Statecraft

Today we're joined by Dr. Rob Johnston. He's an anthropologist, an intelligence community veteran, and author of the cult classic Analytic Culture in the US Intelligence Community, a book so influential that it's required reading at DARPA. But first and foremost, Johnston is an ethnographer. His focus in that book is on how analysts actually produce intelligence analysis.Johnston answers a lot of questions I've had for a while about intelligence and spying, such as:* Why do we seem to get big predictions wrong so consistently?* Why can't the CIA find analysts who speak the language of the country they're analyzing?* Why do we prioritize expensive satellites over human intelligence?We also discuss a meta-question I always come back to on Statecraft: is being good at this stuff an art or a science? By “this stuff,” I'm referring to intelligence analysis, but I think that the question generalizes across policymaking. Would more formalizing and systematizing make our spies, diplomats, and EPA bureaucrats better? Or would it lead to more bureaucracy, more paper, and worse outcomes? How do you build processes in the government that actually make you better at your job?You can find the full transcript for this conversation at www.statecraft.pub. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

We've covered the US Agency for International Development, or USAID, pretty consistently on Statecraft, since our first interview on PEPFAR, the flagship anti-AIDS program, in 2023. When DOGE came to USAID, I was extremely critical of the cuts to lifesaving aid, and the abrupt, pointlessly harmful ways in which they were enacted. In March, I wrote, “The DOGE team has axed the most effective and efficient programs at USAID, and forced out the chief economist, who was brought in to oversee a more aggressive push toward efficiency.”Today, we're talking to that forced-out chief economist, Dean Karlan. Dean spent two and a half years at the helm of the first-ever Office of the Chief Economist at USAID. In that role, he tried to help USAID get better value from its foreign aid spending. His office shifted $1.7 billion of spending towards programs with stronger evidence of effectiveness. He explains how he achieved this, building a start-up within a massive bureaucracy. I should note that Dean is one of the titans of development economics, leading some of the most important initiatives in the field (I won't list them, but see here for details), and I think there's a plausible case he deserves a Nobel.Throughout this conversation, Dean makes a point much better than I could: the status quo at USAID needed a lot of improvement. The same political mechanisms that get foreign aid funded by Congress also created major vulnerabilities for foreign aid, vulnerabilities that DOGE seized on. Dean believes foreign aid is hugely valuable, a good thing for us to spend our time, money, and resources on. But there's a lot USAID could do differently to make its marginal dollar spent more efficient.DOGE could have made USAID much more accountable and efficient by listening to people like Dean, and reformers of foreign aid should think carefully about Dean's criticisms of USAID, and his points for how to make foreign aid not just resilient but politically popular in the long term.We discuss* What does the Chief Economist do?* Why does 170% percent of USAID funds come already earmarked by Congress?* Why is evaluating program effectiveness institutionally difficult?* Why don't we just do cash transfers for everything?* Why institutions like USAID have trouble prioritizing* Should USAID get rid of gender/environment/fairness in procurement rules?* Did it rely too much on a small group of contractors?* What's changed in development economics over the last 20 years?* Should USAID spend more on governance and less on other forms of aid? * How DOGE killed USAID — and how to bring it back better* Is depoliticizing foreign aid even possible?* Did USAID build “soft power” for the United States?This is a long conversation: you can jump to a specific section with the index above. If you just want to hear about Dean's experience with DOGE, you can click here or go to the 45-minute mark in the audio. And if you want my abbreviated summary of the conversation, see these two Twitter threads. But I think the full conversation is enlightening, especially if you want to understand the American foreign aid system. Thanks to Harry Fletcher-Wood for his judicious edits.Our past coverage of USAIDDean, I'm curious about the limits of your authority. What can the Chief Economist of USAID do? What can they make people do?There had never been an Office of the Chief Economist before. In a sense, I was running a startup, within a 13,000-employee agency that had fairly baked-in, decentralized processes for doing things.Congress would say, "This is how much to spend on this sector and these countries." What you actually fund was decided by missions in the individual countries. It was exciting to have that purview across the world and across many areas, not just economic development, but also education, social protection, agriculture. But the reality is, we were running a consulting unit within USAID, trying to advise others on how to use evidence more effectively in order to maximize impact for every dollar spent.We were able to make some institutional changes, focused on basically a two-pronged strategy. One, what are the institutional enablers — the rules and the processes for how things get done — that are changeable? And two, let's get our hands dirty working with the budget holders who say, "I would love to use the evidence that's out there, please help guide us to be more effective with what we're doing."There were a lot of willing and eager people within USAID. We did not lack support to make that happen. We never would've achieved anything, had there not been an eager workforce who heard our mission and knocked on our door to say, "Please come help us do that."What do you mean when you say USAID has decentralized processes for doing things?Earmarks and directives come down from Congress. [Some are] about sector: $1 billion dollars to spend on primary school education to improve children's learning outcomes, for instance. The President's Emergency Plan for AIDS Relief (PEPFAR) [See our interview with former PEPFAR lead Mark Dybul] is one of the biggest earmarks to spend money specifically on specific diseases. Then there's directives that come down about how to allocate across countries.Those are two conversations I have very little engagement on, because some of that comes from Congress. It's a very complicated, intertwined set of constraints that are then adhered to and allocated to the different countries. Then what ends up happening is — this is the decentralized part — you might be a Foreign Service Officer (FSO) working in a country, your focus is education, and you're given a budget for that year from the earmark for education and told, "Go spend $80 million on a new award in education." You're working to figure out, “How should we spend that?” There might be some technical support from headquarters, but ultimately, you're responsible for making those decisions. Part of our role was to help guide those FSOs towards programs that had more evidence of effectiveness.Could you talk more about these earmarks? There's a popular perception that USAID decides what it wants to fund. But these big categories of humanitarian aid, or health, or governance, are all decided in Congress. Often it's specific congressmen or congresswomen who really want particular pet projects to be funded.That's right. And the number that I heard is that something in the ballpark of 150-170% of USAID funds were earmarked. That might sound horrible, but it's not.How is that possible?Congress double-dips, in a sense: we have two different demands. You must spend money on these two things. If the same dollar can satisfy both, that was completely legitimate. There was no hiding of that fact. It's all public record, and it all comes from congressional acts that create these earmarks. There's nothing hidden underneath the hood.Will you give me examples of double earmarking in practice? What kinds of goals could you satisfy with the same dollar?There's an earmark for Development Innovation Ventures (DIV) to do research, and an earmark for education. If DIV is going to fund an evaluation of something in the education space, there's a possibility that that can satisfy a dual earmark requirement. That's the kind of thing that would happen. One is an earmark for a process: “Do really careful, rigorous evaluations of interventions, so that we learn more about what works and what