How it might be, those barriers might be remedied. Discussion about government failures are highly theoretical, rhetorical, deeply politically, philosophical level rather than at an analytical level based on empirical evidence. And so thats, if i have a contribution to make to the people at cato, that may be to enrich that particular kind of evidence for conclusions that you probably have no need for fortification about. Kiddo followers are aware of and indeed have been a size in your own minds. I have a lot of data on the decline in Public Confidence in the federal government. I will only mention a few points of special interests. Even among democrats, there has been rapid and precipitous decline in confidence. 41 have favorable views of federal government in 2013. Thats 41 of democrats. That is down 10 in one year and this is before obamacare was launched. According to the Brookings Institution, 56 of democrats believe that the federal government is mostly or completely broken. And i mention that the statistics were gathered before the obamacare fiasco. In its rollout, tom edsall in an oped in the times yesterday suggests that the consequences of that rollout are far greater dan is anticipated by most political observers he thinks is going to ramified throughout the next several elections. What is the biggest threat to americas future according to the public . 64 say it is Big Government while only 26 said the business. And this polling was conduct that only a few years after the recession. So there seems to be a very telling point of departure. In 2011, 79 of those polled were frustrated or angry with the federal government. 74 said the same thing in 2007 before the recession. One of the reasons for this decline in public conference in the government i propose several explanations, but the one im going to concentrate on than the one that concentrates the bulk of my analysis is from a straightforward one. The government performs very, very poorly. When i say the government i am referring to the federal government. Not other government and im referring to domestic policy, not national security, military or Foreign Affairs policy at the book is limited in those respects. So thats been a subject when government fails and there are a variety of theories as to why the government performs so poorly. An emphasis that will not surprise those of you who live in washington is the explanation of partisan bickering and congressional paralysis. The democrats blame the republicans. Republicans blame the democrats for any failures but they are prepared to concede. I emphatically disagree with this. If you examine our history of logical discourse, it has been trained interests, uncivil, angry and furiously partisan in the very, very beginning. Some of the greatest achievements of the past the Intercontinental Railroad and the hoover dam and interstate highway system were accomplished only fitfully enough to protect the disagreement by policymakers. Polarization irq is not the cause of our problems. It is the consequence of our problems. Theres a remarkable correlation than 18 confirms this point of view. First is the growth in Government Spending and policy ambitions has paralleled almost perfectly if you chart them. The growth in public disaffection in contempt for government per capita spending by the federal government today is greater than in france, germany and the u. K. This growth occurs in good times and in bad. This unlinked, senators and the keynesian cyclical uses of government and it doesnt depend whether republicans or democrats control what goes on in washington. The debt to gdp ratio of the federal government exceeds that in most e. U. Countries and also exceeds the latin american average just to provide some context. This growth of the federal government isnt scared by a number of factors except to those who study these matters very carefully. One is the immense growth in private contract in by the government. The immense participation in the implementation of Government Programs by nonprofits in state and local governments. The myth that the United States has a small Public Sector and is the welfare state lacquered although perhaps true in some comparative terms is that it is false and one way of understanding the top and is summarized in a summarized in the book by james q. Wilson, delete james q. Wilson who distinguished between the old system in the new system. The old system they rate had a small agenda. When someone proposed adding a new issue to the public agenda, a major debate often arose over whether it was legitimate for the federal government to take action on the matter. For the government should take bold action under the system come in the nation had to be facing a crisis. Succeeding crisis of the government bureaucracy somewhat larger than before people in the crisis ended come in the of extraordinary powers ended. The new system is characterized by a large policy agenda. The end of the debate of flagitious me Government Action except an area First Amendment freedoms. The diffusion and decentralization of power in congress and the multiplication of Interest Groups. Undergo system checks and balances made it difficult to write the program and so the government remained relatively small. Under the new system, checks and balances make it hard to change what the government is already doing and so the government remains large. So my central theme, the core idea of my book is that federal government policy failures are caused by deep recurrent structural systemic, endemic conditions. It doesnt matter which party is in power. It doesnt matter what the state of the economy is. I think that as a result of this and as a result of my analysis of the reasons for this, liberals, conservatives and may dare say libertarians have an enormous stake in understanding these reasons. Well, how do i analyze the reasons . First let me say a bit about my methodology. I realize social science assessments by economists, political scientists, think tanks, ceo, check your generals of federal departments. My criterion for success or failure is costeffectiveness. I devote an entire chapter to explaining what i mean by costeffectiveness in the