That grew up here and americans we should welcome that if we start broadening that which is exactly what he did in his 2014 executive order that essentially i would be ignoring the law in a way that i think would be very difficult to defend legally, so thats not an option. And that is why the courts struck down or stayed implementation of the 2014 executive order. Thank you mr. President. I yield the floor. Next a discussion on governance and leadership in the world from the United States to europe to asia. Its part of a conference hosted by the Rand Corporation called set politics aside. Speakers include author Francis Fukuyama and former banking regulators sheila bair. This is an hour. Hello and welcome back. I am michael rich president and ceo of the Rand Corporation. The focus of the last session of course was the middle east Foreign Policy more generally bear also the middle east of courses or region several hundred Million People. Hardly any democracies in that region. In fact, authoritarian states teetering states, banishing states increasing amount of ungoverned territories. In this hour we are going to shift our focus to places that on the surface seems stable, secure and even prosperous but the question is are they and will they be up to the challenges in this century . Its an appropriate time of course to take up questions like this. Its the 25th anniversary this month or this week of the opening of the berlin wall. This year the 25th anniversary of the protest in tiananmen square. In fact 1989 there was a wave of democratic transitions beginning in Eastern Europe obviously Latin America Asia and even africa. Liberal democracy and freemarket capitalism seem to have prevailed in that great battle of ideologies for various forms of totalitarians and it leaves one of our panelists have written about it and in fact i that was Frank Fukuyama to my left. He wrote an essay here at rand. He sat right across the hall from me. Its entitled have we reached the end of history a paper he then developed into a widely cited article ultimately a very famous book. The original rand paper which still has a question mark at the end it was end of history and i noticed over time as it went from paper to article to book the question mark dropped and i may ask him about that. But i read that frank recently said that the year 2014 feels different than 1989. How true that is. Russia of course now has been electoral authoritarian regime. It seeks to take back territory that lost when the soviet union results. The soviet union has an economy that rivals ours but remains authoritarian. The transition to democracy or the transition of the path to democracy in many countries has proven now anything but smooth or straight. In the United States we of course have experienced a prolonged recession, a gridlock with no end in sight to that. The climbing conference of Public Officials and their republican cetaceans and in europe we see an Incomplete Union in which nicolas has written about secession movements and echo mike stagnation. So hence the need for fresh approaches to governance and leadership and that is the theme for this session. I think we have got almost a Perfect Panel to address this. Let me introduce Frank Fukuyama three or four time alumnus. I cant remember the Research Staff there. Hes the author of many rand reports and bestselling books including the 2volume set on political order that we are going to get into today. The second volume of the set has just been published. Sheila bair is two francs left also a rand sheila shares the Systemic Risk council and the federal Deposit Insurance Corporation in 2006 through 2011, critical time. She is the author of bull by the horns, fighting to save main street from wall street and wall street from itself. She has another book coming out. It will come out this next spring that will explain the financial crisis and its implications for young adults. And its title is the bullies of wall street. This is how greedy adults messed up our economy. [laughter] i told sheila she has made it easy for reviewers with that title. Nicolas berggruen is next to sheilas left. Investor, philanthropist impressive founder and president of the Berggruen Institute on governance and he has launched several government reform projects including history the 21st Century Council which is focused on Global Governance options, g. 20s type structures. The council for the future of europe and importantly for residents of california. He has coauthored a book with nathan bardolph, intelligence governance for the 21st century a middle way between west indies. And then simon sinek is to my far left. Simon is an anthropologist and advises leaders in business government of the Nonprofit Sector on issues related to leadership and i think its a very close tie into the subject we are going to discuss. He does work with rand as well as one of our adjunct researchers. He is contributing to Research Several best sellers and frequent speaker here at rand. Frank has done a lot probably more research and analysis on the causes of political decay. More thinking about the problems plaguing modern liberal democracies than about anybody i know. Nicolass book contains some of the most intriguing ideas for fixing the breaks in democracies taking ideas as the title suggests from east to west in putting some of them to the test here in california. Few people have thought more about the shortcomings of restitution for governing modern economies and their Financial Institutions than sheila and in the end it all boils down to the competence and Leadership Qualities of individuals of the institutions that we have a nobody better than simon on the quality of leadership. Let me start with frank. Frank you have gone a long way back in