doesn't." And another is, "Here's money that has to be spent on education." That would be an example of a double dip on an earmark.And within those categories, the job of Chief Economist was to help USAID optimize the funding? If you're spending $2 billion on education, “Let's be as effective with that money as possible.”That's exactly right. We had two teams, Evidence Use and Evidence Generation. It was exactly what it sounds like. If there was an earmark for $1 billion dollars on education, the Evidence Use team worked to do systematic analysis: “What is the best evidence out there for what works for education for primary school learning outcomes?” Then, “How can we map that evidence to the kinds of things that USAID funds? What are the kinds of questions that need to be figured out?”It's not a cookie-cutter answer. A systematic review doesn't say, "Here's the intervention. Now just roll it out everywhere." We had to work with the missions — with people who know the local area — to understand, “What is the local context? How do you appropriately adapt this program in a procurement and contextualize it to that country, so that you can hire people to use that evidence?”Our Evidence Generation team was trying to identify knowledge gaps where the agency could lead in producing more knowledge about what works and what doesn't. If there was something innovative that USAID was funding, we were huge advocates of, "Great, let's contribute to the global public good of knowledge, so that we can learn more in the future about what to do, and so others can learn from us. So let's do good, careful evaluations."Being able to demonstrate what good came of an intervention also serves the purpose of accountability. But I've never been a fan of doing really rigorous evaluations just for the sake of accountability. It could discourage innovation and risk-taking, because if you fail, you'd be seen as a failure, rather than as a win for learning that an idea people thought was reasonable didn't turn out to work. It also probably leads to overspending on research, rather than doing programs. If you're doing something just for accountability purposes, you're better off with audits. "Did you actually deliver the program that you said you would deliver, or not?"Awards over $100 million dollars did go through the front office of USAID for approval. We added a process — it was actually a revamped old process — where they stopped off in my office. We were able to provide guidance on the cost-effectiveness of proposals that would then be factored into the decision on whether to proceed. When I was first trying to understand Project 2025, because we saw that as a blueprint for what changes to expect, one of the changes they proposed was actually that process. I remember thinking to myself, "We just did that. Hopefully this change that they had in mind when they wrote that was what we actually put in place." But I thought of it as a healthy process that had an impact, not just on that one award, but also in helping set an example for smaller awards of, “This is how to be more evidence-based in what you're doing.”[Further reading: Here's a position paper Karlan's office at USAID put out in 2024 on how USAID should evaluate cost-effectiveness.]You've also argued that USAID should take into account more research that has already been done on global development and humanitarian aid. Your ideal wouldn't be for USAID to do really rigorous research on every single thing it does. You can get a lot better just by incorporating things that other people have learned.That's absolutely right. I can say this as a researcher: to no one's surprise, it's more bureaucratic to work with the government as a research funder than it is to work with foundations and nimble NGOs. If I want to evaluate a particular program, and you give me a choice of who the funder should be, the only reason I would choose government is if it had a faster on-ramp to policy by being inside.The people who are setting policy should not be putting more weight on evidence that they paid for. In fact, one of the slogans that I often used at USAID is, "Evidence doesn't care who pays for it." We shouldn't be, as an agency, putting more weight on the things that we evaluated vs. things that others evaluated without us, and that we can learn from, mimic, replicate, and scale.We — and the we here is everyone, researchers and policymakers — put too much weight on individual studies, in a horrible way. The first to publish on something gets more accolades than the second, third and fourth. That's not healthy when it comes to policy. If we put too much weight on our own evidence, we end up putting too much weight on individual studies we happen to do. That's not healthy either.That was one of the big pieces of culture change that we tried to push internally at USAID. We had this one slide that we used repeatedly that showed the plethora of evidence out there in the world compared to 20 years ago. A lot more studies are now usable. You can aggregate that evidence and form much better policies.You had political support to innovate that not everybody going into government has. On the other hand, USAID is a big, bureaucratic entity. There are all kinds of cross-pressures against being super-effective per dollar spent. In doing culture change, what kinds of roadblocks did you run into internally?We had a lot of support and political cover, in the sense that the political appointees — I was not a political appointee — were huge fans. But political appointees under Republicans have also been huge fans of what we were doing. Disagreements are more about what to do and what causes to choose. But the basic idea of being effective with your dollars to push your policy agenda is something that cuts across both sides.In the days leading up to the inauguration, we were expecting to continue the work we were doing. Being more cost-effective was something some of the people who were coming in were huge advocates for. They did make progress under Trump I in pushing USAID in that direction. We saw ourselves as able to help further that goal. Obviously, that's not the way it played out, but there isn't really anything political about being more cost-effective.We'll come back to that, but I do want to talk about the 2.5 years you spent in the Biden administration. USAID is full of people with all kinds of incentives, including some folks who were fully on board and supportive. What kinds of challenges did you have in trying to change the culture to be more focused on evidence and effectiveness?There was a fairly large contingent of people who welcomed us, were eager, understood the space that we were coming from and the things that we wanted, and greeted us with open arms. There's no way we would've accomplished what we accomplished without that. We had a bean counter within the Office of the Chief Economist of moving about $1.7 billion towards programs that were more effective or had strong evaluations. That would've been $0 had there not been some individuals who were already eager and just didn't have the path for doing it.People can see economists as people who are going to come in negative and a bit dismal — the dismal science, so to speak. I got into economics for a positive reason. We tried as often as possible to show that with an economic lens, we can help people achieve their goals better, period. We would say repeatedly to people, "We're not here to actually make the difficult choices: to say whether health, education, or food security is the better use of money. We're here to accept your goal and help you achieve more of it for your dollar spent.” We always send a very disarming message: we're there simply to help people achieve their goals and to illuminate the trade-offs that naturally exist.Within USAID, you have a consensus-type organization. When you have 10 people sitting around a room trying to decide how to spend money towards a common goal, if you don't crystallize the trade-offs between the various ideas being put forward, you end up seeing a consensus built: that everybody gets a piece of the pie. Our way of trying to shift the culture is to take those moments and say, "Wait a second. All 10 might be good ideas relative to doing nothing, but they can't all be good relative to each other. We all share a common goal, so let's be clear about the trade-offs between these different programs. Let's identify the ones that are actually getting you the most bang for your buck."Can you give me an example of what those trade-offs might be in a given sector?Sure. Let's take social protection, what we would call the Humanitarian Nexus development space. It might be working in a refugee