methodology success can especially cost benefit analysis to measure affect fitness. I believe it is a very balanced and federal assessment of cost benefit analysis, which is itself an assessment methodology. The principles for use in light of his shortcomings. But that is what i am talking about when i discussed these. But couldnt measure success in other ways. I do think any of them would be very satisfied to recover certainly political successes is hardly be justified use of that term nor does the continuation of programs over long periods of time in multiple administrations need a valid measure of success or failure. So what are the structural reasons for failure presaging these introductory remarks . The first is political culture. The political culture in the United States imposes enormous constraints on the effectiveness of government policy, whatever the government policy will be, although certain Government Policies are more by these political constraints than others. Let me emphasize that the outset that many aspects of the political culture highly dishonorable and not not to be changed. But even if they should be changed, they cant be changed very easily. Indeed, i think it is virtually impossible to change these features of our culture precisely because they are cultural. They are deeply embedded in the way in which we view the world around us. The first is, to show a son. Thats the most familiar to you and one that the Cato Institute emphasizes in its own work. A second is decentralization, which makes it very difficult for federal policy to be implemented or for the federal government to know how his policies will impact those who its intended and tertiary. A third is protection of individual rights, a secret mission and our culture and one that makes it very difficult for government to do whatever it wants to do effectively because of the strong protections given to individual freedoms. A fourth constraint is Interest Group pluralism, which is perhaps more robust in the United States than anywhere else as one of the glories of our system, but also a feature of our system that renders either impotent or feckless and blundering. Another is the acceptance of social and economic inequalities by the vast majority of the population. That this may strike you as somewhat odd, but when one compares the United States with all of their liberal democracies, we tend to care less about equality than they do except for equality of opportunity for qualification. We care less about equality results than any other societies. We worry less about it for deeply embedded reasons. So the policies that are designed to promote equality of outcomes needs the kind of resistance that they would not need another countries for efforts by government to create environments inefficiencies along the web as they must invariably do. Another feature of the environment is our moralism. Moralism derived from our religious convictions and the strongly religious basis of our social values and the nature of our politics which lends itself to political moralizing partly because it is mimicking the religious convictions of the American People and partly for other reasons. Another important trait of social diversity. What that implies is a uniform federal law cannot be nimble enough and flexible enough to reflect the underlying needs and desires of the population. Again, we are unique in our social diversity in modern liberal democracy for variety of reasons. Not simply for reasons of immigration, but also because of religious diversity and economic system. Another important constraint on the effectiveness of policymaking is popular suspicion of Technical Expertise and official discussion. Public opinion, very powerful in the United States, more powerful i. T. Or than other liberal democracies, which is one of the reasons i think why, for example, one of many examples Capital Punishment is sustained in most american states even today worries the elite tend to disfavor capital just punishment. The United States, the people broadl the political effectiveness of a group depends on its ability to manage incentives so as to overcome structural obstacles to collective action. Officials a powerful incentives to provide voters registered for shortterm benefits and all those benefit. The political dynamics of Public Policies depend on how it distributes benefits and costs among voters and groups. Much political activity consists of near interest logrolling that the expense for taxpayers, said team that arnold kling has written about. Moral hazard is the major source of senate race programmatic failure and propositions of that kind. The examples that i provide and explicate include many come in many different kinds of programs, Social Security disability insurance, pension benefit guaranty corporation, sammy and friday and a host of others. The next systemic defects if you will come all those seats are not defects as they sit before. Our system our society is rich and successful as a society. By reason of many of these effects. But the next one is what i call collective directionality. Here i emphasize the voters ignorance about public issues. A literature that many of you have encountered in one way or another, perhaps Daniel Kahnemans recent book. The basic research was conduct did buy condominiums tversky and has now become a very, very much discussed, not only the academy, but even in the halls of congress. Cason steamed whos worked, many of you know, also relies heavily on most literature. A third literature is one that has been developed by my colleague, you know, dan kohn, which he calls cultural cognition. What he means by that is on a large number of public issues when he tests for peoples views on these issues Committee Finds that those these are almost entirely insensitive to new information that people come to these issues with greek teeth cultural stereotypes and ideologies than they are very, very difficult and you can pretty much predict by knowing what those ideologies are, what their position is on Climate Change or abortion or any number of other issues, where evidence money offered the opinion of a rational individual. Another extremely important system and