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BBR Partners 2010 Client Symposium Excerpts of Keynote Address – David Gergen

I have been involved with 10 presidential elections: first, in the trenches working with Kennedy, and more recently, kibitzing from the sidelines in TV studios, but 10 elections does rather date you. It does make you sense your age. I've therefore become more and more sympathetic with an old fellow who was walking through the woods one day and heard a sound. He couldn't see anything, but then he heard it again and looked down, and there was a frog by the side of the path. The frog looked up at him and said, “If you kiss me, I will turn into a beautiful princess.” He reached down, scooped up the frog, and put it in his pocket: no kiss. The frog was really surprised, crawled up his jacket, and said, “Didn't you hear me? I said, if you kiss me, I will turn into a beautiful princess.” “Yeah, I heard you all right, but at my age, I'd rather have a talking frog.” I've reached that stage in politics, the talking frog stage. I've been around this a long time. I've watched people rise and I've watched people fall, but I must tell you that, as a general proposition, I don't think I can remember a time when America faced more difficult problems and seemed to be less equipped, less capable of meeting those problems head on. People are asking if capitalism is working, and I think that's a very appropriate question, especially after the roller coaster we've been on recently. There are many of us who increasingly feel that our political system is broken, that our political system is not responding very well to the issues at hand, the large issues of our time. I am among those who believe that things over the next couple of years are likely to go very well. The larger issue is where we are going to be as a country over the next two or three decades. As citizens and as leaders of this country, we all have to be concerned about what kind of nation we're ultimately going to turn over to our children and grandchildren. I don't think we know the answer to that question yet. We need to ask ourselves: is democracy working? Is it working for America? I have a colleague and friend at Harvard named Niall Ferguson, a world class historian. He teaches the entry level course for freshman and sophomores entitled “The Rise of the West.” It is a fairly standard history course that has been around for a long time. I'm sure it goes back to Charlemagne and traces the rise of Europe and of North America. We had dinner the other night and got into a conversation with a few others about what he might call that course if he were teaching it 30 years from now. Would he still call it “The Rise of the West?” Might he instead call it, to borrow from Fareed Zakaria, a good Yale graduate, “The Rise of the Rest?” That may very well be an appropriate name because in 30 years, I think that, whatever happens in the next year or two, China will be at the table of power, as will India and Japan. That's going to happen whether we like it or not. I hope that we welcome it and that we try to work peacefully through that transition because when a nation like China is rising, there is often a temptation for other nations to get into disputes. That is what we've seen in the past. It may well be called “The Rise of the Rest,” but there was still a third possibility that Niall Ferguson raised, and that was that the course in 30 years might well be called, “The Rise and Fall of the West.” That, it seems to me, is the most pertinent


We are at what Andy Grove. We did a lot of other things in those early months that showed we had resolve and we were not simply going to limp back into a defensive crouch.BBR Partners 2010 Client Symposium Excerpts of Keynote Address – David Gergen issue before us as a people. for almost 40 years. or more discouraged. We responded effectively in Afghanistan. that by the time our grandchildren reach their peak earning years. I must say. It doesn't have to be here in the United States. have been great steps forward. co-founder of Intel. called his memoir: A Strategic Inflection Point. but if we go into a situation where there are deeper cuts in income. come together and do pretty well in responding. this was a very united country. but the surrounding environment can change significantly. I have been working in the political arena. struggle about our priorities. Andy is very worried about the future of the United States. over time. this was the appropriate place where we would sort out issues. That is the world most of us grew up I grew up believing . 2 .that the major issues of our time need to be resolved in a political arena? Conventionally. where we have traditionally believed . Can we deal with these issues in the public sector in our politics. That is a significant drop. as controversial as they were to many in the South . There has been a lot of legislation that. immediately and the months thereafter. For corporations. But if one changes the business plan and is smart about it. We already have enough of that. we rally. Even in modern times. After all. the average standard of living in this country is going to be down in real terms by 25%%. If one stays with that business plan. one can make money in a lot of different ways. He has argued to me that unless we change our ways. if you look at 9/11.nonetheless changed dramatically how we dealt with race in this country. given the way the world works now. especially in our politics. I don't think I can remember a time when I've been less encouraged. those tensions will grow enormously. If there is a great national emergency. There is a distinction to be made: I think we can be very good at dealing with native part of the country . and presumably it will be fairly hard to get good jobs. not as investors. That's why it is an inflection point. We put our shoulders together. I am a product of the 1960s in part. Go back to Pearl Harbor in World War II and how we rallied and contributed to the arsenal of democracy. one can have a terrifically successful business plan that will work very well over a period of time. about the prospects of our political system facing up to and dealing with problems. and I can say that the Civil Rights laws of 1964 and 1965. there is a chance to go up. if we just stick with business as usual. he teaches at Stanford and has a small graduate seminar. and they were great steps forward. He has been doing a lot of work on the question of American decline and how real that threat is. off and on. I've always believed that our politics are where we sort out these kinds of things and make serious decisions and commitments. He is retired now from Intel. make public commitments to certain kinds of solutions. the company will go down. and it could put the cohesion of the country to great tests. and determine whether we would move forward or backward.

