Transcripts For CSPAN3 Washington Ideas Forum - Part 1 20171017

You or hurt you . I think the trump tax plan probably helps me more than it needs to, and im missing that part where nobody on the high end was going to benefit and this was going to benefit middleclass folks. So thats fake news. That would be that would not fall into the fact checkable news. Great. Lets get down to the serious things youve been investigating. Some of the platforms that many in the audience and even myself love, facebook, twitter, using Search Engines like google, are all now wrapped up into your committee, intelligence committee, coming in. Do you feel that these platforms are undermining our democracy . First of all, i know this feels like its a story that never ends, but lets look at what we do know. What 99. 9 of everyone in washington believes democrat or republican with the exception of maybe one individual at 1600 pennsylvania avenue. One, we know that russia using its services massively intervened in our election by hacking into both Political Parties and releasing information that helped one candidate, mr. Trump, at the detriment of hillary clinton. Factually, Everybody Knows, Intel Community knows, needs more investigation, but thats pretty certain. Second thing we know, russia intervened and attacked, didnt fully break into voter files but literally attacked 21 states electoral systems. One of the great frustrations i have had since the springtime was the department of Homeland Security would not tell the top Election Officials in those 21 states who were attacked. Lets pause there for a minute. I watched last night that hearing where you raised that hearing, you had a representative, a woman from dhs that you were hammering on this months and months ago, and you were pretty ferocious. Its taken all of this time for dhs to do this. And i have sources that tell me nowchief of staff john kelly, thensecretary of Homeland Security wasnt pleased with you. We had a frank and candid exchange. It just seemed to me almost kafkaesque that dhs would say we cant tell the states because the states secretaries of state or other top election official didnt have enough clearance level to be told. Now, that made no sense. Now, come last friday is that what john kelly told you . That was what was relayed to us. They did reveal to these 21 states, but this is part of the challenge that the fact that the president doesnt acknowledge this problem, so we have no government approach on how we preclude from happening next election cycle. I know in my state we have elections this year. Our statement election board actually took out one of the machines and decertified it because we were concerned about the ability of russians and or others to hack into it. So finally hacking into the machine itself. Hacking into the ability there was a conference in las vegas a number of months back where they brought in a lot of Voting Machines and showed how quickly hackers could actually penetrate the machines. We have no evidence that they penetrated in 2016. But they were in effect rattling the door and we need to be careful going forward. Third thing we know is weve seen and again, im you know, ive been a protech guy. My background was in the technology field. But the social Media Companies facebook, twitter, and were asking google as well. At first were dismissive of the fact that their platforms were used both as vehicles for paid advertising but also as places where russians were able to create fake accounts and those fake accounts could like certain groups, like certain stories, and that would drive those stories higher on your news feeds. And that would mean their propaganda, misinformation, disinformation, sowing chaos, i think it had a pretty dramatic effect. Again, we can get to the social media platforms in a moment, but heres what i worry about at times. If you take if russias goal, you know, was primarily to sow chaos, to show how our systems sometimes dont function, you know, and then secondarily help mr. Trump, they had a pretty good rate of return. If you add up what russia spent in american elections. If you add up what this spent in the French Election where facebook acknowledged they took down 50,000 accounts. If you add up what they spent in the dutch elections when the daesh hand counted the ballots, and double that, youre still talking about less than half the cost of one new f35. So from a macro standpoint, i think what we may have seen is the first, you know, not shots fired but the first tools of 21st century disinformation. And i worry as a big advocate for our military that we may have in america the best 20th century military that money can buy, but were increasingly in a world where cyber vulnerability, misinformation, disinformation may be the tools of conflict. How forthcoming are the platforms right now . Facebook denied having had any russian ads bought, and then overnight were learning more and more about more accounts, now we see the news today about twitter. Youve laid out that the milliondollar question is who knew, how did they know where to deploy these ads. But there was a period of time nothing had come forward. Does facebook have a lot of ruble accounts . Well, lets put it like this. They i think facebook in many ways knows more about each of us than the United States government. And the notion that somehow they werent aware of what was happening on their platforms strains my credibility. And they did say initially so you think they were lying. Im not saying that. I want to see the materials. They came in originally, they showed the staff, took the materials back. Not a good thing to do to a senate committee. And now theyre coming forward. They promised us the information this week. We want to get it out to the public because at the end of the day americans should have the right to know at least a couple things. One, if youre reading a political ad on facebook or any of the platforms, you ought to know the source of that ad, whether its foreign based or not. Secondly, if a story is being driven to the top of your news feed because thousands of individuals have liked it, we ought to know whether those individuals who are liking it are actually individual who is are represented. In many cases, they say its Steve Clemens from washington, d. C. , when it might have actually been, you know, igor pushkin from moscow, and what facebook has said is theyve identified one of the troll farms in st. Petersburg and they havent identified the rest. One of the reasons why i dont believe that they of actually done a thorough examination is the only accounts they identified were those ads that are paid for in rubles. Now, come on, guys. I think the Russian Services know how to like maybe use dollars, euros. So weve got a lot more questions. My hope is i talk with Mark Zuckerberg last week. Ive known him for a long time. Hes obviously built an extraordinary iconic company, but i think that company that more than half of americans look to every day is based upon a level of trust. And i think they need to be extremely forthcoming as well as twitter was in today and well ask google to testify as well, that they need to come forward. This is important in terms of americas confidence and the information we receive. So much of this story is behind is veiled, classified. You mentioned the 21 states, that some of those states, wisconsin and others, are just now telling their citizens that they had been penetrated one way or another by the russians because they had been informed formally by the department of Homeland Security. You were on this months ago. What is the gap between what we all know publicly and what you know because you get classified information, what intel agencies know . I mean, this seems to me to be right at the core of democracy. Id love to tell you but but, i mean, is it is it a big gap, a little gap . We seem to be so behind. Like this story keeps going on drip, drip, drip. I have been amazed that theres not a week that goes by that a new name or a new threat doesnt appear. And remember, we have and i want to give a lot of compliments to my chairman, richard burr, you know, we both have got challenges here. You know, theres democrats who think everybodys guilty from day one. Theres republicans who want this just to go away. Our job is to get the truth out. Our job is, yes, to figure out whether there was collaboration or collusion, but equally if not more important how we prevent this from happening going forward. And the fact that the white house everybody in the Intel Community, again, most of the president s appointees have all acknowledged this, but the fact that theres no single point of contact in the white house that says, hey, my job is to make sure that our electoral systems, that our information, that we are protected from russia this time. It could be other foreign entities next time. In a way that has a whole of government approach is a real challenge. It means its more incumbent upon us that at the end of the day we get the truth out. I want to move to some other topics in the remaining we have. But i want to ask you about what you see as high crimes. We now see ive seen your comments about we of seen evidence of collusion, intent to collude. So of these things that we keep reading about, you know, the Jared Kushner meeting with bankers, the russian meeting in june, the creation of a document on air force one that was done for eric trump jr. , all these things that come out you cant make some of this stuff up. Which of these constitute high crimes . Again i, ive not reached a conclusion. My job is not to reach that conclusion until we get to which way are you tilting . Towards the truth. I think there are a series of interactions, you know, for example, michael cohen, who wanted to try to pull a fast one on the committee, well have him come back. Hes been identified with trump tower moscow, a series of other dealings with russia. I think its important for the public to hear from him. Were going the want to bring in donald trump jr. But we want to hear from all the other people in the room first so we know the right questions to ask. So there are those kind of questions about was there shared information. Clearly the russians were trying to offer, you know, information that was hurtful to hillary clinton. You know, did the trump people accept it or not, we dont know the answer to that. The other piece that i think is one of them, the big unanswered questions, and i really hope the social Media Companies will be very forthcoming, the trump social media operation was much, much better than democrats realized. And weve seen lots of use of facebook. Weve seen some level it appears of coordination with some of the altright groups. The question i have is i know the russians have the technical ability to plant fake news, to create fake accounts. But their level it appears of geotargeting on a demographic basis in certain key areas where even the democrats were too asleep at the switch, how do they figure that out to that level . Maybe it was just the theres been