problem is poor information. This phase i hope no surprise to you. I hope you marinated in the work of friedrich von hayek, who emphasized the nature of the information problem better than anybody else before or since. Some of the policy manifestations of that are your alcohol, tobacco and firearms explosives information about gun use and their information is very limited and so forth not because these officials are or illinformed, but because congress has made it extremely difficult for them to collect this data and maintain this data, much less analyze and employ it. Provoker rule, which i discuss it some links, not that ive let it read it as another example of how poorly informed those who write our laws and regulations are about the intricacies of the ways in which markets another exareas of our society operate. So two weeks after the row was issued, you may not have read this. Its not widely covered by the press except for the wall street journal like hank is that banking authority, regulatory felt obliged to cut back on the vocal ruling so far far as to apply to local banks. Via . At effective local banks in the way the rulemakers had not anticipated these effects were dyer indeed. Just one example. Another feature of our policymaking system is as rigidity or adaptability and flexibility. Here i provide a number of examples again the Postal Service has not adapted well to the new technological market facts. Again, not because they are in different to these changes. They actually have tried hard to convince congress to allow them to compete with fedex and other services. Congress has made it almost impossible for them to do that, in some cases prohibiting what would be the rational response to that. Another example, the Voting Rights act of 1965, the Supreme Court was wrong on its decision last year to strike down the section for formula of the jurisdictions covered, but it was actually writing it denunciation of the anachronistic nature of the formula in 2013 as distinguished from 1965 when it was enacted. A six element is the lack of credibility needed to secure the operation of other actors. This is extremely important and quite interesting in part and also dismaying because there is no good solution to this problem. The problem is this, then you are going to introduce other actors can the state and local governments or private actors to act the way you want them to act in order for policies to succeed, you have to assure them the rules of the game are going to change, that they can invest safely in the nature, the details of the program. But government cant do that. Why cant it do that . Buckeye perfectly good reason. Government is supposed to be accountable to voters in changing preferences and so it cant keep its promises if you will and there are very few if any techniques that will enable the government to bond itself and luscious up to the mast with respect to policies in ways that was to care for participation of those resources it needs to succeed. Or for example, obamacare actually expanded medicaid, but in order to induce states to expand their Medicaid Programs in the desired fashion, and offered to pay 100 of the cost of the expanded medicaid for three years and after that with aa think 85 . Many states simply didnt believe it. They thought it was like being given a gift of a baby elephant. Thats fine when you see the offense and you have to feed and house them. So lots of states are not adapting these otherwise quite possible and perhaps even desirable changes. Then theres the problem of mismanagement, which is endemic, structural. I have a large, lengthy discussion of fraud, waste and abuse. I dont need to rehearse at air. Except to say much of the fraud, waste and abuse are the result of structural factors embedded in the way in which government makes its decisions, including the complexity of programs including the very poor design of reimbursement. A major theme of my book is that market power if fundamental impediment to effect Public Policy in many of you will say and i will agree in most cases that is a good thing. Consider the features of markets that dog government efforts to attain them or to live with god. The speed of markets compared with the incredible slowness inflexibility of government. The diversity of market and government regulates for the rather uniform binary fashion. You are either in or youre out, guilty or innocent. Youre in this category, not in that category, whereas the markets cater to the university. They even induce additional diversity where they think they can find a niche that is profitable. The information finance markets place on regulators are very, very high and demands cannot be met by regulators. The substitution effect in the markets means that the government adopts a policy it will usually raise the price, sometimes attempt to lower the price, but it often raises the price of a particular service and the market responds by trying to find other ways to meet that demand at a lower cost for Higher Quality and that may come as many examples i discussed in the chapter undermined, if not utterly defeat the government policy. Theres transjurisdictional effects. Markets do not accept jurisdictional lines. And so, not only is this a problem in terms of International Competition as the apostle rules, inking in international finance, but the creation of informal or black market as a result of the ability of markets to evade the kinds of lines government draws. Political influence of course is exercised by Market Participants through campaign contributions, through the influence wielded by Large Companies and other mechanisms. That tends to subvert the effectiveness of parents of Government Policies committee where those with those policies might otherwise be coherent or coherent and effective. I have a considerable discussion of political influence by markets on government and i think it is much more complicated than is usually understood. Markets do indeed exercise a great deal of political influence. On the other hand, most of the influence that the exercise is not particularly partisan and secondly, it represents the actual real world individual effects of government policy on