but are not prepared for college. I was in the White House in the early 1970s when OPEC got its act together. That is not the sign of a nation that has responded well to its problems of education. There were a number of people on both sides of the aisle who became significant reformers. It was an alarming report. Several governors got into the act. in two administrations. President Reagan got this report. Larry Summers and Barack Obama. 11 % of the budget in California is spent on education. and 12 % is spent on prisons. he has certainly handled it brilliantly since. Today. 17 % of its state budget was spent on education. 27 years later. Fifty % of the dropouts are occurring in 15 % of the schools. as well as Dick Riley in South Carolina and Tommy Thompson in Wisconsin. That was our rallying battle cry. and we had long gas lines. and I think that includes George W. Bill Clinton became a significant reform governor in Arkansas. and I wrote for him and then President Ford several of those early speeches declaring that America would become energy independent. In California in the 1980s. Whatever you want to say about Ben Bernanke heading into the great recession. they're not prepared for 21st century jobs.BBR Partners 2010 Client Symposium Excerpts of Keynote Address – David Gergen Similarly so when we got hit with this recession. He was a scholar of the Great Depression and the economics used in that period. I think that our political leaders. Now we are about 60 % dependent. So. rose up and tried to strangle us economically. and the schools are modestly better by the overall averages. One-third do finish. and if a foreign country did to us what we were doing to ourselves in our schools. One-third of students don't finish high school. got very charged up. I was in the White House in the early 1980s when President Reagan received a report from a National Commission on the state of kindergarten through12th grade public schools in the country. Tim Geithner. and of course Ben Bernanke. and if you look at the dropout rates from public schools. and those kids are simply not prepared. in those two incidences. I think there is pretty clear evidence that we respond well to a crisisWhere we have much more trouble is responding to chronic issues. Those were darn effective speeches and at the time we were about 30%% dependent on foreign oil. Larry Summers and his other economic advisers told him during the transition that there was a one in three chance that we were going to have another Great Depression. I was working for President Nixon then. we would declare war on them. deserve more credit than they've gotten for preventing that from happening. and three % was spent on prisons. 3 . and it made a difference. The scores are up modestly. Here we are. When Barack Obama was first elected. they are higher today than they were then. A third of our kids don't finish. concentrated especially in urban areas. but our competitors are up a lot in that same time frame. and he demonstrates how important it is to understand history. I think it includes Tim Geithner. Bush and Hank Paulson. saying our schools were in serious decline. and went around the country for the next few months trying to rally people to reform education. that there was a rising tide of mediocrity that was sweeping across American public education.