area — not dealing with the immediate crisis, but one, two, five, or ten years later — trying to help bring the refugees into a more stable environment and into economic activities. Sometimes, you would see some cash or food provided to households. The programs would all have the common goal of helping to build a sustainable livelihood for households, so that they can be more integrated into the local economy. There might be programs providing water, financial instruments like savings vehicles, and supporting vocational education. It'd be a myriad of things, all on this focused goal of income-generating activity for the households to make them more stable in the long run.Often, those kinds of programs doing 10 different things did not actually lead to an observable impact over five years. But a more focused approach has gone through evaluations: cash transfers. That's a good example where “reducing” doesn't always mean reduce your programs just to one thing, but there is this default option of starting with a base case: “What does a cash transfer generate?"And to clarify for people who don't follow development economics, the cash transfer is just, “What if we gave people money?”Sometimes it is just that. Sometimes it's thinking strategically, “Maybe we should do it as a lump sum so that it goes into investments. Maybe we should do it with a planning exercise to make those investments.” Let's just call it “cash-plus,” or “cash-with-a-little-plus,” then variations of that nature. There's a different model, maybe call it, “cash-plus-plus,” called the graduation model. That has gone through about 30 randomized trials, showing pretty striking impacts on long-run income-generating activity for households. At its core is a cash transfer, usually along with some training about income-generating activity — ideally one that is producing and exporting in some way, even a local export to the capital — and access to some form of savings. In some cases, that's an informal savings group, with a community that comes and saves together. In some cases, it's mobile money that's the core. It's a much simpler program, and it's easier to do it at scale. It has generated considerable, measured, repeatedly positive impacts, but not always. There's a lot more that needs to be learned about how to do it more effectively.[Further reading: Here's another position paper from Karlan's team at USAID on benchmarking against cash transfers.]One of your recurring refrains is, “If we're not sure that these other ideas have an impact, let's benchmark: would a cash-transfer model likely give us more bang for our buck than this panoply of other programs that we're trying to run?”The idea of having a benchmark is a great approach in general. You should always be able to beat X. X might be different in different contexts. In a lot of cases, cash is the right benchmark.Go back to education. What's your benchmark for improving learning outcomes for a primary school? Cash transfer is not the right benchmark. The evidence that cash transfers will single-handedly move the needle on learning outcomes is not that strong. On the other hand, a couple of different programs — one called Teaching at the Right Level, another called structured pedagogy — have proven repeatedly to generate very strong impacts at a fairly modest cost. In education, those should be the benchmark. If you want to innovate, great, innovate. But your goal is to beat those. If you can beat them consistently, you become the benchmark. That's a great process for the long run. It's very much part of our thinking about what the future of foreign aid should look like: to be structured around that benchmark.Let's go back to those roundtables you described, where you're trying to figure out what the intervention should be for a group of refugees in a foreign country. What were the responses when you'd say, “Look, if we're all pulling in the same direction, we have to toss out the three worst ideas”?One of the challenges is the psychology of ethics. There's probably a word for this, but one of the objections we would often get was about the scale of a program for an individual. Someone would argue, "But this won't work unless you do this one extra thing." That extra thing might be providing water to the household, along with a cash transfer for income-generating activity, financial support, and bank accounts. Another objection would be that, "You also have to provide consumption and food up to a certain level."These are things that individually might be good, relative to nothing, or maybe even relative to other water approaches or cash transfers. But if you're focused on whether to satisfy the household's food needs, or provide half of what's needed — if all you're thinking about is the trade-off between full and half — you immediately jump to this idea that, "No, we have to go full. That's what's needed to help this household." But if you go to half, you can help more people. There's an actual trade-off: 10,000 people will receive nothing because you're giving more to the people in your program.The same is true for nutritional supplements. Should you provide 2,000 calories a day, or 1,000 calories a day to more people? It's a very difficult conversation on the psychology of ethics. There's this idea that people in a program are sacrosanct, and you must do everything you can for them. But that ignores all the people who are not being reached at all.I would find myself in conversations where that's exactly the way I would try to put it. I would say, "Okay, wait, we have the 2,000,000 people that are eligible for this program in this context. Our program is only going to reach 250,000. That's the reality. Now, let's talk about how many people we're willing to leave untouched and unhelped whatsoever." That was, at least to me, the right way to frame this question. Do you go very intense for fewer people or broader support for more people?Did that help these roundtables reach consensus, or at least have a better sense of what things are trading off against each other?I definitely saw movement for some. I wouldn't say it was uniform, and these are difficult conversations. But there was a lot of appetite for this recognition that, as big as USAID was, it was still small, relative to the problems being approached. There were a lot of people in any given crisis who were being left unhelped. The minute you're able to help people focus more on those big numbers, as daunting as they are, I would see more openness to looking at the evidence to figure out how to do the most good with the resources we have?” We must recognize these inherent trade-offs, whether we like it or not.Back in 2023, you talked to Dylan Matthews at Vox — it's a great interview — about how it's hard to push people to measure cost-effectiveness, when it means adding another step to a big, complicated bureaucratic process of getting aid out the door. You said,"There are also bandwidth issues. There's a lot of competing demands. Some of these demands relate to important issues on gender environment, fairness in the procurement process. These add steps to the process that need to be adhered to. What you end up with is a lot of overworked people. And then you're saying, ‘Here's one more thing to do.'”Looking back, what do you think of those demands on, say, fairness in the procurement process?Given that we're going to be facing a new environment, there probably are some steps in the process that — hopefully, when things are put back in place in some form — someone can be thinking more carefully about. It's easier to put in a cleaner process that avoids some of these hiccups when you start with a blank slate.Having said that, it's also going to be fewer people to dole out less money. There's definitely a challenge that we're going to be facing as a country, to push out money in an effective way with many fewer people for oversight. I don't think it would be accurate to say we achieved this goal yet, but my goal was to make it so that adding cost-effectiveness was actually a negative-cost addition to the process. [We wanted] to do it in a way that successfully recognized that it wasn't a cookie-cutter solution from up top for every country. But [our goal was that] the work to contextualize in a country actually simplified the process for whoever's putting together the procurement docs and deciding what to put in them. I stand by that belief that if it's done well, we can make this a negative-cost process change.I just want to push a little bit. Would you be supportive of a USAID procurement and contracting process that stripped out a bunch of these requirements about gender, environment, or fairness in contracting? Would that