the part of its consumers, its employees, its investors. So those are real factors that ought to be represented robustly in our political process. And then there are enforcement obstacles that market posed to government. There are lots of reasons for that, which i discuss in some of them are deeply rooted and unlikely to change. Rational expectations, a concept that economists have developed to explain why the market tends to anticipate policy changes and to incorporate respond to policy changes before the policies take effect and thereby neutralize the intended effect of those policies in many cases. Two other effects of markets, one is there anoka substitutes for market ordering. The two major lines, alternatives to market ordering our law, government policy on one hand and social norms on the other. They certainly have their roles to play, that they are no match for market in most areas of Public Policy. The final effect of market is moral hazard, which is immense, and then suddenly seen some of the consequences of the moral hazard in recent years, particularly in connection with the great recession, but there are countless programs that exhibit this moral hazard. That is the tendency of people to act in ways that will advance their interests when the government through its policy makes that activity for that service less costly than would otherwise be. Crop insurance, flood insurance, lots of examples. Fannie mae and freddie mac are very good sobering examples of that. The next fundamental structural problem that i devoted a very long chapter two is the obstacles to implementation. These obstacles are important. They are not readily dispensed with. They are not circumvented and government attempts to overcome these obstacles and a variety of different ways and i decided this chapter into the following categories just to give you a flavor of what i mean. Attempting to perfect markets come to supplement markets, for example, to infrastructure. Have a discussion of amtrak, for example, which i came down today and the Economic Disaster that it has been. Suppressing markets, simplifying market. I have a long discussion in this rubric of Student Financial aid programs, a disaster about to happen if not irony upon us. The ethanol program, many other examples. Redirecting markets as in the effort into the Community Reinvestment act to force banks to invest in areas that they would not rather invest in. Theyve affiliate to invest in those areas must be due to racism. Reintroducing market, modifying markets and recruiting markets. By recruiting markets, needs partially the environmental area to use Market Mechanisms to render a regulation more effective. Thats been very, very limited. There have been successes with that. Efforts to expand that have been largely unsuccessful, but that is an area in which i think markets and Public Policy might be more compatible. Then i have a chapter on the limits of law, inherent limits above. The midst of laws that assert themselves whenever one uses slot as an instrument of Public Policy, which is virtually all the time. Thats the form the policy takes in show i discuss it ubiquity, the tradeoff between a simplicity and complexity, ambiguity, discretion. These are all endemic features of legal regulation. The procedural apparatus that goes along with it, the inertia that it creates and then the crowding out of spontaneous lowcost cooperation by markets. And then i have a chapter on dean which i emphasize the problems created by professional influence, the extraordinary penetration of bureaucracy by congress, often for good reason, but with effects on policy coherence. To legally send that bureaucracies bureaucracies tend to cultivate peer leadership problems, here i want to read how my doing on time . This is sort of amusing premise that if i may, i your reader, i bit you did not know therere not many many officials who are nominated Deputy Assistant secretary can associate secretary, deputy administrator, chief of staff to the associate Deputy Assistant secretary and that this layering in every department. I also discuss compensation and again, these are endemic. They are not contingent. The difficulties with discipline, the Senior Executive service, the difficulties concerning lowlevel compliance. Contracting out by the bureaucracy and poor management of contracts and the isolation of the bureaucracy from the realities surrounded. None of the chapter on the policy successes. Because enough time i wont rehearse those. Ive just written an oped which i hope the New York Times is going to publish, which tries to identify what i view as policy success and according to the criteria that made fans in a tries to draw lessons from those examples as to why successful policies succeed where is the vast majority of policies do not. We can discuss that in the q a if youre interested in that. Finally, i have a chapter on remedies. These remedies are incremental because im an incrementalist for other reasons why everybody should be an incrementalist and that the world is simply too complex, much too complex for us to be able to predict with any confidence at all for what the effects will be. That is to say ive decided not to propose fixes for particular programs, but rather to identify remedies that might cut across all Government Programs and i have organized them according to each of the Structural Conditions that ive just laid out for you. So i am out of time and i appreciate and i look forward to dr. Klings comments and your comments. Thank you. [applause] before i let arnold kling take the chair, i should mention he too is the author of six books on health care and most recently ive recommended the three language of politics. I really want to know if this list of obstacles to Government Action, which are features that im hoping we would hear thoughts. That certainly anticipate some of my comments. I appreciate walter, the opportunity to discuss this important new book. The author refers to himself describes himself as a militant moderate. Thats a phrase that includes both alliteration an oxymoron. I might describe myself as a lowkey libertarian, which also includes alliteration and probably many people with