some evidence that the Trump Campaign put a lot of their data bases in effect out and some of their targets out for public and then people who wanted to, you know, not directly work with could use that information. But i still think one of the milliondollar questions is this was a level of sophistication that i think was unprecedented, and we have got to figure out what happened. Have you read josh greens book on steve bannon . No. Might be interesting. Might be interesting. Hes on a little bit of a high this week. Yeah. Let me just shift gears for a minute. I interviewed senator chris coons yesterday and we were talking a bit about health care. I asked him in terms of bipartisan, constructive, working together, how many United States senators did you think would be open to the notion of a vehicle that came on this, solves a lot of problems of the Affordable Care act that came in, and chris said 50, which is a disappointing number. Im interested in just you and richard burr have a deep relationship and a good effective relationship. Does that go on is there a chance that were going to be able to tilt from this period of extremism in both parties being unable to kind of work yes. The truth is there is a lot more interpersonal working relationships in the senate than you guys in the press represent. Do you guys hide them from us . No, we dont there are plenty of secret spots where we have a glass of wine and share ideas. And i think health care give me a call. There was a path, and i think patty murray and lamar alexander, theres a way we can do some shortterm market stabilization as well as taking on some of the options, a reinsurance pool. You know, ive been open for a long time the idea of cheaper plans to get younger people in. I call them the popper plans. Theres a lot of agreement. We just need the runway to play that out and i think youll see that happen in health care. I worry you know, ive spent years as a former business guy and some of the audience may recall i was part of the socalled gang of six. I again think its a little weird i work in the only place in america where being in a gang is a good thing. Im part of every gang there is. But im fascinated with our debt every deficit issues, macroeconomic trends. I think i could add some value to a tax reform debate, but if the operating premise is that the republicans are going to try to do this with their team only and get 50 or 51 out of 52 votes i actually think that would be harder in tax reform than to get 65 or 70 votes out of 100. And my hope would be they will learn as the democrats should have learned before, if you try to do major policy with one party only, youre never going to get it to the point because youre never going to get it 100 right. Youre never going to get it to the point where the American People accept that policy as being in effect vetted by both teams. You have written, senator, about your worry that our incentives in the economy are designed the wrong way. That the average worker is screwed in the Current Situation because were seeing less and less investment in the economy, less and less longterm orientati orientation. What are the two or three things you think need to be done to change the course of the economy so its more in a healthy way, more sustainable than it is today . In 1 43, ill give you a whole new economic theory. Heres my feeling. I did extraordinary well and very blessed to d well by our Free Enterprise system. I worry that modern american capitalism is not working for enough people. I believe that that is driven by the fact that longterm Value Creation is too often trumped by shorttermism. And let me cite three examples that i think that dont fall neatly into democrat and republican. The whole notion of traditional social contract around work has changed. People no longer work like my dad did for the same company for 38 years. A third of the workforce in America Today is in some form of contingent work, parttime, temp, independent contractors, the gig workers. Those folks, even if theyre doing well, they have no social insurance. So we have to experiment with a portable benefit system. The same corollary of that nonlongterm employment means theres really no business reason for a company to invest in upscaling low and modern income people. The government does a pretty crummy job on that. A tax reform plan ought to include major tax credits for companies who train up low and moderate income workers and i would offer a lower repatriated tax rate for those company who is put in place that kind of meaningful training. And third, i think we rally need to have and this would be a debate that would be fulsome a question whether the Capital Markets are so focused on short termism that the longterm great post world war ii companies could even be created todareate. We do point to the facebooks and the amazons and the others, but those are companies where the founders still control an unusually large block of stock. How can we move away so that companies no longer, you know, 30 years ago 50 of Company Profits were reinvested in companies, now 95 of corporate profits are spent on share buybacks and dividends. Thats not the kind of capital ism thats going to grow and make everybody have a feeling of inclusiveness. Thank you. [ applause ] finally, i just want to ask you a question about the Trump Administration and President Trump. Given everything we know, given the concerns that youve laid out, how willing are you, given everything youve seen, to go and become engaged with President Trump and to work with him on these issues . I want the president to succeed. Can he succeed . Listen, i a little less tweetage, a little more policy might help. I want him to succeed. Hes our president. But hes got to recognize that the role of the president , the role of any leader i was a governor in a state where it was 21 republican the role of a leader is to actually get folks to find some Common Ground and not to try to find every issue and simply reinforce your base. Our country has done best and its policy has done best when you actually build policy out from the center rather than driving it from the extremes. Ladies and gentlemen, senator mark warner. [ applause ] please welcome the ceo of aetna, Mark Bertolini and the atlantics executive editor, matt thompson. Good morning. How are you . Im good, thanks. How about yourself . I was a little worried because i hear you never express any opinions on health care. You have a reputation of playing it very close to the vest. Very close to the vest, yeah. Got my talking points right here. And theres nothing happening on health care right now. No. Apparently the latest lastditch effort to replace, repeal and replace obamacare, the Affordable Care act, is seemingly dead. Yes. Although theres two more days. Anything could happen. Is it really dead . Yes. Yes. [ applause ] how do you feel about the demise of the various efforts . And Graham Cassidy in particular. I think senator warner, who i have a great degree of respect for, he and i have talked a lot about this and conscious capitalism. And i think as we think about what gets done in this country of any major social import, its always done bipartisan. Because no sooner is the bill passed and put into place than it needs to be fixed. Yeah. Medicare gets tweaked every year. Social security gets tweaked every year. Medicaid gets tweaked every year. And you have to have a bipartisan agreement that we need to fix these things as they go along because nothings perfect out of the box. Thats what real innovation is. But it would seem from the number of plans that have been floated and failed over the past couple of months, it would seem that theres actually a wide area of give on health care. What has been and there have been bipartisan plans hanging out there for since the nixon era, right . So if you took the politics out of the situation, wed have a bipartisan solution already. Okay. This is about election promises and an 18 election. And if we really want to fix the thing, there are very simple straightforward things we can do to fit it. The Affordable Care act. Which by the way touches really, you know, 18 Million People out of 330 Million People. So if we want to fix it we can. We just need to get people in a room that can do it. There are people who have been in the room do it. We just need to get it to the forefront and have it done. And i think once we get past, you know, the bewitching hour of september 30th, i think we have an opportunity to actually do something in a bipartisan way and that would be a great start to get tax reform done in a bipartisan way and to get infrastructure done in a bipartisan way, which would invigorate our economy. Lets talk about the Affordable Care act for a second. Yep. Your company, aetna, was has pulled out of the exchanges it has pulled out of the exchanges for 2018. Which do you think has been a bigger problem for this Affordable Care act this year . Has it been structural issues in the bills design or has it been administrative wavering from President Trumps administration over actual reimbursement . So its uncertainty. So for those of us im not an actuary but i play one on tv. And as actuaries, we price these products 18 months in advance of the actual due date. And so if the rules are constantly changing and the funding is constantly at risk, you dont know how to price the product. Thats insurance. And so if you want to deal with stabilizing the markets, you need to have a stable footprint. Even under the Obama Administration there was instability in the exchanges every year because the rules had to be made up in regulation, because congress couldnt Work Together to change the law and legislation. Had they got added if we hadnt touched medicare, social security, or medicaid for seven years, they too would fall apart. So, you know, because we could couldnt do it in legislation, hhs tried to do it in regulation and that is a very difficult thing to do with any kind of predictability. Did your own decision to pull out have anything to do with the governments blocking the merger with humana . No. Were still here. Nothing ventured, nothing gained. We thought it was a good idea. We thought it could really be powerful. Its not the end of the world. We have a Great Organization and great people and well be fine. Outside policy youve got some strange ideas about health care, i have to say. You come to washington, which they say new york is the city that never sleeps, washington is the city with people that never sleep. And you sleep 7 1 2 hours a night. Totally. How is that possible . Try it, youll like it. Youre the ceo of a major company. How do you sleep 7 1 2 hours at night . Your amount of time you spend on your work and thinking about your work is not directly related to the success of your work. Think about that. [ applause ] its too complex an idea for me. People who count cars in garages at workplaces after 7 00 are really got it all wrong. And so you do need 7 1 2 hours of sleep, and what we do is we pay our employees to do it 20 nights in a row