Arthur Okun. Instead. he did very well. I was there when the Clintons tried and failed. I worked for one president after another who talked about reforming that and Medicare. 4 . we went to war in Iraq. When he was campaigning. there were going to be a lot of people retiring. an economist at Brookings. As he campaigned around the country. he had 53 % of the national vote. that was the highest %age of any democrat running for the presidency since Lyndon Johnson won by a landslide in 1964. argued some years ago. We have known that. We hadn't addressed the underlying problem. and he had swollen Democratic majorities in both the House and Senate. He said he would not only rescue the economy through government action. that the foundations are weakening. The surpluses are now gone. a warmth. one decade into this century. but it was a shortterm fix. We haven't yet fixed the problem. We're just not very good when we have termites in the basement. Pete Peterson and David Walker have been trying to sound the alarm about the deficits. a sense of community. I think many of us felt that the paralysis and the partisanship in Washington might magically disappear with the election of Barack Obama. it's obvious that we're now seeing a gigantic backlash in the country after Americans began to see how much it was actually going to cost. That may not sound like a lot. he made it very clear that he intended to have an activist government and intended to step in. and for reforming the public schools. However. and we've allowed them to weaken far more than we should. but when comparing historically. Six other presidents have tried and failed. We did all of these other things without paying for it. There was this quality about Obama that was inspiring. this is the most expensive Congress in history by some measure. which was a major accomplishment by historic standards. Those surpluses could have been used to reform both programs. so we needed to reform Social Security. He was able to pass the healthcare bill.” I think that is the sense that most of us have. which was a major step forward. and it was going to cost us a lot of money. and he has set out doing this.BBR Partners 2010 Client Symposium Excerpts of Keynote Address – David Gergen Also consider the baby boomer population. With all of the trillions upon trillions of dollars that were sloshing through Congress. When the votes were counted. who headed up the commission. but that he intended to use government as a primary weapon for solving the healthcare problem. but these are all very deep-seeded problems that we've had a hard time dealing with in the past. and here we are now with baby boomers starting to retire. and we let a golden moment slip past us when we had budget surpluses after Bill Clinton left office. We got into prescription drugs. At the time it seemed reasonable for Obama to interpret that as a clear message to go out and bring these kinds of changes. for dealing with energy and climate change. He accomplished universal coverage. and it will be much tougher now to reform these programs. we wasted the surpluses. I was there when Nixon tried and failed. Reagan actually did something about Social Security with Alan Greenspan. “America is terrific in responding when we have a wolf at the door. and a positive feeling about where the country was heading that I had not seen in a long time.

a lot of this partisan poison is going to pass from the system and will make it a healthier system. I think we need to be in a global economy. and this is a rough count. I do think that there is some reason to be concerned when looking at the numbers. and frankly it's more than we're willing to pay for. which means low barriers on trade. I hope by the time our kids reach this stage. in two years this Congress will have approved at least $9 trillion of additional expenditures. It is far more than they wanted. and then spend the next two years working more on foreign policy. Reform needs to happen in the private and civic sectors. and it's extremely important to be effective. and it's far more government than people expected. is rising dangerously and rapidly. It won't matter so much what the makeup of the House or Senate will be. without making that reform dependent upon Washington. We need to keep working at it. and I think in the next two years. They spend the first two years domestically-focused. I believe both in free trade and in government supporting those who get hurt by free trade. I have seen some encouraging developments outside of the government. It will be a much more divided government. We are trying to do too much with too few resources. The national public debt. but there are going to be people hurt in that situation. We have reached a divisive point. There are going to be industries that suffer. “Free markets and free people” is a good slogan and approach to life. I 5 . but likely a fair amount of his time is going to be spent on foreign policy. That's where he will continue to have clout. and we will pay a price for this. I believe in the government stepping in and regulating or refereeing to a reasonable degree. as a percentage of the GDP. but our current government has gone beyond even where I had anticipated we would be and beyond what I think we can truly do as a people. I think the big changes are going to now slow down. but how do we solve these underlying problems in the meantime? I am someone who has spent most of his adult life trying to help get problems solved through the public side and who deeply believes in the American presidency. they get a new lift and go back to their domestic agenda for a couple more years. which the government helps to subsidize. and the day is going to come when our politics will get healthier. It has now given rise to a conservative movement that seemed to be down on its back after two devastating defeats. but there is action and intellectual effort being made specifically on energy in the private sector that is encouraging. we need to be trying to solve these problems without waiting on the politicians. the most important office in the world. but in the meantime. If they are able to win re-election. but I have gradually and reluctantly reached the conclusion that we can no longer afford to be reliant upon our political leader to solve these problems. I think the presidency is an extraordinarily important office. That is what presidents often do. as he is Commander in Chief of the most powerful nation on earth. the President will try to get some modest things done on the domestic front. lose seats in the midterm elections.BBR Partners 2010 Client Symposium Excerpts of Keynote Address – David Gergen By my latest count. and the government should give some protection to individuals in those industries. That is a lot of money to be spent.