income is an oxymoron. But we wouldnt always necessarily have described ourselves the way we describe ourselves today and we might not always describe ourselves the way we describe ourselves today. The book actually struck me as very transitional. That was the word that came to mind. That is it could be profitably read by and perhaps profitably written by someone who is in the process of reevaluating their views and perhaps changing them. I had this weird idea that we could take 40 random ordinary kneejerk liberal College Student and split them into two groups, give 20 of them a copy of this book and give 20 of them a placebo and then come back in five years and see if the Treatment Group doesnt have more Libertarian Senate because i suspect it could be an effect of gateway drug. You can think of this book is placed somewhere along the journey and in spiritual terms, think of the book is climbing the mountain of men along a path, which eventually leads to the estate of Higher Consciousness that he called libertarianism. Its not at the summit and it takes a couple important steps up the mountain. What to talk to my remarks about the steps it takes up to the mountain and the remaining steps it could take. The first step that takes up the mountain if the conference very forthrightly the phenomenon of government failure. He doesnt sugarcoat it, he doesnt say that its the exception rather than the rule. The fact youve heard in these roles like endemic and systemic many times in his talk and that gives the flavor of the book very well. So that is the first step up the mountain. The next step up the mountain is that he moves away and quite clearly rejects what some of us call it the intention heuristic for Government Programs. That is saying if the intention is good, then the program is good. Said he was very forceful that their programs need to be evaluated in terms of effect admits and cost effectiveness. Thats another good step that will come out. Some further steps taken up the mountain. Once that this concerns the chapter that he kind of lost over, which is a chapter on government successes. I thought that the criteria for government successes that to be tightened up a bit. For example, he says Social Security is a success because the old people are getting their checks. At least they are now. But the system is not in a financially sound basis and i think you need to be careful about calling a success because just because people are receiving checks now from something on a financially at a basis from a creature are was set for many years that Bernie Madoff was a success. A couple other programs are a couple others successes that he describes, which the sunni led government backing away from a policy those who conceived to begin with. One example is the 1965 Immigration Reform are we got rid of racist immigration quotas and that was good to get rid of them. But i am not sure that success is the right way to describe that. Next was been thinking of the 1978 airline deregulation, where prior government was engaged in restricting entry in restricting prices for airlines, Consumer Airlines antiregulation backed away from the illconceived policy. I think it sort of sit just that Government Intervention is somehow successful when in fact the success wasnt backing away from an illconceived Government Intervention. The next step up the mountain has to do with economics. I think that the author has a very good grasp of neoclassical economics are not forget being, but you dont want to take it too seriously. Neoclassical economics is focus very strongly, so i have access to the concept of equilibrium and pays relatively little attention to innovation. The kind of economics i like to do is the other way around. Pays a lot of attention to innovation and doesnt believe markets are ever equilibrium. We dont worry whether theyll get to the good equilibrium are bad because we dont think markets with its equilibrium at all. This process of innovation you can take of his having three steps. You have to introduce experiments. You have to learn from experiments in the mass of be evolution as a result of that learning. Government is inferior to markets in the first and third steps. That his government is not going to try as many experiments. No one organization has the ability or the will to engage in lots and lots of experiments. But in a market, with one organization wont try some thing, another organization well. The third step of evolution, which means throwing out the things that dont work in keeping the things that do, again the market has the discipline of profit and loss whereas government only has self evaluation. No organization will self evaluate what the ricker of the prophet of our system. I was reminded of that a couple weeks ago. The economics of the report came out and it has a chapter called evaluation as a tool for improving Government Programs. That chapter reads as if they have taken some of the principles of this book to heart, that the Obama Administration has taken the principles to heart, saying we should evaluate Government Programs were effect this, not just use the intention aspect and moreover, the chapter gives me the sense that they took these principles to heart five years before the book was published because it says the Obama Administration initiated a government wide effort to focus on evaluation as soon as president obama took office. Knowing what we know about Government Programs, either independently or from reading this book, you would think that switching from the intention to evaluation methodology should produce fat results. I mean, there would be cutbacks in terminations, blood on the floor, a real horror show. But dont worry, you can take your children safely to read about what happens as a result of this initiative on policy effectiveness. The worst thing that happens is a couple small programs get told that they are not going to get their funding increased until they make some so what do teenagers, the vast majority of teenagers out there have the selfrestraint and self knowledge not to go driving down with five of their friends to go bar hopping. But because a small minority cant have that selfrestraint and knowledge