make USAID a more effective institution?Some of those types of things did serve an important purpose for some areas and not others. The tricky thing is, how do you set up a process to decide when to do it, when not? There's definitely cases where you would see an environmental review of something that really had absolutely nothing to do with the environment. It was just a cog in the process, but you have to have a process for deciding the process. I don't know enough about the legislation that was put in place on each of these to say, “Was there a better way of deciding when to do them, when not to do them?” That is not something that I was involved in in a direct way. "Let's think about redoing how we introduce gender in our procurement process" was never put on the table.On gender, there's a fair amount of evidence in different contexts that says the way of dealing with a gender inequity is not to just take the same old program and say, "We're now going to do this for women." You need to understand something more about the local context. If all you do is take programs and say, "Add a gender component," you end up with a lot of false attribution, and you don't end up being effective at the very thing that the person [leading the program] cares to do.In that Vox interview, your host says, "USAID relies heavily on a small number of well-connected contractors to deliver most aid, while other groups are often deterred from even applying by the process's complexity." He goes on to say that the use of rigorous evaluation methods like randomized controlled trials is the exception, not the norm.On Statecraft, we talked to Kyle Newkirk, who ran USAID procurement in Afghanistan in the late 2000s, about the small set of well-connected contractors that took most of the contracts in Afghanistan. Often, there was very little oversight from USAID, either because it was hard to get out to those locations in a war-torn environment, or because the system of accountability wasn't built there. Did you talk to people about lessons learned from USAID operating in Afghanistan?No. I mean, only to the following extent: The lesson learned there, as I understand it, wasn't so much about the choice on what intervention to fund, it was procurement: the local politics and engagement with the governments or lack thereof. And dealing with the challenge of doing work in a context like that, where there's more risk of fraud and issues of that nature.Our emphasis was about the design of programs to say, “What are you actually going to try to fund?” Dealing with whether there's fraud in the execution would fall more under the Inspector General and other units. That's not an area that we engaged in when we would do evaluation.This actually gets to a key difference between impact evaluations and accountability. It's one of the areas where we see a lot of loosey-goosey language in the media reporting and Twitter. My office focused on impact evaluation. What changed in the world because of this intervention, that wouldn't otherwise have changed? By “change in the world,” we are making a causal statement. That's setting up things like randomized controlled trials to find out, “What was the impact of this program?” It does provide some accountability, but it really should be done to look forward, in order to know, “Does this help achieve the goals we have in mind?” If so, let's learn that, and replicate it, scale it, do it again.If you're going to deliver books to schools, medicine to health clinics, or cash to people, and you're concerned about fraud, then you need to audit that process and see, “Did the books get to the schools, the medicine to the people, the cash to the people?” You don't need to ask, "Did the medicine solve the disease?" There's been studies already. There's a reason that medicine was being prescribed. Once it's proven to be an effective drug, you don't run randomized trials for decades to learn what you already know. If it's the prescribed drug, you just prescribe the drug, and do accountability exercises to make sure that the drugs are getting into the right hands and there isn't theft or corruption along the way.I think it's a very intuitive thing. There's a confusion that often takes place in social science, in economic or education interventions. They somehow forget that once we know that a certain program generates a certain positive impact, we no longer need to track continuously to find out what happens. Instead, we just need to do accountability to make sure that the program is being delivered as it was designed, tested, and shown to work.There are all these criticisms — from the waste, fraud, and corruption perspective — of USAID working with a couple of big contractors. USAID works largely through these big development organizations like Chemonics. Would USAID dollars be more effective if it worked through a larger base of contractors?I don't think we know. There's probably a few different operating models that can deliver the same basic intervention. We need to focus on, ”What actually are we doing on the ground? What is it that we want the recipients of the program to receive, hear, or do?” and then think backwards from there: "Who's the right implementer for this?" If there's an implementer who is much more expensive for delivering the same product, let's find someone who's more cost-effective.It's helpful to break cost-effective programming into two things: the intervention itself and what benefits it accrues, and the cost for delivering that. Sometimes the improvement is not about the intervention, it's about the delivery model. Maybe that's what you're saying: “These players were too few, too large, and they had a grab on the market, so that they were able to charge too much money to deliver something that others were equally able to do at lower cost." If that's the case, that says, "We should reform our procurement process,” because the reason you would see that happen is they were really good at complying with requirements that came at USAID from Congress. You had an overworked workforce [within USAID] that had to comply with all these requirements. If you had a bid between two groups, one of which repeatedly delivered on the paperwork to get a good performance evaluation, and a new group that doesn't have that track record, who are you going to choose? That's how we ended up where we are.My understanding of the history is that it comes from a push from Republicans in the ‘80s, from [Senator] Jesse Helms, to outsource USAID efforts to contractors. So this is not a left-leaning thing. I wouldn't say it is right-leaning either. It was just a decision made decades ago. You combine that with the bureaucratic requirements of working with USAID, and you end up with a few firms and nonprofits skilled at dealing with it.It's definitely my impression that at various points in American history, different partisans are calling for insourcing or for outsourcing. But definitely, I think you're right that the NGO cluster around USAID does spring up out of a Republican push in the eighties.We talked to John Kamensky recently, who was on Al Gore's predecessor to DOGE in the ‘90s.I listened to this, yeah.I'm glad to hear it! I'm thinking of it because they also pushed to cut the workforce in the mid-90s and outsource federal functions.Earlier, you mentioned a slide that showed what we've learned in the field of development economics over the past 20 years. Will you narrate that slide for me?Let me do two slides for you. The slide that I was picturing was a count of randomized controlled trials in development that shows a fairly exponential growth. The movement started in the mid-to-late 1990s, but really took off in the 2000s. Even just in the past 10 years, it's seen a considerable increase. There's about 4-5,000 randomized controlled trials evaluating various programs of the kind USAID funds.That doesn't tell you the substance of what was learned. Here's an example of substance, which is cash transfers: probably the most studied intervention out there. We have a meta-analysis that counted 115 studies. That's where you start having a preponderance of evidence to be able to say something concrete. There's some variation: you get different results in different places; targeting and ways of doing it vary. A good systematic analysis can help tease out what we can say, not just about the effect of cash, but also how to do it and what to expect, depending on how it's done. Fifteen years ago, when we saw the first few come out, you just had, "Oh, that's interesting. But it's a couple of studies, how do you form policy around that?” With 115, we can say so much more.What else have we learned about development that