This wasn't possible a few years ago. as those who complete the program receive only a $4.000 applications to fill 4. making natural gas more accessible. However. getting paid entry-level wages. a professor at Yale. which has always been a critical problem. This could. those born between 1980 and 2000. but we do not need to wait for a resolution in Washington for progress to occur. The real progress and promise for education reform is coming from the grassroots. When there is that kind of focus on energy. They are very idealistic and care about social change. Teach for America received 47. from our kids. Wendy Kopp. The government should indeed be involved. in fact.500 scholarship fund at the end. Education. but the dropout rate continues to increase. she wrote an essay calling for an organization called Teach for America. new pathways and new possibilities begin to develop. Teach for America asks college graduates to spend two years teaching in the toughest urban schools in the country on a volunteer basis. They don't particularly want to work for the government. We have made modest progress. produce an endless cycle of clean power. where now 20 % of their faculty is working on energy. dean of the graduate studies. Dan Yergin runs the largest energy conference in the country in Houston each year. She was made head of the graduate school.BBR Partners 2010 Client Symposium Excerpts of Keynote Address – David Gergen believe there are breakthroughs on the horizon that will get us to a cleaner future where we will be less reliant on Middle East oil. Natural gas is a cleaner fuel than coal or oil. The younger generation. as well as government research. The epitome of this attitude is one of my heroes in life. and we have tried several top-down solutions. is called the Millenials. Most universities around the country today are filled with Millenials. Another great example of the private sector making progress in energy is Bill Gates. There are several possible breakthroughs occurring there. but these technological breakthroughs now mean that there is an abundance of natural gas. When she couldn't find a job after graduating in 1989. There is very little monetary incentive to participate. then provost. During her time at Princeton. They are one of the best generations we've ever had. There was a lot of excitement there about the strides being made in natural gas. The same is happening in the private sector with several new technologies. and we have a reasonably good supply of it.000 new spots for TFA core members 6 . I attended this year with about 3. is an area where the private sector is making tremendous strides toward changes. and she has gone on to MIT. and MIT has been able to increase the number of companies that are coming out of that University. So many of us have been frustrated by our public schools for so long. and it could be the bridge to renewable energy. she raised money and started this organization herself. and produce more power.000 people. He now is throwing himself into the development of clean nuclear power because he believes we are on the verge of technologies that reburn the waste from nuclear power plants. additionally. I had a chance to get to know a woman named Susan Hockfield. New technologies have been developed as a result of investments from private companies. but want to do this as social entrepreneurs in the non-profit sector.

They are changing the way this nation is thinking about and handling students and the entire school system. When the earthquake hit in Haiti. There is another group similar to the Millennial generation and has a comparable sense of promise about them. Some may believe that these young people only want to work for TFA their first two years. where one would be protected the rest of his or her life. they focused on six veterans. we can fix the rest. She is getting a lot of resistance. I could go through story after story about that. Even as our political system is paralyzed. or even starting charter schools. and went to finish school at Harvard Business School.C. In Washington. after having put their lives on the line. to think positively about what we can still do for this country and not become cynical or pessimistic. was started by Teach For America alums. The Kipp School. It is a very progressive contract based on teacher performance instead of straight tenure. D. and of the African American students in the senior class. they want to change it. a city with one of the toughest school systems. 40 % applied. Fortune Magazine just ran a cover five or six weeks ago about the new faces and rising stars of corporate America. punch their ticket. The young woman they put on the cover happened to be a former student of mine and my teaching assistant. Not true.BBR Partners 2010 Client Symposium Excerpts of Keynote Address – David Gergen this coming September. but she just signed the best contract of any major superintendent with any major public school union in the country. I find an awful lot of promise in this younger generation. Students want to go back into their neighborhoods and improve their communities. Out of Harvard’s current graduating class. then go to business school and move to Wall Street. it may be possible to find other answers and workarounds. just came back. the best charter school program in the country.. and are very committed to social change. I had four veterans who immediately took the next plane to work in a hospital down there. She is now working for Indra Nooyi at PepsiCo in their leadership program and is totally dedicated to social change. She was in Iraq. 60 % of the TFA alumni stay involved in public education reform. a woman named Michelle Rhee is trying to create change. 7 . 18 % applied for Teach for America. staying on to teach in public schools. They don't want to walk away from it. A large portion of them are now running for public office. If politics are not fixing all of our problems. running for school boards. Young veterans are coming back from Iraq and Afghanistan. I am privileged to teach a number of these veterans.