and legal restraints that prevent them from doing not and i feel the same way about the highly educated technocratic elite. That is i think most highly educated people in this country, people in business, and all the facets of Civil Society have the selfrestraint in the selfknowledge not to impose vast policy schemes that go beyond what anyone can understand about our complex system for go beyond anyones capability of administering. Unfortunately, there is a minority that does not help that selfrestraint and selfknowledge and a lot of them end up in places in the media, academia and high positions of government. And so i think that the key is to add even more cultural norms and legal restraints to curb their behavior. So we are getting to review this book has taken a step up the mountain by really delving into and focusing on government failure. It takes another step up in knots and by rejecting the favor of cost effect this evaluation. A further step would be used to be a little more rigorous about the definition of a success. Another step would be to look at innovation economics, not just neoclassical economics and look at the impediment the Government Faces in both the experimental phase of that process in the evolution phase of the process. Finally, the next step would be to reconsider the assumptions about the highly educated technocratic elite. That is i believe if i had the authors Comfort Level and confidence in the technocratic elite, then i too would be a militant moderate. On the other hand if you had my sober assessment of the technocratic of these deficient these, overconfidence, lack of selfknowledge and lack of selfrestraint, then he too would be a lowkey libertarian. [applause] would you like to Say Something in response . Yes i will try to be brief because i agree with a great deal of what he said. Let me just identify the point i wish i want to save a bit more and then entertain your questions and comments. Terms of the criteria for success, i am much more careful than dr. Kling suggests in my discussion of these programs. Social security, for example first of all i say that these when we arrived in on exactly who design these programs differently. The fact Social Security implies a mandatory tax a mandatory retirement scheme whereas had we in 1935, had we initiated Retirement Savings accounts for iras and other sort of more voluntary marquetry schemes come we might be better off. That might be true, might not be true. And sort of agnostic on a question that large, even though i am a highly educated technological elite person. I think any sensible person should be pretty agnostic about that question, even though libertarians tend to want to redesign these programs on the basis that the existing programs have certain defects and therefore these other programs they havent yet designed and implemented would not and im very doubtful about that. Social security talk about precisely the challenges that lie ahead, the often see that looms. In the case of Social Security and began taking the basic design of the program as a given rather than proposing some altogether new way of financing retirement, i think the repairs of that system are fairly straightforward. Take a while for the politicians to come to terms with them, but i have no doubt that they will. Immigration reform i am very clear in my discussion of that at the abandonment of the National Quota is extraordinarily important thing. The much more diverse immigration flow has been one of the great achievement of American Society unmatched in any other country in the world. But there are some Serious Problems as we all know. I wont reverse that particular debate. I wrote a lot about what needs to be done to fix the immigration system. The First Airline deregulation, hes quite right that it is a return to the market. They say there that it is a policy, not a program. That is to say i think we should count as a success these days the government repeal of bad programs under a theory that they dont work in their absence will actually improve social welfare. Airline deregulation were generally as an example of that. So that says the criteria for success. I also want to size reasonable including reasonable heat can disagree about a particular program and you have my view, but others might disagree. As far as neoclassical economics, i couldnt agree with him more and i dont think that anything in my analysis suggests that i am indifferent to innovation or that i am satisfied. I have been reached in a static in a static world. The road is not static and they certainly endorse dr. Klings steps for emphasizing innovation and in my remedy section i discuss a number of ways in which that might be done, in putting the sort of social science equivalent of a randomized controlled ids, which is the Gold Standard for Biomedical Research and assessment and policy areas. There is a new small but emerging literature on how that might be done. So theres really no disc treatment they are. As far as the heat category, i dont get screwed that i want to turn off the heat, nor do i celebrate this book at all. But i have a somewhat different and perhaps less categorical approach to these questions and that is i want to look at each of these programs on its own merit, any program that is possible. Not any cockamamie idea, but anything is possible i want to look at it on its merits and theres often technological elites are instrumental in assisting those programs enough in condemning those programs and initiating change. So im all for favoring heats, using heats where they do the right thing in my conception of what the right thing is and opposing them when they dont. I dont think theres anything disqualifying about highly educated technological elites, and i dont think that they have the, i dont think they they certainly are exhibit at times and often more systematically a certain of the biases that dr. Dr. Cling recounts, but they also tend to be open to new evidence than i think nones are, and they have the techniques, theyve mastered the techniques for adducing and designing and then evaluating evidence that we need to make better decisions. Thank you. We have time for a few questions from