because if you do it 20 nights in a row you will want to keep doing it because its so powerful. So blue light in the morning for an hour without any glass or shield over your face, outdoors, creates melatonin that gets stored for later in the evening, then in the evening you should have yellow light or amber glasses that will allow you to ramp down as we used to around fires a long time ago, so you can sleep. Those two things. Just try it. And do it 20 nights in a row and you will feel completely different. How did you come by these wacky outthere ideas . Well, first of all, i had an accident, so i was one of those sleepdeprived people. I had a skiing accident, broke my neck in five places, coma for a week, loss the use of my left arm, all those sorts of things. Chronic neuropathy. When you have that moment, you have to say how can i put all those back together . Sleep was one of the big ones. I used to sleep from 11 00 to 1 work from 1 to 3 scare everybody with emails, back to bed from 3 00 po 5 00 and go to the gym, four hours of sleep every night. Chronically sleep deprived, not making good decisions. How does this factor into aetnas work . Do you do interventions with the companies that sign up with you . We do. I came to work one tay and said we should do yoga and ay and sa we should do yoga anday and sai we should do yoga and mindfulness together as an organization. The team groaned and sent the chief medical officer to me because he said i was talking about voodoo medicine. And we took our employees and put 790 of them through mindfulness and yoga for 12 weeks, measured stress level base cortisol levels and by heart rate variability and we saw a dramatic drops, people at the highest level of stress, 2,500 a year more in health care costs. Are you covering, like, supplements, acupuncture . All that stuff is covered in your hsa or hra, if you work for an employer that thats where you can get that done. Some employers offer yoga. We now have a program called the healthy cities and counties challenge across america. We have 50 cities competing. We Just Launched a site today, healthycities. Org to track them over the years working on violence in cities like kansas city, urban farming in places like new york. Started 5,539 urban farms in the last two years in communities where there are food deserts. Meals on wheels found this week their 2 million volunteers will give us feedback on the homes of seniors they go to if the seniors attitudes rain shower circumstances have changed so we can intervene at the home to help them because Food Insecurity and isolation leads to higher dementia, higher depression, higher diabetes and higher incidents of alzheimers. Were crowdsourcing social determinants of health. Put 2g Million People into homes, give us the information and well act on it. I know a lot of folks who would be i might say concerned if they heard their insurer was sending 2 Million People in their homes to gather all sorts of information about their lives. Why should we trust you . Youre spies. Because its not us doing it. These 2 Million People are people that see these people every day. So we often all of you have seen a doctor atsome point in the near past. You get 15 minutes. Do they talk to you about how things are going at home . Hows the diet going . Exercise . Are you feeling well . Anything troubling you . You get 15 minutes. And even if they did ask you that, we lie 75 of the time. Working out 30 minutes a day, doc. Im doing great. Eating only vegetables and fruits. Im really doing good. And i dont drink at all. I just have a couple glasses. Theyre tumblers but just a couple glasses. And so this idea of getting away from the exam table and to the Kitchen Table and actually understanding whats going on in the home. So aetna cant knock on the door and say, hey, wed like to come for dinner because thats where you learn everything about the family. To get to the Kitchen Table, you have to have the people they trust. The people who deliver food to them every day are people they trust. And those people can make honest assessments of whats going on from daytoday. And thats what we want to hear. Its not that we want to intervene if their home, but if theyre isolated, not getting enough food, if they have a problem, you know, with travel and getting their meds, we want to know about it because its cheaper for us to pay for uber, to pay for a ramp in front of the house, to pay for fuel assistance, to pay for meals on wheels. If we can, indeed, know that thats there. Its cheaper for doing that than for them to show up for oneyear visits. This the points youre making dont tie back, obviously, to our Big Conversation about the Affordable Care act and health care. We spend a lot of time talking about preexisting conditions. Right. Although they wont be mandated for coverage. How do we create a federal system that would pay for my uber, for example . So what we need to do is we need to liberalize the definition of benefits so every state categorizes what benefits should be covered under health care reform. And instead what we should say is a healthy person is productive. A productive person is viable, socially, spiritually, economically, physically, and viable people are happy. And if we need to provide a service that can allow us to do that, we should do that. We should intervene. And so when you look at the total spent on health and social determinants across the oecd nations, the United States when you add the two together is now 11th, our value for Services Rendered across that spectrum is 34 out of 34th. Our Life Expectancy has gone down for the first time. And when you look at the split between health care and social determinants, the United States is the only country that spends more than 40 on health care. We spend 64 . So weve got it wrong and its showing up in our emergency rooms, its showing up with opioid adex and overdoses which will be 70,000 overdoses this year. More than automobile accidents, gunshot wounds, and suicides put together. We have a pandemic. Its bigger than diabetes. Because people have lost hope and its because of where they live. When you say liberalize the definition of health, though, part of what i hear is lets not mandate a definition of what constitutes a health condition. Is that what you are saying . Personalized medicine dictates that we understand what for you, what does your health do to get in the way of the life you want to lead. And we need to make that work for you. Because thats the only way were going to engage you. If i Start Talking about neuropathy for diabetics and you could with prediabetes be a type 2 diabetic in seven years, youll go, oh, thats what you tell your doctor right . Thanks, doc. I appreciate it. Ill work hard on it. But if you have it and we say well get your feet better and you can go for a walk to the Senior Center or you can take your children, grandchildren for a walk in the park like you used to, youve got my attention. Because now youve eliminated a barrier for me. People think of their health as a barrier to the life they want to lead, not the condition they have. Lets talk about who pays for my abouter uber in this case. Ive heard mixed things. Bernie sanders push for a singlepayer health care, medicaid for all. Medicare for all. Medicare for all. Im sorry. What do you actually feel about that idea and the idea of singlepayer more broadly . I think the idea of financing a broken system is like financing a bad car. No matter how you finance a bad car, you get a bad car, right . Okay. So if you pay for it with cash or took a loan or if you think about it, nobody goes to General Motors Acceptance Corporation to buy a guy. We finance health care. Nobody can go to General Motors and knock on their front door and get a car. You have to go to a dealership and talk about your ambition for transportation. So what were talking about with the Affordable Care act and one of the reasons it hasnt reduced costs, why we talk about singlepayer like we talk about graham lindsey, all of it is focused on health care, not the underlying cost Office Health care. Which is a bad institute. When the institutes of medicine, a bunch of doctors say 30 of the 3 trillion spent on health care, 900 billion is wasted, there is your financing. Theres 900 billion. Lets go get that. Lets do the right thing. But when you if Graham Cassidy were to have succeeded, it would have created 50 Health Care Systems all over the country. It would be very difficult to get to that system, wouldnt it, where the ideas you put in place are accessible to all americans . Well, if you look at canada, canada has a federal financing of each province and territory on designing the budget for their health care delivery. That was Graham Cassidy in a lot of ways. Interesting. Right . So the Canadian Health care system budgets by territory and province for the health care that theyre going to do and theyre responsible for delivery just like that would be for our states. Then youve got the federal government with the financing of it through taxes. So, you know, people point and go no, no, no, we cant do that. Well, thats what theyre doing north of the border. All right. Simple question. Youve got one minute. I want you to redesign the u. S. Health care system from the ground up. What does it look like . So what we would do, and this is what were trying to do with the healthiest cities and counties challenge. What we would do is understand the disease burden, social and Economic Partners of a community and we would say, okay, what does the system need to be like to support that . Central kentucky has some of the highest opioid addition in america, were handing out narcan to First Responders to teach them how to use it. If we understand that demography and the disease burden, we can design a system that works for that community and deliver it to the community in the most efficient way possible. Thats the investment. Understand the investment and then finance it. Well save money. And so if you think about that from the context of, you know, how we revolutionize a system, right now our governance model on health care at a federal level and a state level is not big enough and not robust enough to manage the economy of health care, which is now 17 , bigger number, 18 of the gdp of this country. So when we run into issues where our governance models in our companies, in your governments, in our economies are not sufficient to govern properly, then you have people saying, well, we need a new world order. Were social ecosystems. I would argue its the exact opposite, you have to go back to community, you have to go back local and you have to be in the community, in the neighborhoods talking to people about what matters and do it for them not because we have some idea of the idealistic version of health and how it all ought to work from a National Level by pushing a button. It doesnt work that way. If you what are you watching next . What do you think is the very next move that we should be paying attention to right now . In health care . Yes, in the argument over