regional and local level to businesses, to, you know, to personal life, frankly. One of the gray rhinos that comes up all the time is Retirement Planning or, you know, saving for college. You know, there are all sorts of things that are very relevant on a personal level. And, you know, obviously those arent the big, giant things that affect everyone, but for an individual whos affected, its pretty darn important. So i think you can be flexible in your definition there. As someone who invests in the areas that youre talking about, one of the ways ive had to reconcile this for many years is to argue that you dont go off and just try to invent whole new technologies immediately. That leads to solyndra problems and all kinds of crazy things, especially when politicians do it. You do the things that are Cost Effective from a capital allotment, you know, right away. Energy efficiency, pricing, all these things. You buy time. You dont turn off the Nuclear Power plants today because theyve got 20 more years to run. And thats 20 of the electricity in the country even if you dont like Nuclear Power. You dont al gore, im sorry, you cant do that. But if you do buy 20 or 40 more years, what matters to you for Climate Change is where we are technologically in 2050. Not somehow doing it immediately today. And by the way, our Renewable Energy program, i had the transmission guys from germany come in ten years ago now saying weve put 25,000 megawatts of wind, north sea wind in place. We spent more money than you can imagine, and now and we cant even say its Greenhouse Gas positive because we have so much standby generation diesel powered that we have to keep in germany to meet peak load when the wind isnt blowing. So policymakers often dont, arent gray rhino solvers in the way micheles talking about. Parse it, look at the long term. Youve got 20, 30, 40 years for your technology side, so put in a good program like saudi arabias doing with their 2 trillion facility, for example. Its also [inaudible] putting pressure on policymakers [inaudible] take care of their own neighborhoods. So youve got that, that pressure coming its called pork barrel. Yeah, exactly. Of. [laughter] [inaudible] [laughter] but i dont think you were talking about the same kind of gray rhino. [inaudible] let sleeping dogs lie . Very much so. You know, i think there are, there are situations where youve got to say, you know what . This is just not worth, not worth fighting. An example from the corporate world, kodak invented the digital camera. And they decided not to run with it because they were afraid that they were going to cannibalize their existing technologies. And it didnt work out real well for them. [laughter] but, you know, the other thing actually when i was in minnesota, i was amazed at the bridge memorial, it was right near the mill museum and all these old flour mills in the area. And they were just all there. And, of course, when, you know, when the mills switched from water power to other sources of energy, they could be anywhere. And so i think there are a lot of industries that, you know, that become obsolete, that fall aside because theres Something Better. And its important to realize when that is. You know, when is something fighting a losing battle. When does something fall aside and let Something Better come by. And it goes back to, actually, one of the big points in the book which is how do you turn a threat into an opportunity. You know, a very common one for Many Companies is the question of succession and control. Youll have people saying, hey, the older management doesnt want to recognize that its time for newer energies to come in. So theres, there are definitely times when the right thing to do is say, all right, trample me. [laughter] put me on an iceberg. [laughter] well, i want to thank everyone. I think we can micheles willing to stick around and answer a few questions, but this is great. I want to thank sais for hosting this, and thank you for writing the book. Thanks, jeff. I love talking to him. You can see why. [laughter] [applause] [inaudible conversations] youre watching booktv on cspan2 with top nonfiction books and authors every weekend. Booktv, television for serious readers. And this weekend on booktv on our weekly Author Interview program after words, congressman Daryl Darrell Issa s about his involvement in key congressional investigations including benghazi, fast and furious and the irs targeting controversy. Also this weekend the former head of the Defense Intelligence agency, retired Lieutenant General michael flynn, will talk about fighting terrorism. A look at the election of africas first female president and a report on the misuse of federal funds by states and local governments earmarked for the poor. Plus, an inside look at a homicide squad in maryland and math professor Andrew Hacker questions if advanced mathematics should be required in schools. And those are just a few of the programs youll see on booktv this weekend. For a complete television schedule, go to booktv. Org. Booktv, 48 hours of nonfiction books and authors. Television for serious readers. Heres a look at some authors recently featured on booktvs after words, our weekly Author Interview program. Manhattan Institute Senior fellow heather mac donald. Ney that would ya holt nathalia holt. And historian pamela haag looked at the history of gun ownership in america. In the coming weeks on after words, Karen Greenberg from Fordham University or will report on the steps taken by the department of justice to combat terrorism since september 11th. Eric fehr will discuss his time in iraq working as an interrogator for a private military contractor. Also coming up, wall street journal columnist Kimberly Strassel will argue the political left is using scare tactics to silence conservative speech. And this weekend republican congressman darrell issa talks about his time as chairman of the committee on oversight and government reform. Congress has given up much of its power. Periodically said well punt over to the administration. Then when the Administration Takes all the power you give them and like most bureaucracies, takes more be they can we often find our constituents saying, where do we go to get fairness . How is it that unelected officials are making vast amounts of laws . But the other part of it is an interesting one. The courts, when addressing the oversight of congress, have always sided with the legitimate requirement and obligation of the administration to comply with our oversight. After words airs on booktv every saturday at 10 p. M. And sunday at p