USAID operators in the year 2000 would not have been able to act upon?Think about the development process in two steps. One is choosing good interventions; the other is implementing them well. The study of implementation is historically underdone. The challenge that we face — this is an area I was hoping USAID could make inroads on — was, studying a new intervention might be of high reward from an academic perspective. But it's a lot less interesting to an academic to do much more granular work to say, "That was an interesting program that created these groups [of aid recipients]; now let's do some further knock-on research to find out whether those groups should be made of four, six, or ten people.” It's going to have a lower reward for the researcher, but it's incredibly important.It's equivalent to the color of the envelope in direct marketing. You might run tests — if this were old-style direct marketing — as to whether the envelope should be blue or red. You might find that blue works better. Great, but that's not interesting to an academic. But if you run 50 of these, on a myriad of topics about how to implement better, you end up with a collection of knowledge that is moving the needle on how to achieve more impact per dollar.That collection is not just important for policy: it also helps us learn more about the development process and the bottlenecks for implementing good programs. As we're seeing more digital platforms and data being used, [refining implementation] is more possible compared to 20 years ago, where most of the research was at the intervention level: does this intervention work? That's an exciting transition. It's also a path to seeing how foreign aid can help in individual contexts, [as we] work with local governments to integrate evidence into their operations and be more efficient with their own resources.There's an argument I've seen a lot recently: we under-invest in governance relative to other foreign aid goals. If we care about economic growth and humanitarian outcomes, we should spend a lot more on supporting local governance. What do you make of that claim?I agree with it actually, but there's a big difference between recognizing the problem and seeing what the tool is to address it. It's one thing to say, “Politics matters, institutions matter.” There's lots of evidence to support that, including the recent Nobel Prize. It's another beast to say, “This particular intervention will improve institutions and governance.”The challenge is, “What do we do about this? What is working to improve this? What is resilient to the political process?” The minute you get into those kinds of questions, it's the other end of the spectrum from a cash transfer. A cash transfer has a kind of universality: Not to say you're going to get the same impact everywhere, but it's a bit easier to think about the design of a program. You have fewer parameters to decide. When you think about efforts to improve governance, you need bespoke thinking in every single place.As you point out, it's something of a meme to say “institutions matter” and to leave it at that, but the devil is in all of those details.In my younger years — I feel old saying that — I used to do a lot of work on financial inclusion, and financial literacy was always my go-to example. On a household level, it's really easy to show a correlation: people who are more financially literate make better financial decisions and have more wealth, etc. It's much harder to say, “How do you move the needle on financial literacy in a way that actually helps people make better decisions, absorb shocks better, build investment better, save better?” It's easy to show that the correlation is there. It's much harder to say this program, here, will actually move the needle. That same exact problem is much more complicated when thinking about governance and institutions.Let's talk about USAID as it stands today. You left USAID when it became clear to you that a lot of the work you were doing was not of interest to the people now running it. How did the agency end up so disconnected from a political base of support? There's still plenty of people who support USAID and would like it to be reinstated, but it was at least vulnerable enough to be tipped over by DOGE in a matter of weeks. How did that happen?I don't know that I would agree with the premise. I'm not sure that public support of foreign aid actually changed, I'd be curious to see that. I think aid has always been misunderstood. There are public opinion polls that show people thought 25% of the US budget was spent on foreign aid. One said, "What, do you think it should be?" People said 10%. The right answer is about 0.6%. You could say fine, people are bad at statistics, but those numbers are pretty dauntingly off. I don't know that that's changed. I heard numbers like that years ago.I think there was a vulnerability to an effort that doesn't create a visible impact to people's lives in America, the way that Social Security, Medicare, and roads do. Foreign aid just doesn't have that luxury. I think it's always been vulnerable. It has always had some bipartisan support, because of the understanding of the bigger picture and the soft power that's gained from it. And the recognition that we are a nation built on the idea of generosity and being good to others. That was always there, but it required Congress to step in and say, "Let's go spend this money on foreign aid." I don't think that changed. What changed was that you ended up with an administration that just did not share those values.There's this issue in foreign aid: Congress picks its priorities, but those priorities are not a ranked list of what Congress cares about. It's the combination of different interests and pressures in Congress that generates the list of things USAID is going to fund.You could say doing it that way is necessary to build buy-in from a bunch of different political interests for the work of foreign aid. On the other hand, maybe the emergent list from that process is not the things that are most important to fund. And clearly, that congressional buy-in wasn't enough to protect USAID from DOGE or from other political pressures.How should people who care about foreign aid reason about building a version of USAID that's more effective and less vulnerable at the same time?Fair question. Look, I have thoughts, but by no means do I think of myself as the most knowledgeable person to say, here's the answer in the way forward. One reality is, even if Congress did object, they didn't have a mechanism in place to actually object. They can control the power of the purse the next round, but we're probably going to be facing a constitutional crisis over the Impoundment Act, to see if the executive branch can impound money that Congress spent. We'll see how this plays out. Aside from taking that to court, all Congress could do was complain.I would like what comes back to have two things done that will help, but they don't make foreign aid immune. One is to be more evidence-based, because then attacks on being ineffective are less strong. But the reality is, some of the attacks on its “effectiveness,” and the examples used, had nothing to do with poorly-chosen interventions. There was a slipperiness of language, calling something that they don't like “fraud” and “waste” because they didn't like its purpose. That is very different than saying, “We actually agreed on the purpose of something, but then you implemented it in such a bad way that there was fraud and waste.” There were really no examples given of that second part. So I don't know that being more evidence-based will actually protect it, given that that wasn't the way it was really genuinely taken down.The second is some boundaries. There is a core set of activities that have bipartisan support. How do we structure a foreign aid that is just focused on that? We need to find a way to put the things that are more controversial — whether it's the left or right that wants it — in a separate bucket. Let the team that wins the election turn that off and on as they wish, without adulterating the core part that has bipartisan support. That's the key question: can we set up a process that partitions those, so that they don't have that vulnerability? [I wrote about this problem earlier this year.]My counter-example is PEPFAR, which had a broad base of bipartisan support. PEPFAR consistently got long-term reauthorizations from Congress, I think precisely because of the dynamic you're talking about: It was a focused, specific intervention that folks all over the political spectrum could get behind and save lives. But in government programs, if something has a big base of support, you