i think there is bipartisan work going on. I know that for a fact. Ive spent time with senators who are working on it. I think that will be the next step. I think we just have got to continue to support a bipartisan solution because Bipartisan Solutions can be touched every year. And they can be fixed and tweaked because its a joint effort for the American People. When its not bipartisan, thats when things blow up. All right. Right . Mark bart leany, thank you very much. Please welcome the mayor of washington, d. C. Well, good morning, everyone. It is so happy im so happy to see you all here and i want to thank Steve Clemens and Walter Isakson for the invitation to be with you today. I am so happy every time we have a collection of the nations most prestigious innovators in thought leaders, business, politics and media, and that you choose to meet in our fair city. I know that you wouldnt be here at this conference if you were not also committed to the things that we champion in our city, and thats innovation, inclusion and solutions. And we share this commitment with you. Since my first days as mayor of d. C. , i have committed our city to these big ideas as well. Part of what i want you to take with you today, take to your towns and cities and all the work that you do, is just exactly who we are and what we are in washington, d. C. And i tell people this all the time, we are not your grandfathers washington. We are more than a government town. In fact, we are a Business Capital that is experiencing unprecedented growth. Its one of the Fastest Growing and most exciting local economies anywhere in this country. We are a leading city for industries in the professional services, no nonprofits, hospitality companies, technology and retail. We are moving Big Development projects in all areas of our city. On october the 12th, we are going to reinvigorate the potomac waterfront with the opening of the wharf. Projects like walter reed and st. Elizabeth are moving forward and attracting wonderful tenants. We are a thriving Entrepreneurial Community that is Getting Better and growing stronger each and every day. Every month, we attract about 1,000 new residents to add to our 68,000 people in washington, d. C. We have big goals for inclusion in our city as well. Over half of d. C. s workforce is made up of women and over half of its workforce is made up of people of color. We still have a long way to go in celebrating and growing our inclusion, but we know that women make up just 37 of tech jobs and people of color only 28 . And we know that this is a niche in washington, d. C. That we want to grow. For example, on tech, yelp announced it would open its first east coast office just steps away from us on seventh street. Apple announced plans to revive the library with a worldclass location. Fiscal note confirmed plans to expand and stay in washington, d. C. And amazon Just Announced it will open its Second Headquarters in washington, d. C. [ applause ] i was wanting to see if you were awake. Because while it hasnt been announced yet, we are competing and we are competing hard. So you go back and tell them, alexa, why d. C. . And you will say, its obviously d. C. Have a great day. [ applause ] ladies and gentlemen, please welcome ceo of the zillow group and jillian white, Senior Associate Editor of the atlantic. Good morning. Good morning. So i want to start off with kind of a bigger question, not just a housing economics of housing, but i want to talk about the culture of housing and the culture of real estate. I would say about 50 to 60 of the cab rides i have and some of the pool rides i have, etch wants to talk about the real estate market, the cost of housing when we look at television, people buying homes across the globe, renovating them are incredibly popular. Why is housing and real estate at the center of so much of American Culture . Well, its primal for starters, right . Shelter is something that everybody has a need for so it starts with the emotional attachment that people have to where they live, but then it quickly shifts into the economic as well. Its a huge part of the economy. For most people, its their most valuable asset. 1. 5 trillion of residential transactions every year. Its the combination of those two. That dichotomy or combination is where we got our name. Zillow plays on that. Little known fact, zillow is zillions of pillows. That reflects the two sides of real estate. The pillow is the emotional right brain, where you rest your head at night, can i see my kids growing up in this house . Zillions is the quantitative data and the combination of those two things that is real estate and why its so important to our society. Ive already learned something today. Thank you. Mission accomplished. We spent the better part of the last decade kind of worrying about the Housing Market, stressing out about it, putting lots of negative adjectives in front of it. What is the health of the Housing Market right now . Well, its on fire. Let me give you some stats. Home values of up 7 year over year. More than half the country is past peak value. Of the 100 million homes in america, more than half of them are worth more than they were in the bubblish 2007 peak. That being said, home sales are actually slowing because there is not enough inventory. We were talking before and it seems everyone has a story, everyone has a personal story about that, about how limited inventory is. So, of course, limited supply but good demand means home values are spiking. The reason for all of that is through the downturn, builders stopped build pentagon we used to have 1 million or so new homes built each year, we dropped down to 200,000 or 300,000 for a couple of years. There is a huge lack of inventory. When builders started building a couple of years ago, they started building at the high end. There is very, very little inventory in the low tier and the midtier. What are the solutions or incentives that you think could be put in place to create an incentive to create that inventory at the lower or beginning end . Well, the biggest governmental solution is more, this is going to be controversial, but more prodevelopment environment. I mean, in seattle where im from, people are constantly complaining about the lack of Affordable Housing, as i understand, you know, they do here in d. C. , but then you look around seattle and there are all of these trees everywhere. Its like, well, look, guys, if we want more Affordable Housing, you have to cut down some of the trees to build big buildings. That would change the nature of seattle, and so more Affordable Housing starts with development and building more buildings. You know, Credit Availability is the other side of this coin and there is no question that its harder to get a morning than it was during the last peak. It actually, however, is a bit of a return to the prebubble normal. So if you could document your income and you have income, you can basically get a morning. So our view is that overall Credit Availability isnt really that bad, its just less available than it was during the prior bubble. All right. Who is buying homes . So anyone who can find a home that they can afford. Millennials are buying. Think there is a common miss perception, millennials, oh, they rent music and rent tv shows and they ride share on cars so maybe they dont buy homes. The data doesnt support that. Millennials actually are now the biggest cohort of home buyers. They make up 42 of all buyers. Theyve bought 500 billion of real estate in the last few months. Millennials are very much in the market. What theyre buying has changed. Theyre buying later so theyre buying bigger. Theyre basically skipping the starter home. Renting a couple of more years, and when they go to buy, theyre buying what would have been considered a second or third stepup zblo stepup. Are they making such a large portion of firsttime home buyers because the generation is so large and they happen to be of the group that are of age and dont actually have a home . Yes. Theyre dual tracking. Millennials but overall, everyone is getting creative. If youre a tradition alibier, youre getting creating, which means you have to be patient. Theyre submitting multiple offers. A typical buyer searches for four months before finding a home. Thats much longer than usual. A third of all millennials are borrowing the down payment in order to stretch into the home. More than a third are stretching their budget, getting creative and buying houses they cant really afford without stretching past their budget. 60 of them dual track. This is a phenomenon we havent seen prior to the Great Recession, dual tracking means people are looking at buying or renting simultaneously. This is a really interesting cultural phenomenon because it sort of it reflects the fact that people no longer view that trees will only grow to the sky around housing. In other words, if you think home values some day will be flat or maybe down like they were during the recession, then does it really matter if i own or rent . Like, isnt im going to pay 2,000 to the landlord or to the morning to the Morning Service or to the bank so im willing to consider dual tracking. As i say, over 60 of millennials are looking at buying or renting side by side. Do you think there is any longterm danger to some of the ways millennials are cobbling together their down payments. You guys had a new report out that said borrowing from family members and doing a couple of different things. Exceeding their budget. Sometimes putting down really low down payments. When i look at the economics of a lot of millennials. Some of them were out of work for quite some time. Wages have started to tick up a bit. A lot of them have a ton of student debt. Renting longer, especially in major cities where their jobs are are rising rapidly. It doesnt create a recipe for a ton of savings to put down on these really expensive homes. Are you at all concerned with whats going to happen there . Well, let me compare this peak with the left peak. The short answer is not really, heres why. The last peak in 2007, basically at those home levels was built on a foundation of sand. The Home Ownership rate forever and ever was in the low 60 range. About 10 Million People bought homes that never should have been able to buy homes. The Home Ownership rate went up to 70 . They were able to get mornings they never should have gotten. Through 0810ish Million People lost their homes because they never should have bought homes in the first place and the Home Ownership returned. This spike in home values brought us back to the same level is lack of supply and strong demand. Its not based on easy credit. And so this recovery has a lot more just a much stronger fou foundation. So sure i worry about people stretch for a down payment or buying homes outside their budget, but overall housing is so much more healthy even at the same dollar value than it was in 2007. You were talking about the market is on fire. Talking about lack of supply. As somebody who follows economics a lot, those terms