history, collective experiences from around the globe. What does an Effective Modern state a liberal democracy need to endure and can you list the ingredients and what is causing the decay in those institutions that we are seeing . Thank you michael. This is a really important issue because the difference between 25 years ago when i wrote the original article and now its back then i think most people around the world has looked to the United States as the model of an effective democracy. I think very few people would say many democracies are not saying we want to replicate everything is going on in washington with the shutdown and refusing to pay back previous deaths in the sort of thing. So its an important thing for global politics. Modern political order has to have three things. It has to have a state which is about power and ability to use power to enforce laws and provide services and protect the community but it is also got to constrain power. It has got to have a rule of law which basically sets rules for the powerful. It doesnt set the rules for the president and the Prime Minister its not the rule of law. Finally there has to be democratic accountability which make sure the government acts in the interest of the whole community and not just the ruling elite. And i think americans have a problem in perceiving the world because in a sense the american system is built around the instruments of constraint around law and democracy. That is what we think of when we think about our political system. We dont think about the state part very much but as my mentor Samuel Huntington said before you put can restrain power you have to have an effective administration. That is i think where we have a big problem. My diagnosis of our situation is its a collision of several things. Just for a second i want to ask nicolas whether his definition of intelligence in governance as close to those three ingredients that frank just listed. Frank one of the greatest thinkers today in terms of understanding governance and government so whatever he says he is right. [laughter] to address one of the key issues here government why the government . Is frank says its power but government is really there at the end of the day to serve the public. It really has a function and the function is one that maybe control, direction but also service and the issue that at least we see at the institute is that the service in democracies and very much in the u. S. Has become too politicized. So you have to be able to separate the political side with where do we want to go morally and ideologically but also the Government Service bureaucracies. It it needs to be there really to make things function and make sure that people have opportunities, that they are safe and there is a future for everyone of these visuals and that has to be depoliticized. I think the issue we have in the u. S. There are a lot of other places and that is why reform is so typical in democracies. And why its become so criticized. With that basis let me return to frank and let you complete your diagnosis because maybe you now agree with nicolas. Thats a different way of saying what i was saying. You actually have to have a competent executive administration. I think the problem right now is so everybody is aware of polarization. Right now the most liberal republican is more conservative than the most conservative democrat. That is something that has been measured very clearly by political scientist that has happened since the late 1980s. That is just a fact of life. There is also a huge group of growth in interest wellorganized and wellfunded. The Supreme Court has said money is a form of free speech so money and politics makes him makes much more difference in these two. These by themselves would not be a problem but for the institutional structure. The Founding Fathers were interested in a strong centralized power so they created a very complex system of checks and balances in which different parts of the government checked other parts of the government but unfortunately when you bring this together with polarization and powerful Interest Groups it leads to what i would label a plutocracy meaning of rule by veto where it is extremely easy for wellorganized small minorities to block things there in a broader Public Interest. That is why we have got this absurd connection thousands of pages that is basically a collection of special privileges. That is what congress has not been able to pass a budget since 2008 and i would say that is a prima facie case for decay. Its a good leadin to a question i want to ask sheila because one of the changes that has occurred is that the economic and Financial Institutions that government is also responsible for regulating and overseeing are now much larger much more complex, much more international. Sheila how when your experience does that set of trends complicate the governments challenge for modern democracies . It complicates it a lot. I think a lot of the cynicism that we are seeing now the lack of trust i think a lot of it stems from the breakdown of the financial regulatory system leading up to the crisis in the bailouts that ensued. Obviously it helps people who are responsible for the mess to begin with. I think it did create a lot of cynicism in government but i think we can get that back. We are not doing a very good job right now. Again getting back to remarks earlier today which i was quite taken with and because i think to be a good Public Servant and an effective Public Servant and we do serve the public. Agencies like the nsa over the fdic or whatever should not be about political purpose. They should provide a service. He had a clear understanding of what his agency did. It was to protect the u. S. Public against threats