the floor. Before we do that, let me talk a bit about the logistics of the next 20 minutes. After the questions we are going to take a break for lunch. Lunch is up one flight. We will be filing out, going up the stately spiral staircase, pausing to purchase professor schucks book and possibly have him sign it, and then filing in where there will be a light lunch for all of us. Theres an elevator for those of you who have trouble with stairs. When i call on you, please wait for a moment until the helpful person can bring a microphone so the entire group and also the audience on cspan will be able to hear what you ask. When you begin, we appreciate it if you can identify yourself especially if youre with an organization or a university so we know a little bit more about our audience. With that, who would like to ask the first question . Yes, sir. Im Terry Friedman with the public [inaudible] risk forum. And i found this discussion a very complex rendering of, apparently, a complex problem. And it begs of a complex solution, pretty much sort of implies a complex solution. And its kind of like im a country hick, so its kind of like being up to your elbows in pig goo. And youre trying to find a program that will alleviate the consequences of that. When any hick knows that you just avoid pig goo. Would it be more concise for you to say that government fails when it attempts to replace consumers, consumer markets with programmatic proxies . When, in fact, the government is a poor market substitute it either benefits from the program, nor does it bear the consequences of its risks. I would say by and large, yes, thats a very accurate description of one of the major problems and sources of failure of Government Policies. Next. Yes, right there in the back this. James [inaudible] i suppose the last thing often one thinks about is what im going to suggest, a sequel. I thought the book is terrific. I love that its addressing all sorts of endemic problems, systematic problems failure by failure, but the last chapter, rem keys, was only a remedies, was only a single chapter. Im offering to publish it. Ill publish it if a series in a series. Now, youre particularly well suited to do this although you sort of eschew the possibility of doing it. Youre the zimm january e. Baldwin chair, the founder, director of the comparative law bureau. And i can assure you there are lots and lots of comparisons that will tell us, yes, it does work better, and walter will testify that ive done that. So id like to encourage due to do end courage you to do that. Youve got people already at yale that are terrifically knowledgeable in this field. Show us how it can be, how its done better or done differently so we can at least get some good ideas, because there are a lot of good ideas. Well, i certainly appreciate the offer. I will take it under consideration. But i explicitly eschew a great deal of comparative research because i believe that other countries systems are so very, very different in ways that i discuss that its very hard to know whether the program that seems to work there first of all, its very difficult to know whether it works there, the amount of Evaluative Research many this country is in this country is much greater than it is elsewhere even though its piddling. I didnt mention the absence of, i have statistics here, im not sure whether its worth getting into, but just let me give one quote from peter orszag and john [inaudible] two top budget officials in republican and democrat, democratic administrations. Less than one this is an article in the atlantic which i commend to you. Less than one dollar out of every hundred dollars of federal spending is backed by even the most basic evidence that the money is being wisely spent. And in the health care area, less than one out of a thousand dollars goes toward evaluating whether the other 9 t 999 actually works. Clifford winston at the Brookings Institution assessed every published or read and analyzed every published scholar shely study he could scholarly study he could find on programs aimed at a large variety of programs. Theres very little of this. Peter ross has set forth the laws of assessment and evaluation, the iron, stainless steel, brass and zinc, sort of reminds me of the Obamacare Insurance Exchange choices. But i discuss them here. Its very illuminating. Political scientists, were told, publish four times as many articles on distributional issues as they do on government effectiveness. And terry most, famous political scientist at stanford, says bureaucratic effectiveness is given no serious attention. So its and theres less of it in europe than there is here. So im a little dubious about that. But secondly, going back to my original point, our system really so exceptional. American exceptionalism, well, in some respects, others its not. And its important to keep that in mind. Just the difference between a president , a system like ours, a separated system, separated powers like ours and a westminster system like in the u. K. Is vast, and it permeates everything. And so, but if you so if your conclusion would be, well, they have some better programs there than we do and, therefore, we ought to move toward a parliamentary system, i couldnt disagree more. We have not a clue as to whether that would make matters better or worse in the conditions in which we live here. [inaudible conversations] yes, second row. Thank you [inaudible] from ows. I just have a question and a comment. Question is, if you can define a [inaudible] of policies [inaudible] and the command is i would like to invite cato and other communities of research to introduce in the axis a new paradigm because it might help to see more about [inaudible] and its about what i call houses of high politics, how we dont see intervening in daily efforts and impose many things we cannot understand until we investigate this domain. And im open to talk about it finish. [inaudible] with cato and with everybody else about it. Thank you. Thank you. I think youll have to read the book. Ive laid it out there as best i can, so i cant respond more than that. We have time for one more question. I saw yes, john samples. John samples, Cato Institute. I