make we nervous. Are you at all worried about bubble conditions . We think it will slow down. Our next forecast is in the 4 to 5 depreciation, but, no, our data does not forecast a decline in home values. Because i think the foundation is more solid, not easy credit, no, were not worried the way were were in 2007. So you guys are tracking the thoughts and kind of Home Ownership or home buying purchases of the next generation, which i didnt even realize, generation z was old enough to think about homes or renting or anything, but it turns out they are. What are you guys finding there . Whats their mindset. Who do you guys define as generation z . Look out, millennials. Youre already being cast aside. Youre already old. Were talking about gen z. In their early 20s. People graduating from college just entering the workforce, and they obviously theyre mostly renters, as people typically are at that life stage. The research on gen z, which was published in this report that we just put it out, it shows they have traditional views of Home Ownership, much like their parents or grandparents, they aspire to own a home. The media, again, tends to report overextrapolate from other parts of the economy where millennials and gen z tends to share. Millennials and z dont feel that way about housing at all. They want to own a house. They believe its an important part of the american dream. And perhaps we dont have data on this yet, but we high pathologist size that gen z will have a higher Home Ownership rate than millennials. Because they have a lot of scar tissue from the downturn. They came of age in 07, 08, 09 and said why would i want to buy a house . Forget it, ill just rent. It took many years for them to move out of that and come into ownership. Z doesnt know what the Great Recession was. They were five. They dont understand the term negative equity. They dont know what negative equity means, and so for them, you know, owning just seems like a more stable, you know, then i wont have to worry about my rent going up. I know what i have to pay every month and wont have to worry about getting kicked out by my landlord and i can put my pictures on the wall and not worry about damage to my relentless. We high pathologist size that z will be a higher ownership rate than millennials. Downplayi you think theyre o start buying sooner . A lot of millennials didnt start buying until their mid to late 30s. If generation z is thinking about this and theyre a whopping 20 years old, when are they buying . They would like to buy sooner, but the problem is there is very little inventory at prices they can afford. They are searching. Traffic on our site from that cohort is huge. Theyre also dual tracking. Again, a lot of the lines around ownership of assets have become blurred. This is the airbnb phenomenon. Theyre very blurry about owner. Do you think there is any validity to the fear that a lot of millennials have they dont want to buy at the top of the market and risk having the slightest amount of negative equity . Do you think thats fair . Absolutely. I mean, everyone when youre in a search process for four months and youve been on eight homes and youve gotten outbid eight times and getting ready to make that ninth bid, you know, youre absolutely worried about getting out over your skis and overbidding just to win the house, and then what, you know, then you overpaid for a house. Its a huge concern. There is not much you can do about that concern. If you want to get the house, you have to overbid in the supply constrained markets. Its totally a risk. Do you think technology can help with this issue . I know a lot of people looking for houses and they spend their entire time glued to their phones looking for new things to pop up. Thats great. Theyre probably looking at zillow. Yes, so here is how i look at it, every other sector of the economy has been revolutionized by the smartphone. We live in a push button economy. I push a button and get a car, my food gets delivered. I push a button and my podcast has been downloaded. Younger people, really all americans now have become so accustomed to that, they dont understand why the real estate transaction is so complicated. You know, why all this paperwork . Whats escrow and Title Insurance . Why does it take two months to close and three inspections, waving inspections. Even buying a car has become relatively simple thanks to the internet. So we at zillow see that obviously, and were trying to innovate on all of that and were deep into the paperless transaction. We have a service that does Electronic Transaction so you dont have to ever sign paperwork again. Its deep in the real estate space and most transactions are closed using electronic signatures from dot loop or someone else. Were pretty good up front helping people triage in the search. There is the whole messy middle that hasnt been innovated on much by the industry or disrupters like us, and if, you know, imagine a world where you an actually look at a home on zillow, press a button and buy it. What might that do to the ownership rate . If buying a home was as simple as hailing an uber, like, wow, thats a gamechanger. Were trying to innovate on that, though, unfortunately requires this very complex process, which includes financing. Yeah. Which is highly regulated and very complex. And all of it has to be torn down and rebuilt in a pushbutton way. I imagine you guys would face a lot of resistance or fear about that. Im nervous to turn on my amazon one click settings for fear of what ill do. They will have a confirm, are you sure you want to buy this house . Exactly. Their patent has expired now. It expired a couple of weeks ago. We could have oneclick, i suppose. Yes, we definitely have to figure that one out. Im quite sure, though, that the consumer demand for a simplified real estate process is huge. The bigger concern is the industry reaction, you know, some of that complexity is good for the industry. Its good for incumbents that benefit from that opacity and were all about innovating for the consumer and prioritize for her. We call her beth. At our office, youll see posters of beth the buyer and all her demographic information. We live for beth. Thats who we do all of our product planning and strategy. Beth doesnt want to buy a house the way shes been buying a house right now. She want it is to be much more seamless. A few years ago there were a couple of trends we thought were going to be potentially problematic in the Housing Market. Boomers and other americans deciding they didnt want their big sprawling maxes in the suburbs and the others were millennials and younger workers deciding i never want to go to the suburbs, no thanks. Im going to stay right here, which creates part of the inventory problem were talking about. Are you seeing the fulfillment of both of those trends . Yes, but theyve been swamped by the lack of supply issue. So, you know, when you have three to five years of an accumulated 500,000 home start per year, missing 2 to 3 million houses that should be there, and, you know, that trend swamps any other. Thats limited supply. This may be a selfish question, but so you think a year or two out in the Housing Market, what do you think is the biggest story that is happening there . Oh, wow, lets see. Thats a good question. A year or two from now you know, there are a lot of companies, including us, that are innovating on a quicker sale process, where a seller can sell their home to an investor buyer within days rather than traditionally. Were testing Something Like that in a couple of markets. I think that might become something big. Spencer, thanks so much for joining me. Thank you. [ applause ] next up, a session produced by our underwriter. I was on my way out of this life. When i was first diagnosed, i felt paralyzing fear. You hear these stories all the time. Am i going to pass away like my mom did . Back in 1988, the only thing i could think of, you know, im going to be dead in six months. And i see how scary it can be. Its like a war were trying to fight again these diseases. At first, it was very difficult to see how in the world we were going to solve this problem. Its a big challenge, but the challenge in itself is what keeps me going. I could really make a difference in these peoples lives. Every day i think how fortunate i am. This is something that im really passionate about. I really want to help. Resilience is in my dna. My daughter says, mom, you western meant to carry his story. It took a long time for me to get back up. 29 years later, here i am. When those patients come to me and say, you saved my life my life was saved by a 2weekold targeted therapy drug. Thats what really drives me to save lives. Please welcome to the stage, ted johnson, biopharmaceutical researcher for pfizer, matt, cancer survivor and phd candidate. And holly, a representative and researcher for pharma. Good morning and thank you for being here. My name is laurie riley and im the executive Vice President for policy and research at pharma. We represent the nations innovative Biopharmaceutical Companies and im joined here on the stage with two gentlemen who you probably recognize from the video that you just saw. To my immediate left is matt, who was a patient treated with a targeted therapy for lung cancer. To his left is dr. Ted johnson, a biopharmaceutical researcher from pfizer. Welcome to both of you today. I want to jump right in. Matt, talk to us a little bit about what it felt like getting that initial diagnosis and what transpired over the weeks and months after. Yeah, so it was six years ago in the summertime. I was 24 years old and i had developed this persistent dry cough around Independence Day so i had my internist check it out. In the month of august. My chest xray led to a ct and a biopsy. On august 17th, 2007, i was told i had cancer. That reveal came about a week later on august 26th when i was told that i had stagefour lung cancer. So that essentially meant that from my neck to miers to owe was chalked full of cancer. My oncologist told me that he was going to send my tumor away for a molecular test for a mutation that had been under a lot of research and if i had it, i would qualify for a new targeted therapy drug. While waiting for the test i had become very sick. I was i actually stopped breathing. I was resuscitated. I was in the intensive care unit for 2 days and nine days into that i was told i had the mutation. The drug was overnighted and here i am today. Coincidentally enough [ applause ] thank you. A pretty remarkable coincidence that on august 26th, the day i was told i had lung cancer, was the same day that drug was fdaapproved. I had some help. So, ted, talk to us a little bit about why did you decide to become a biomedical researcher . So battling cancer is very personal to me. About 17 years ago i lost my mother to colon cancer. And at the time the treatments were basically surgery after surgery. Long recovery times. Traditional followed by traditional chemotherapies so she was sick most of the time. The chemotherapies were very harsh