have an incentive to stuff your pet partisan issues in there, for the same reason that “must-pass” bills get stuffed with everybody's little thing. [In 2024, before DOGE, PEPFAR's original Republican co-sponsor came out against a long-term reauthorization, on the grounds that the Biden administration was using the program to promote abortion. Congress reauthorized PEPFAR for only one year, and that reauthorization lapsed in 2025.]You want to carve out the things that are truly bipartisan. But does that idea have a timer attached? What if, on a long enough timeline, everything becomes politicized?There are economic theorems about the nature of a repeated game. You can get many different equilibria in the long run. I'd like to think there's a world in which that is the answer. But we have seen an erosion of other things, like the filibuster regarding judges. Each team makes a little move in some direction, and then you change the equilibrium. We always have that risk. The goal is, how can you establish something where that doesn't happen?It might be that what's happened is helpful, in an unintended way, to build equilibrium in the future that keeps things focused on the bipartisan aspect. Whether it's the left or the right that wants to do something that they know the other side will object to, they hold back and say, "Maybe we shouldn't do that. Because when we do, the whole thing gets blown up."Let's imagine you're back at USAID a couple of years from now, with a broader latitude to organize our foreign aid apparatus around impact and effectiveness. What other things might we want to do — beyond measuring programs and keeping trade-offs in mind — if we really wanted to focus on effectiveness? Would we do fewer interventions and do them at larger scale?I think we would do fewer things simpler and bigger, but I also think we need to recognize that even at our biggest, we were tiny compared to the budget of the local government. If we can do more to use our money to help them be more effective with their money, that's the biggest win to go for. That starts looking a lot like things Mark Green was putting in place [as administrator of USAID] under Trump I, under the Journey to Self-Reliance [a reorganization of USAID to help countries address development challenges themselves].Sometimes that's done in the context of, "Let's do that for five or ten years, and then we can stop giving aid to that country." That was the way the Millennium Challenge Corporation talked about their country selection initially. Eventually, they stopped doing that, because they realized that that was never happening. I think that's okay. As much as we might help make some changes, even if we succeed in helping the poorest country in the world use their resources better, they're still going to be poor. We're still going to be rich. There's still maybe going to be the poorest, because if we do that in the 10 poorest countries and they all move up, maybe the 11th becomes the poorest, and then we can work there. I don't think getting off of aid is necessarily the objective.But if that was clearly the right answer, that's a huge win if we've done that by helping to prove the institutions and governance of that country so that it is rolling out better policies, helping its people better, and collecting their own tax revenue. If we can have an eye on that, then that's a huge win for foreign aid in general.How are we supposed to be measuring the impact of soft power? I think that's a term that's not now much in vogue in DC.There's no one answer to how to measure soft power. It's described as the influence that we gain in the world in terms of geopolitics, everything from treaties and the United Nations to access to markets; trade policy, labor policy. The basic idea of soft power manifests itself in all those different ways.It's a more extreme version of the challenge of measuring the impact of cash transfers. You want to measure the impact of a pill that is intended to deal with disease: you measure the disease, and you have a direct measure. You want to measure the impact of cash: you have to measure a lot of different things, because you don't know how people are going to use the cash. Soft power is even further down the spectrum: you don't know exactly how aid is helping build our partnership with a country's people and leaders. How is that going to manifest itself in the future? That becomes that much harder to do.Having said that, there's academic studies that document everything from attitudes about America to votes at the United Nations that follow aid, and things of that nature. But it's not like there's one core set: that's part of what makes it a challenge.I will put my cards on the table here: I have been skeptical of the idea that USAID is a really valuable tool for American soft power, for maintaining American hegemony, etc. It seems much easier to defend USAID by simply saying that it does excellent humanitarian work, and that's valuable. The national security argument for USAID seems harder to substantiate.I think we agree on this. You have such a wide set of things to look at, it's not hard to imagine a bias from a researcher might lead to selection of outcomes, and of the context. It's not a well-defined enough concept to be able to say, "It worked 20% of the time, and it did not in these, and the net average…" Average over what? Even though there's good case studies that show various paths where it has mattered, there's case studies that show it doesn't.I also get nervous about an entire system that's built around [attempts to measure soft power]. It turns foreign aid into too much of a transactional process, instead of a relationship that is built on the Golden Rule, “There's people in this country that we can actually help.” Sure, there's this hope that it'll help further our national interests. But if they're suffering from drought and famine, and we can provide support and save some lives, or we can do longer term developments and save tomorrow's lives, we ought to do that. That is a good thing for our country to do.Yet the conversation does often come back to this question of soft power. The problem with transactional is you get exactly what you contract on: nothing more, nothing less. There's too many unknowns here, when we're dealing with country-level interactions, and engagements between countries. It needs to be about relationships, and that means supporting even if there isn't a contract that itemizes the exact quid pro quo we are getting for something.I want to talk about what you observed in the administration change and the DOGE-ing of USAID. I think plenty of observers looked at this in the beginning and thought, “It's high time that a lot of these institutions were cleaned up and that someone took a hard look at how we spend money there.”There was not really any looking at any of the impact of anything. That was never in the cards. There was a 90-day review that was supposed to be done, but there were no questions asked, there was no data being collected. There was nothing whatsoever being looked at that had anything to do with, “Was this award actually accomplishing what it set out to accomplish?” There was no process in which they made those kinds of evaluations on what's actually working.You can see this very clearly when you think about what their bean counter was at DOGE: the spending that they cut. It's like me saying, "I'm going to do something beneficial for my household by stopping all expenditures on food." But we were getting something for that. Maybe we could have bought more cheaply, switched grocery stores, made a change there that got us the same food for less money. That would be a positive change. But you can't cut all your food expenditures, call that a saving, and then not have anything to eat. That's just bad math, bad economics.But that's exactly what they were doing. Throughout the entire government, that bean counter never once said, “benefits foregone.” It was always just “lowered spending.” Some of that probably did actually have a net loss, maybe it was $100 million spent on something that only created $10 million of benefits to Americans. That's a $90 million gain. But it was recorded as $100 million. And the point is, they never once looked at what benefits were being generated from the spending. What was being asked, within USAID, had nothing to do with what was actually being accomplished by any of the money that was being spent. It was never even asked.How do you think about risky bets in a place like USAID? It would be nice for USAID to take lots of high-risk, high-reward bets, and to be willing to spend money that will be “wasted” in the pursuit of high-impact