want to follow up or ask both speakers something that arnold sort of suggested; that is, he raised the question of the independence of the evaluative efforts. He doesnt expect that government evaluators sorry, john, could you speak up . Raise your voice. Arnold mentioned he didnt expect that government evaluators would give us an independent evaluation of Government Programs. Well, an interesting thing is when you get the real expansion of the social side of government, domestic spending with a great society, you also, today also set up and funded a think tank to do evaluation which was the urban institute. And subsequently, theres been a lot of contracting to do outside evaluative studies. So i guess my question would be what extent do you see, either one of you, see those outside contractors as capable think tanks, as capable of providing some good feedback on programs in terms of evaluation, and are there other potential ways of going about that with exsearch evaluator exten evaluators that might overcome the problem that arnold certainly points to . Well, thats a great question, and i dont have a clearcut answer. It depends, which is not the answer youre looking for. For example, when i was at, in the department of health, education and welfare, i was, my unit was responsible for disbursting large funds disbursing large funds for policy research on a large scale, in particular the income maintenance experiments that were conducted in five or six different cities, the National Health insurance experiments and a number of others. I think those contractors did a very, very good job, and we supervised them pretty closely. And i think the product was excellent social science as these things go. And much of what we know about the likely effects of antipoverty policies of certain types and of National Health insurance proposals is owing to that research. Mathematica provides some very good policy research, and, you know, lots of other, hot of other outside lots of other outside organizations do so. But, you know, youd have to look at the individual, individual products. This is a problem of bias. The bias could be economic, it could be ideological, it could be professional. I dont see any way around that sort of problem except to try to have competitive assessments going on at the same time and trying to bring these possible biases to the surface. Okay, in my view just to put it into point, theres no ark median point for policy evaluation that doesnt require human beings to make judgments, and those judgments are likely to be affected by the usual costs. My view is it doesnt address the problem. Remember, i had three components of innovation. I had experimentation, learning and evolution. The evaluations by external contractors is a part of the learning process. And i didnt say that theres a, that governments problem is that it cant learn about whether programs are working or not. The problem is the action that takes place as a result of that learning, the evolution. And thats where any organization resists getting rid of things that dont work. Itll do anything to avoid that. And im not saying government is different than the private sector. I mean, you know, ive been in the private sector, and i know that, you know, if youre not, you know, confronted with the discipline of profit and loss in a big way, youre not inclined to undertake evolutionary change yourself. So i think that, yes, you can get useful evaluations both internal and from contractors, but in the end you wont get the evolution. Just a very brief comment. I agree with dr. Kling about that. Very good example, which i discuss in the book, is head start where outside evaluators and the department of health and Human Services has actually done very costly and extensive assessments of the program over a course of many decades, and they have pretty uniformly theres some dissent, but theyve pretty uniformly showed that the positive effects of head start erode by the third grade and sometimes even over the summer. Theres some contrasting claims, and maybe theyre right. Its hard to say. But anyone receiving that report in 2011 when i think it was conducted would have said, well, gee, we really maybe we should cut back head starlet, try something else. Alternatives to head start. And thats not whats done. c now, they have made some head start has made some minor changes. I believe theyre going to require competitive applications from the lowest ranking programs. Thats good. I suppose. Depending on how its implemented. But its a very good example of dr. Klings point that the use thats made of the evaluation is often to dismiss it, discard it or misrepresent it. These proceedings will be shown on cspan probably the this weekend. They will also turn up within a few days at cato. Org events where youll find many other good videos to watch too. We will be heading upstairs, and those of you wondering about bathroom facilities on the second floor, youll pass a yell row wall. Thats where youll yellow wall. Thats where youll find those. Please join me in thanking arnold kling and peter schuck. [applause] [inaudible conversations] cspan2, providing live coverage of the u. S. Senate floor proceedings and key Public Policy events. And every weekend, booktv. Now for 15 years the only Television Network devoted to nonfiction books and authors. Cspan2, created by the cable tv industry and brought to you as a Public Service by your local cable or satellite provider. Watch us in hd, like us on facebook and follow us on twitter. And now from booktvs coverage of the 2014 virginia festival of the book, laura guess diner. She gottesdiener. She talks about her book, a dream foreclosed, in which she looks at the impact of evictions on africanamerican communities around the country. If its okay with everyone, id like to just start bys ok telling the story that opens this book. And its short. Its not like when people get up and just read their book. Or but id like to start with ithe because i hope that it will really remind us what were talking about here. T and so, and its important to say this is a true story. Its a story that was told to me when i was in chicago two summers ago by a young girl at the