and toxic. And so that really drove me to want to work in the pharmaceutical industry to really help patients and make their lives better. So one of the Great Stories obviously and why you all both are here today, ted, you were part of the team that actually brought the medicine that treated matt to market. Can you talk a little bit about the process of getting a medicine from conception to actually being in a patient like matt . Sure. So to give you an idea, i have worked at pfizer for 16 years, and in that time ive worked on about 10 on cocology projects a only one has made it to phase one Clinical Trials and thats with hundreds of researchers working on that project. Thats just the start of the difficult process. The difficult process is getting through the fda phase one, two and three and then getting approved. So its very challenging, its very costly, its ve very tiry consuming, but we beat the odds. And that one drug i had go into phase one is now in phase three and is treating matt. Thats great. Its often not the case that a patient actually gets to meet a person that actually helped make the product that theyre on, and in your case, matt, helped save your life. I know recently the two of you met. Today isnt the first day the two of you met. Can you tell us, matt, and then ted what it was like when you actually got to meet each other facetoface . So we got to meet earlier this year. Its always exciting to meet someone that had a direct impact in my care, but being a scientist myself being able to meet a fellow scientist who had created a molecule that without i would very likely not be speaking to you all today is quite remarkable. So ill do excuse me, ill do then what i did no now and say, ted, thank you for saving my life. [ applause ] and, ted, how about you . Yeah, so, i dont get to meet patients often, if at all, and so it was really interesting to see how healthy matt looked when i first met him. He showed me the pills that he was taking and i hadnt seen that before either. So and i think, you know, you have to have a sense of sort of where we are today in oncology versus 16 years ago. Matt is taking an oral drug once a day and his quality of life is very good with very few side effects. So to me thats just very rewarding and inspirational. I agree. [ applause ] oka okay, so, laurie, every day you work to kind of sculpt Public Policy to help researchers like myself and patients like matt. Can you give us an idea of what the policy environment needs to be for researchers to continue to tackle the toughest Health Care Problems . Thats a great question. I think for me, like probably many of you in the audience, these issues are personal. Its hard not to know someone in your family or a friend who has suffered from a condition. For me it was my mom who passed away three years ago from the a. L. S. , today a condition that theyre are hardly any treatments for, certainly none that are curative. So i think it was important that there is an environment that sustains innovation into the future. As ted mentioned, bringing a medicine to market takes a long time. There is significant risk involved and the cost is very, very significant, and somewhere in the neighborhood of 2. 5 billion to get a new medicine to market. So its important that we have an environment that allows researchers to continue doing what theyre doing. Theres lots of things that help ensure that environment. Of course we have to make sure that we have a food and Drugs Administration that can review these new medicines. The science is changing rapidly so the fda has to be able to keep up with where the science is going. We have to make sure that once the medicine actually gets approved for use in patients that patients can get access to it and that they can afford those medicines. We have to also make sure that we have an intellectual property system that values innovation and allows companies to recoup that significant investment, and we also have to have an adequate trade and economic agenda that ensures that the u. S. Pharmaceutical industry can compete globally. All of those things, and quite honestly many more, are vital to ensure that in the future researchers like ted can continue to do their work so that patients like matt have the opportunity to live for hopefully a very long time. So if you can all join me in thanking both ted and matt for being here today, id appreciate it. Thank you. [ applause ] next up, please welcome to the stage general David Petraeus here with cnn anchor and chief washington correspondent jake tapper. Thank you, so much, everyone. Thank you, general. Got your interview, jake. I know. Ive been trying to get an interview with him for ten years. Thanks, washington festival, for finally allowing me to get an interview with him. I want to start with an issue that is a domestic issue, that i just wonder what you think of it, which is this debate going on largely led by President Trump about players who protest during the national anthem. I ask you because obviously you have decades in military service. And also youre somebody who has when moveon. Org was attacking you back in the days when you were leading the surge in iraq, you are somebody who has felt the slings and arrows of the first amendment. So whats your take . Well, you know what i said back then when somebody asked me at the National Press club what did you feel when you opened up the New York Times because i still read paper newspapers in those days and getting ready for what was going to be a very, very pressurepacked hearing on the surge, the first one that ambassador krocrocker and i cam back. I remember opening it up and thought about it for awhile. My response to the press was, i feel very privileged, i dont know what it was at that time, 30plus years serving in the military to defend the rights, the freedoms we hold so dear, including the freedom of expression, which includes moveon. Org being able to buy a fullpage ad in the New York Times that texas me personally, not just the policy. If you translate that into this situation, i feel the same way, but i have to say, im sort of disappointed, you know, now we have politicized football. You know, as mike hayden wrote in a wonderful oped the other day. It was the only two hours as a cia director, go to the games and lose himself in the game. At the end of the day, for the spectators, it is a game. Ive got it its a profession and a very tough profession for those on the field, but its something that brought people together and unfortunately now were seeing actions that really are dividing them. So in that sense, im sort of disappointed. I hope we can turn the volume down, turn the heat down and lets just get back to enjoying football and people not having to make political statements at the beginning of the games. The north korean crisis the north korean crisis is obviously foremost on the minds of the u. S. Military right now. To a lot of our friends in europe and in other parts of the world, they see this crisis as two erratic unstable world leaders, kim jongun and President Trump, squaring off each other against each other and theyre afraid of how its going to end. Is that a fair way to look at this crisis . And what do you think of President Trump matching in some cases the rhetoric that we have been that weve come to get used to from north korea . Well, a couple of items here. I think, first of all, to put this in context and to be fair for this administration, think you have to acknowledge that they are facing a reality that no other president has faced previously, and that is that this individual, kim jongun, impulsive at the very least, i dont think suicidal. Thats a pretty important assessment at the end of the day. But clearly given to extraordinary measures, if you remember how his halfbrother was killed with a nerve agent to the face in an airport and the ma maniachal way he executed his uncle and gaining too much power. He will have the capability to hold at risk a u. S. City, at least in the west coast if not further in with the Intercontinental Ballistic Missiles hes developing and a Nuclear Device that is miniaturized. Noting the one that was exploded a couple of weeks ago was at least 12 times the size of the bomb that was dropped to end world war ii in hiroshima. So this is a very big deal. And i think the administration has sought to get not just his attention because i dont think anyone is under the illusion that he is going to stop doing what hes doing because we amp up the volume. Think its really more about getting chinas attention. And making china realize this is a strategically Important Development to us and youve got to help us stop this where it is at the very least get to some negotiations and see where we can take it in the future. Do you think President Trumps rhetoric is aimed at getting president xis attention more than president kims attention . Very much so. This is military options obviously Everybody Knows there are military options. Everybody also knows theyre all very ugly to describe them. The proximity of seoul now to the Demilitarized Zone is much, much less than it was. Its almost a 25 million american circle that has pushed closer and closer north to the dmz over the recent decades and the thousands of just conventional this is whitehouse nuclear, biological or chemical weapons, just the sheer number of conventional artillery rockets, missiles, would be devastating in term of losses in the korean population. Now were looking at this kind of range that could actually, again, hit a u. S. City. So this is about china, which controls the umbilical cord that literally keeps the lights on in pyongyang, and reducing that and implementing the sanctions that the u. N. Security council has approved, which are quite substantial if implemented. China also should really keep in mind the strategic implications of this if this is not stopped where it is. When does south korea ask for its own Nuclear Weapons . Either the return of ours or its own Nuclear Program . What about japan, which has already reinterpreted its constitution to allow at least a collective selfdefense with their allies, the u. S. . What about the additional defensive measures. China doesnt like the thad going into south korea, the newly elected leader of south korea, as you know, halted that deployment at two of the six launchers. Now all four additional ones are going in. There is going to be much more. So then what happens again with vietnam . Do they need a Nuclear Program . So the proliferation aspects to this, the strategic implications i think are quite stark and one who very much wants to see proliferation limited rather than expanded because you never know ultimately some extremist is going to get his hands on even if its just a dirty bomb matters. These are individuals who have shown a willingness to blow themselves up in a battlefield to take them with us. What would cause them to hesitate at all for using some weapons of mass destruction or the components of it . It seems as though, at least based on chinas own government documents, that