interventions. But that approach is hard for government programs, politically, because the misses are much more salient than the successes.This is a very real issue. I saw this the very first time I did any sort of briefing with Congress when I was Chief Economist. The question came at me, "Why doesn't USAID show us more failures?" I remember thinking to myself, "Are you willing to promise that when they show the failure, you won't punish them for the failure — that you'll reward them for documenting and learning from the failure and not doing it again?" That's a very difficult nut to crack.There's an important distinction to make. You can have a portfolio of evidence generation, some things work and some don't, that can collectively contribute towards knowledge and scaling of effective programs. USAID actually had something like this called Development Innovation Ventures (DIV), and was in an earmark from Congress. It was so good that they raised money from the effective altruist community to further augment their pot of money. This was strong because a lot of it was not evaluating USAID interventions. It was just funding a portfolio of evidence generation about what works, implemented by other parties. The failures aren't as devastating, because you're showing a failure of some other party: it wasn't USAID money paying for an intervention. That was a strong model for how USAID can take on some risks and do some evidence generation that is immune to the issue you just described.If you're going to do evaluations of USAID money, the issue is very real. My overly simplistic view is that a lot of what USAID does should not be getting a highly rigorous impact evaluation. USAID should be rolling out, simple and at scale, things that have already been shown elsewhere. Let the innovation take place pre-USAID, funded elsewhere, maybe by DIV. Let smaller and more nimble nonprofits be the innovators and the documenters of what works. Then, USAID can adopt the things that are more effective and be more immune to this issue.So yeah, there is a world that is not first-best where USAID does the things that have strong evidence already. When it comes to actual innovation, where we do need to take risks that things won't work, let that be done in a way that may be supported by USAID, but partitioned away.I'm looking at a chart of USAID program funding in Fiscal Year 2022: the three big buckets are humanitarian, health, and governance, all on the order of $10–12 billion. Way down at the bottom, there's $500 million for “economic growth.” What's in that bucket that USAID funds, and should that piece of the pie chart be larger?I do think that should be larger, but it depends on how you define it. I don't say that just because I'm an economist. It goes back to the comment earlier about things that we can do to help improve local governance, and how they're using their resources. The kinds of things that might be funded would be efforts to work with local government to improve their ability to collect taxes. Or to set up efficient regulations for the banking industry, so it can grow and provide access to credit and savings. These are things that can help move the needle on macroeconomic outcomes. With that, you have more resources. That helps health and education, you have these downstream impacts. As you pointed out, the earmark on that was tiny. It did not have quite the same heartstring tug. But the logical link is huge and strong: if you strengthen the local government's financial stability, the benefits very much accrue to the Ministry of Health, the Ministry of Education, and the Ministry of Social Protection, etc.Fighting your way out of poverty through growth is unambiguously good. You can look at many countries around the world that have grown economically, and through that, reduced poverty. But it's one thing to say that growth will alleviate poverty. It's another to say, "Here's aid money that will trigger growth." If we knew how to do that, we would've done it long ago, in a snap.Last question. Let's say it's a clean slate at USAID in a couple years, and you have wide latitude to do things your way. I want the Dean Karlan vision for the future of USAID.It needs to have, at the high level, a recognition that the Golden Rule is an important principle that guides our thinking on foreign aid and that we want to do unto others as we would have them do unto us. Being generous as a people is something that we pride ourselves in, our nation represents us as people, so we shouldn't be in any way shy to use foreign aid to further that aspiration of being a generous nation.The actual way of delivering aid, I would say, three things. Simpler. Let's focus on the evidence of what works, but recognize the boundaries of that evidence and how to contextualize it. There is a strong need to understand what it means to be simpler, and how to identify what that means in specific countries and contexts.The second is about leveraging local government, and working more to recognize that, as big as we may be, we're still going to be tiny relative to local government. If we can do more to improve how local government is using its resources, we've won.The third is about finding common ground. There's a lot. That's one of the reasons why I've started working on a consortium with Republicans and Democrats. The things I care about are generally non-partisan. The goal is to take the aspirations that foreign aid has — about improving health, education, economic outcomes, food security, agricultural productivity, jobs, trade, whatever the case is — and how do we use the evidence that's out there to move the needle as much as we can towards those goals? A lot of topics have common ground. How do we set up a foreign aid system that stays true to the common ground? I'd like to think it's not that hard. That's what I think would be great to see happen. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

At the end of April, the Transit Costs Project released a report: it's called How to Build High-Speed Rail on the Northeast Corridor. As the name suggests, the authors of the report had a simple goal: the stretch of the US from DC and Baltimore through Philadelphia to New York and up to Boston, the densest stretch of the country. It's an ideal location for high-speed rail. How could you actually build it — trains that get you from DC to NYC in two hours, or NYC to Boston in two hours — without breaking the bank?That last part is pretty important. The authors think you could do it for under $20 billion dollars. That's a lot of money, but it's about five times less than the budget Amtrak says it would require. What's the difference? How is it that when Amtrak gets asked to price out high-speed rail, it gives a quote that much higher?We brought in Alon Levy, transit guru and the lead author of the report, to answer the question, and to explain a bunch of transit facts to a layman like me. Is this project actually technically feasible? And, if it is, could it actually work politically?* How to cut time off the Northeast Corridor* Operations coordination as a time-saver* The move away from the Mad Men commuter* Was our episode on the Green Line extension wrong?The full transcript for this conversation is at www.statecraft.pub. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

Happy Fourth of July! I'm attending a wedding today, so this episode is from the vault, in a way, although it's its first time on Statecraft. I originally published this essay in January of 2022 on Mirror, shortly after my wife had joined the core team of a DAO that was attempting to acquire a first-edition copy of the US Constitution. I had been reading a history of the constitutional convention, and it seemed fitting to write about it on a thematic site. Yes, July 4th is about the Declaration of Independence, not the Constitution. Cut me some slack, please!You can find the transcript for this episode and many others at www.statecraft.pub. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

The decisions that humans make can be extraordinarily costly. The wars in Iraq and Afghanistan were multi-trillion-dollar decisions. If you can improve the accuracy of forecasting individual strategies by just a percentage point, that would be worth tens of billions of dollars. Yet society does not invest tens of billions of dollars in figuring out how to improve the accuracy of human judgment. That seems really odd.That's a quote from today's interviewee, who has made his career helping the intelligence community predict the future better. In this interview, we discuss:* Which prediction methods perform the best?* How does IARPA create tech for American spies?* What technologies give democracies an advantage over autocracies?* Could the Internet have been designed better?Our interviewee, Jason Matheny, championed research into human judgment and forecasting at the R&D lab for the intelligence community: the Intelligence Advanced Research Projects Activity, or IARPA, which he directed from 2015-2018.[This interview was originally published in 2023, at this link, without the audio: Statecraft was still transcript-only then.]You can find the transcript for this conversation at www.statecraft.pub. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