and gather intelligence. Im happy for him to look at my telephone records. I know that a person like that in people who work for person might that know exactly what to do and what not to do with that information. But we dont have that kind of strong sense of public purpose i think with a lot of the leaders of the Government Agencies we have now or if they do they dont publicly articulated. They need to talk to the public and explain to them what they are doing and why they are doing it. Especially in the financial sector. We are getting a lot of reforms. Some of these Bank Regulations that are coming out now and i think again its because the regulators are ronica we are becoming less effective than less confidence because they know they dont have the public trust. They dont get the Political Support they need and there are too many of them so they counter each other and theres relentless lobbying against it. The financial crisis has a lot to do with the cynicism we are having and unfortunately the government response has weakened the competence even further. So frank and nicolas have outlined in different ways but i think are quite Common Ground the ingredients for an effective set of institutions. Simon what are the ingredients for effective leader of an institution of the sort they have been talking about . First and foremost leadership has nothing to do with rants. Authority comes with friends and their many people is that at the highest levels of an organization who have authority that they are not leaders. They tell us because they have authority over us but we would follow them and we all know people who said that low levels of organizations that have no authority but they let the person of the left of them look over the person to the right of them. As you gain more authority have the opportunity to look after more people. And this is where we trust in our leaders. We have social animals are spotting to the empowerment ticket people and put them in a bad environment and they do bad things. So the trust in our leaders is the belief, the human intuition of social animals that are leaders which is why we would devote blood sweat and tears willingly and probably help with their vision. When we have the sense the belief that they have their own interests in mind or rather they would sacrifice our lives to protect their edges which is even worse than we keep our walls up and keep a safe distance. Its the reason we dont trust politicians. Though we may agree with the words that come out of their mouths we know they dont believe all the words that come out of their mouths. So we keep a safe distance. Its a very primal reaction which is can i fall asleep at night and trust this person and can i trust turn my back and trust this person wants that me . If theres any doubt then any doubt then trust the case and selfinterest prevails. Nicolas you have thought a lot about what we might do to change our system here in the United States. Can you tell us a bit about the path we should at least consider going down to fix some of these problems . Its a complex problem and there isnt a simple recipe but i go back to what i said before and i apologize for that the sort of part of what the government has to do is service. At the same time citizens have to approve of the government so they should have the last word. There should be some separation or some difference between serving citizens and giving power and responsibility to people who may be the be like anderlecht. So there has to be some difference there and to your point of leadership the question then is somebody may look good and be a good leader and be popular but may not be the best administrator. We have to be able to make that difference and government has to on one side be able to attract people who are willing to lead and inspire but on the other hand there has to be an organization that is capable and has to be able to attract people for that. I would say what is interesting is and i would love to get the view on this is government in the u. S. And in a lot of western countries able to attract the best people . Is a prestigious, rewarding, exciting to be in government and is government attract the best people . I was listening before to countries that are less rich than this one saying governments have to pay more to get better people. I think in this country maybe that is also true that there has to be prestige. There has to be recognition that comes with serving government and i think that is being lost. So if you dont get the best people you are not going to get the best service. That is very true. It feeds on itself because people are more cynical about government and they get relentless. Pretty soon you want to go into that war as it becomes more dysfunctional. Good people want to get things done. Or even worse getting the good people in and people who want to use government for their own purposes at a few tax dodges and get this good though thats not what you want. I think its a real problem and again you want to attract people who are committed to serving the Public Interest by congress and elected officials which are agency does in protecting and sure depositors whether its National Security whether its the collection of the tax code. You need to identify the public purpose and for that reason and not other reasons. Again i think its important, your comment about Public Servants especially political heads being good administrators. That is a real issue as well. We need better management and business skills frankly and government leadership. I think there has been a slow recognition of that but again you cant have people who know how to defend their agencies execute and operationalize their agency in way thats professional and you need to get out and exp