they are not limiting trade with north korea to the degree that would change the behavior of kim jongun and his regime. Yeah. That just came out. Weve just seen that the trade numbers for august were the largest since december. So not the direction that we were hoping to go. So theyve made the calculation well we dont know yet. I think this is going to play out over months. Theres going to be a lot of intense diplomacy behind the scenes. We do need a Strategic Dialogue with china about this to understand their red line, that you cant have a hostile power in pyongyang. No reunification of the korean peninsula. No millions of refugees going across the river into china, but then theyve got to understand our red lines as well and see if then together we cant figure a way to get them to halt where it is that he is now and then see if he can move forward in a more constructive manner. President trump took to twitter a few days ago after hearing a north korean official speak at the united nations, and he tweeted something that had convinced at least rhetorically the North Koreans that he had declared war on north korea. Are you ever worried i know you have great faith in the generals around President Trump, mcmaster, kelly and mattis, but are you ever concerned that President Trump may say or tweet something that could seriously escalate this crisis . Lets, first of all, by the way, i am very comfortable with the generals that are in the positions. I dont think as a general proposition that thats just always great. These generals are really extraordinary. Ive served with all of them on the battlefield multiple times. John kelly was a Division Commander in Anbar Province during the surge with the marines. H. R. Mcmaster with us in the surge in centcom and ask. Same with his deputy. Brilliant scholar, top of his class at west point. Successful businessman. Twostar in the reserves. These are really successful people and jim mattis and the others. A very Strong National security team. Arguably as good as any in recent memory if not better. And, frankly, i think the policy process and the policy outcomes generally are quite rational. Now, there is something to the socalled its actually called the mad man logic, if you will. Before you get into a crisis, its not all that bad if the other side thinks youre a little bit edgy. And, you know, nixon had kissinger go tell the soviets, hey, you know, nixons under a lot of pressure. He has a drink after dinner, you know, be careful, walk on egg shells around this guy. They sort of did. You know, you avoid getting into a crisis. The problem is, if you do get into a crisis, you dont want the other side thinking that youre youve taken the slack out of the trigger already and youre going to do something that otherwise might be irrational because they might do it to you first. So thats where my concern is. So the rhetoric has to be modulated and certainly some of the statements are not ones that i necessarily would have advised. I want to ask you about the [ laughter ] Great Potential as a diplomat. It was just lovely how he said that, wasnt it . We all have our own ways of saying it, i suppose. I want to ask you about the president s latest iteration of the travel ban. Which is quite different from how it was aannunciated on the campaign trail and quite different from how it was introduced such as it was several months ago. I think there is logic to this, frankly. It includes some nonmuslim countries. The distinguishing feature of these countries is that we do not have the confidence in them with either the way that they issue passports or biometric data or whatever it may be, and so as has been announced, this list will could grow, it could contract depending on how countries do in their responsibilities. So i think there is a reasonable logic to this. Its not something that singles out countries because of their faith, and so well see how it evolves as well. Im not sure it is quite as significant, frankly. I dont think were taking huge numbers of individuals from the number of these Different Countries to begin with, but, again, there is some substance to this. Secretary mattis was in kabul and he was discussing troop levels in afghanistan. What would you recommend we have over 10,000 troops in afghanistan right now i believe. Somewhere between 10,000 depends on your counting rules. Right. Right. And obviously this is a big decision about what the president should do. Has the administration reached out to you to get your advice and what would you recommend . Actually, the administration has done what ive been calling for for some time publicly, and, yes, i have obviously communication with folks in the administration. That was to achieve a sustainable sustained commitment. Lets back up. We went to afghanistan for a reason and we stayed for a reason. This is where the 9 11 attacks were planned. When al qaeda had a sanctuary in eastern afghanistan when the taliban ruled the bulk of the country. We went to ensure that that sanctuary was removed and stayed to ensure that it could not be reestablished. This is not about turning afghanistan into switzerland in ten years or less or anything like that. Our objectives were to get to Afghan Security forces being able to secure the country to a good enough fashion to ensure a sanctuary like that could not be reestablished and get afghan institutions to a point where they can govern afghanistan in an afghan way to a good standard as well. Thats going to take time. This is a very, very challenging country. The distinguishing feature here is that we cant get to the leaders of the insurgent groups. Thats why i told congress as the Central Command commander and my confirmation hearing to be the commander in afghanistan, we would not be able to flip afghanistan the way we flipped iraq during the surge. We knew we could do what we did in iraq. We absolutely couldnt guarantee how long it would take, but we felt if we changed the strategy in the way that we did and the surge that mattered most was the surge of ideas, live with the people instead of consolidating on big bases, take back control instead of handing them off faster. Above all, reconciliation with the sunni arab population that had been alienated by the central government. Give them incentive to support the new iraq rather than oppose it. Thats what made the difference and drove the violence down by more than 80 during the months of the surge. Never had any sense we would be able to achieve Something Like that in afghanistan. Very, very different situation. The Afghan Taliban south of the country down in pakistan and the Haqqani Network taliban, the Islamic Movement in uzbekistan, al qaeda preeminents in the heart of darkness, we want to make sure we keep them out of that sanctuary in afghanistan. We have a policy that i believe is sustainable in terms of blood and treasure and i strongly support what the president directed be done. And it will enable a sustained commitment. Were engaged in a generational struggle here and we need to acknowledge that. This is not the fight of a decade, much less a few years. This is and its a fight not just, of course, in afghanistan, but in a number of other countries in north africa, the middle east and central asia. And anywhere that there are ungoverned spaces there, extremists are going to exploit them. You have to do something about it. Las vegas rules dont apply in those areas, what happens there doesnt stay there. We have to lead it. We have the unique capability to do that. By the way, were doing it in a way where were enabling others to do the fighting. Were advising, assisting, enabling, but not doing the fighting on the front lines. That matters because that has to be sustainable, and thats what were starting to achieve. Very quickly, when you talk about this is a generational struggle. First of all, i know you dont mean one generation, you mean several generation. Do the American People and the people in Congress Need to wrap their heads around the fact the same way the u. S. Put troops in korea and germany for a decades, generationslong struggle against the soviet union and communist china, et cetera, that is the same way we need to think about the struggle of extremist islamic terrorism . I do, again, the analogies arent perfect, obviously. Those werent hot wars, these are, but i see no alternative to us being engage, advising, assisting and enabling with these assets weve built up during the course of the wars in iraq and afghanistan and elsewhere. I want to we should have a coalition. By the way, the coalition should include muslim countries. This is more a clash within a civilization. A fight for the heart of the islamic world than it is a clash of civilizations as sam hunt talked about. Far more muslims have been killed by islamist extremists than have than those of other faiths. So this is going to be something thats going to be enduring and we do need to understand that, but thats why sustainability and a sustained commitment have to be the elements that guide our thinking. We only have two more minutes. Rapidfire round. Im just going to hand it over to you for this. Youre the former director of the cia. I havent even gotten to the cia stuff. Youre the former director of the cia. What crosses your mind when you hear about the russian interference in the u. S. Election and the way that they exploited our own freedoms to influence the election . Very, very concerning. And, of course, we still dont really know all of it. Thats part of the investigation thats going on. Theyre now exploring what russia did so skillfully with facebook to plant ads that were divisive. I mean, all of this is intended to divide our country rather than to enable our normal democratic processes to work, which can be somewhat partisan at times as it is. So it is very, very concerning. Look, there has always been some of this activity thats gone on, and, you know, far be it we perhaps have engaged in some of that over the years as well, although nowhere remotely near what theyre doing, not certainly in recent decades. But this is this gets at the very heart of, again, the freedoms, the blessings, the system that we hold so dear, and they are trying to take down that system. They see it as a threat to them, an enormous threat, and they employed very, very innovative and dclever and really quite terrible activities to try to tear down the system that we have spent so much to build up. Ladies and gentlemen, former cia director and general David Petraeus. Thank you. [ applause ] and now, the founder and ceo of milk bar, christina tosi, here with atlantic Senior Editor derek thompson. Good morning. Wow, good morning. Good morning, everyone. Im extremely excited for this interview. Milk bar is one of new yorks most famous emporiums of dessert. Its flagship location is at 13th and second avenue, which happens to be eight blocks exactly north of my apartment. Im very excited to parlay this interview into a lifetime of free cookies. Thats unethical. In case my boss is watching, im kidding. If youre not familiar with milk bars incredible lineup, it includes cereal america softserve, corn flake chocolate marshmallow cookies and the famous compost cookie, a Chocolate Chip Cookie one might find in a compost. Coffee, chips and pretzels which happens to be my diet. How did you fall in love with baking . I was raised by an incredible family. Strong women. The ma the it was our love language. Its what we did for other people. For the communities we were a part of. I was the youngest. I was the lowest in the pecking order. I was always ushered into the kitchen. Sit on this stool, hold this wooden spoon. So the spirit of baking for me is this very warm nurturing spirit and its the place that makes me happy, spending time in the kitchen. We had a couple of Companies Come in yesterday, boeing x, the research alphabet. Both famous for their research and development. When you think research and development, you think massive tech companies. You guys have an r d lab. Tell us what you do there. Our entire kitchen at milk bar, whether we move a kitchen in new york city, we have an insane kitchen just around the corner here in d. C. On i am new york. Each of our kitchens has an r d area. It sort of makes me tick. Im a very right brain left brain person and milk par is very much an extension of me. Being creative and exercising that part of the brain is is like comes handinhand with the business and its something we put a lot of value in because what we do is, like, has ordinary roots but its extraordinary, and having that thoughtful time to say, like, how can we reinvent the apple pie and, like, take chocolate cake and push it even further is just as important to us as making you a fresh, delicious compost cookie every day. The Restaurant Industry is on fire right now. Its added more jobs than health care. I feel like every single city in america thinks its going through a restaurant renaissance, indeed, most of them are. That means there is enormous competition. Quite frankly, everybody can make a cookie, not a good cookie, but anyone can make a cookie. Its true. What is your theory for what makes milk bar stand apart . You know, i opened milk bar nine years ago in new york city, and my real goal was to i always had this dream of opening a bakery. I didnt want, like, a pony or to be a princess as a kid. I want mood my own bakery. I wanted a Cash Register to punch in the numbers. My moms an accountant. Did you have a little bakery as a girl on the street . Did you sell sugar cookies . My mom wouldnt let me have an easy bake oven. Shes like youre going to learn to work the real oven. Thats all there is to it. I had this entrepreneurial voice in me at an early age. I went to Culinary School and worked in highend fine dining restaurants and paid my dues. For me, i knew my voice and spirit is much more accessible than that. Im very much a food for the people, but i wanted to open a bakery that added something, like, i can make a great Chocolate Chip Cookie, but everyones had a great Chocolate Chip Cookie and everyone has their favorite. Rather than compete with a great Chocolate Chip Cookie, it was about how do i take the spirit of a Chocolate Chip Cookie and add to it . Add to the dialogue, create something that doesnt exist in this world that challenges the way that we think about this world, the food in it and what a cookie can and cant be. And for me thats a very big part of the business mentality of milk bar that ive built and grown. And anyone can make a cookie, but, you know, for me, i am like a very, very trained pastry chef that brings the so everyone like the bakeries that come after us and this insane exciting electric emerging food scene is something were so excited to have helped start and to continue the conversation up and to support these great, insane, talented younger generations of chefs and entrepreneurs that there trying to carve out a space for themselves in the food industry. My sort of philosophical theory why milk bar had become so popular because i had watched it grow and now you have 12 loclocations in new york alone. When youre a kid and youre just learning how to cook, your approach to cooking is like whatevers in the kitchen, right . You go in the kitchen, you want to make a cake and i have chocolate chips, i have pretzels, i have potato chips and coffee ground. Well, fine, ill pull it altogether and its absolutelyple ways. An elegant version of the most familiar thing in the world which is just being in your kitchen and trying to put them together in a new way. For me its about capturing the spirit of those little moments in life that make you feel warm and safe and loved and comfortable and feel a little bit lighter if its feeling heavy. We always joke at milk bar that our mission is to make life a little bit sweeter obviously through the sugar in a cookie or a slice of layer cake or crack pie. But also in our attitude towards life and Customer Service where people are coming to milk bar because theyre having a great day and its our job to making it better. Or theyre not having such a great day and theyre looking to us to bring that lightness and that permission for just a moment to let it all go and we do that through our food. We joke like when things are getting very intense building this insane milk bar empire that when thijs get really crazy, you know what . Were making cookies. What we do has lightness and a joy and reminds us to take a moment to not take ourselves so seriously and thats helpful. And we give people the permission to my goal is come to milk bar and say why cant i go home and rummage through the paptry and feel inspired to be creative and to take a risk and to put myself out there. I think giving people sometimes the reminder is important. Food is my vehicle in translating that message. Now im looking at the millennial generation which is disportiont number of your sales. Theyre thought of as being a healthy generation or at least trying to communecated their health. Theyre going to fly wheel, theyre into the next latest green whether its kale or baby lettuce. Dont forget quinua. I will never forget it. But theyre obsessed with this idea of being and projecting health. How does a cereal milk soft serve company fit had the to that picture . Most people dont realize but the cereal milk soft serve, a whole portion is 135 calories. Its not about calorie counting when you come into milk bar but theres a few interesting things about that. I look at this millennial generation. You could put it into this bucket of its about being healthy but i look at it more as them being a generation of living their best life as opposed certainly health and well being acknowledging this pursuit of balance in their life is important. But if you think about the price to entry fr a 10 or 12 salad or a 30 or 40 workout class, all of those things are an indulgent, just different than coming to get a cookie. And the work hard, play hard mentality of it. You cant ride bicycle and sweat it out for an hour every day and only eat salad. You need this balance of your life. But all of those moments bring the participant joy. You go to sole cycle and im a boss, i feel like a pro. You go to milk bar for your corn flake Chocolate Chip Cookie. You know its a special moment youve carved out in your day and it empowers you in a same but different way. I think its about being well rounded. Were seeing more of the wow, are we that excited about salad . Yes, we are. Are we that excited about cereal milk soft . Yes, we are. I think its about being mindful about these moments where you have the opportunity to make a decision and say whats going to make me feel great about my day and myself . And having the power to make those decisions is the culmination of all those things. I live seven minutes away yes, theres a clap. I live seven minutes away from the closest milk bar. Ive timed it. Seven minutes away from living your best life every day. A mile run or walk. But its interesting because even though i live so close i see more milk bar on instagram than i do in the neighborhood. Its so prevalent on social media. And people take pictures of the most beautiful candy. On instagram yourself with oreos and twizlers. Could you imagine except for you. Could you imagine milk bar having the same rate of growth if it werent for instagram . Do you need instagram in order to keep up your current rate of growth . I think instagram for us is a really fun way for our voice to travel further and wider than before. I mean i always laugh about it because when i opened milk bar nine years ago, instagram wasnt an app that probably anyone in this room had downloaded on their phone. In the same way that food wasnt this buzzy exciting thing nine years ago. Its become this revolution. And for me instagram is a really fun way to reach more people. We have stores in new york, a store in d. C. , in las vegas and toronto. And we ship everywhere in the United States. But instagram is like this instpt connective point in someones day to reach you and you cant get your hands on a confetti cookie. So you go on instagram to get your fix. Were visual people. I eat with my eyes first or at least thats the thing that draws me in. For me milk bar is more than the food we serve. Its a feeling, an approach. Its arguably a lifestyle and instagram for us is an insane incredible tool to round out why you feel special when you have a slice of crack pie. Im going in. Its that moment where you can share or celebrate or that you can learn and participate, even if you only have a minute and youre not trying to go on a run. What do you see is the future of food . There are people thinking about selfdriving cars, lots of Companies Working on drones. Is the future of food for you can you imagine in 20 years milk bar cookies being delivered by drone in self driving uvens canvassing the streets of manhattan . 100 . Beyond manhattan. First of all i love where technology has taken us in the past five years, 10 years. You think about how quickly the world changes from day to day and week to week. As like the ceo of milk bar im constantly making my five year plan, 10 year plan and i have to remind myself making those plans are important but the wild world of food changes every day. For me the dream of a freshly baked cookie coming from drone out of the sky, like nothing could be more magical and powerful. You come to our r and, d kitchen, you can practically go swimming in a tub of rainbow sprinkles. Bringing that magic, finding a way to bring more of that magic to people is certainly the future of food. Experience like food experiences are going to continue to be something that grows and builds in the future of food. I think people daeths were always going to come in and out of these fads of food, whether its what green, grain, is it vegan . Is it not . Is butter good for ous or bad for us . Those things will always change but bringing the emotion of food out and making it into an experience, well continue to see that in the most exciting way possible and i look at that as one of my biggest, most exciting challenges. Thank you so much. Thank you