 There are many forces in policymaking (and in our lives generally) that push us towards the short term. Many of the most important measurements in political life are on extremely tight timelines: election cycles, monthly unemployment reports, even the President's daily intelligence briefing. The pressure to get results — and to show results — on a tight turnaround is incredible.One of my questions on Statecraft for a while has been: How do you build a machine to get long-term results? Whether it's a new agency or a new initiative, how do you set up a structure to work toward a goal that's 10, or 20, or 50 years away? And how do you protect that structure from short-term political pressures?Today's interviewee is Sir Rory Collins. Sir Rory has spent a full 20 years building and leading one of the most important scientific resources in the world: the UK Biobank.The Biobank represents a fascinating case study in long-term thinking. It's a database of half a million British participants whose health is being tracked longitudinally for the next 30 years. The Biobank was established with the knowledge that the upfront work, and the spending required, would only really start to pay off 15 years later. When Sir Rory went in for the 10-year review with funders, they asked what had been achieved so far. He said, “Nothing.”But today, UK Biobank is paying massive dividends: It's democratized access to population-scale data for researchers worldwide, and it's already yielding amazing insights into the causes of and cures for disease. I wanted to understand how he built the UK Biobank, and, just as importantly, how he managed to sustain it over a long period of time.We discussed* How to create long-term value in research* How to recruit half a million research subjects* Why the Biobank deferred so many decisions* How other countries' prospective studies are learning from the UK BiobankThe transcript for this conversation and many others is at www.statecraft.pub. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

What can we learn from Estonia? It's not a question you hear often — the nation of under two million residents doesn't mean much to many. But for good governance advocates, it's long been a touchpoint for its “e-government” model. The New Yorker wrote in 2017 that, “apart from transfers of physical property, such as buying a house, all bureaucratic processes can be done online.” Wired called Estonia “the world's most digitally advanced society.” On its “e-Estonia” site, the country itself brags, in a mod font, “We have built a digital society and we can show you how.”The Estonian model has a lot going for it from the perspective of a citizen. For example: Taxes take a few minutes to file, you can see every time the government looks at your data, and you never have to give the government a piece of information more than once. And it makes governance easier: the bureaucracy is leaner, information is shared across agencies, and data is more secure.But how much of this model could be adopted here in the US, or in the rest of the West? And how much is reliant on a cultural and societal context we just don't have here? To get answers, I talked to Joel Burke, author of the new book Rebooting a Nation: The Incredible Rise of Estonia, E-Government and the Startup Revolution. Joel is an American who worked with the Estonian government, and I learned a lot from his book.For the full transcript of this conversation and others, visit www.statecraft.pub. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

Today we talked to Randy Clarke, the head of DC's Metro system, WMATA. If you're a transit nerd, you probably know about Clarke — he's become something of a celebrity for his public presence and disciplined improvement of a transit system that was facing disaster in the aftermath of COVID (and the decision to allow large swathes of federal employees to work from home).I've been a regular WMATA rider for long periods of my life, and what Clarke has done over the last three years has been pretty remarkable. We'll get into some of the details here, but what stands out to me — and why I so wanted to record this conversation — is that Clarke's managed to advance a bunch of his priorities at once. From the outside, it can seem like he hasn't had to make any tradeoffs at all: between safety and speed, catching fare evaders and keeping costs down, etc. How has he pulled it off?You can read the transcript for this conversation (and others) at www.statecraft.pub. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

 Santi: Hi, this is a special episode of Statecraft. I've got a wonderful guest host with me today. Kyla Scanlon: Hey, I'm Kyla Scanlon! I'm the author of a book called In This Economy and an economic commentator. Santi: Kyla has joined me today for a couple reasons. One, I'm a big fan of her newsletter: it's about economics, among many other things. She had a great piece recently on what we can learn from C.S. Lewis's The Screwtape Letters, which is a favorite book of mine.Kyla's also on today because we're interviewing Wally Adeyemo, who was the Deputy Secretary of the Treasury in the Biden administration. We figured we each had questions we wanted answered.Kyla: Yeah, I've had the opportunity to interview Wally a couple times during the Biden administration, and I wanted to see where he thinks things are at now. He played a key role in implementing the Inflation Reduction Act, financial sanctions on Russia, and a whole bunch of other things.Santi: For my part, I'm stuck on Wally's role in setting up the IRS's Direct File program, where you can file your taxes for free directly through the IRS instead of paying TurboTax a hundred bucks to do it. “Good governance types” tend to love Direct File, but the current admin is thinking of killing it. I wanted to understand how the program got rolled out, how Wally would respond to criticisms of the program, and what he learned from building something in government, which now may disappear.Kyla, you've talked to Wally before. How did that conversation go? Kyla: I actually was able to go to his office in D.C., and I talked to a couple of key people in the Biden administration: Jared Bernstein, the former chair of the CEA, and Daniel Hornung, who was at the National Economic Council.We're talking to Wally on the day that the House passed the one big beautiful bill. There's also so much happening financially, like the bond market is totally rebelling against the US government right now. I'm really curious how he thinks things are, as a key player in the last administration.Santi: Wally, you've spent most of your career in Democratic Party institutions. You worked on the Kerry presidential campaign in 2004. You served in the Obama admin. You were the first chief of staff to the CFPB, the president of the Obama Foundation, and, most recently, Deputy Treasury Secretary in the Biden admin.30,000ft question: How do you see the Democratic Party today?My view is that we continue to be the party that cares deeply about working-class people, but we haven't done a good job of communicating that to people, especially when it comes to the things that matter most to them. From my standpoint, it's costs: things in America cost too much for a working-class family.I want to make sure I define working class: I think about people who make under $100,000 a year, many of whom don't own homes on the coast or don't own a significant amount of stocks (which means they haven't seen the asset appreciation that's led to a great deal of wealth creation over the last several decades). When you define it that way, 81% of Americans sit in that category of people. Despite the fact that they've seen their median incomes rise 5-10% over the last five years, they've seen the cost of the things they care about rise even faster.We haven't had a clear-cut agenda focused on the standard of living, which I think is the thing that matters most to Americans today.Santi: There are folks who would say the problem for Democrats wasn't that they couldn't communicate clearly, or that they didn't have a governing agenda, but that they couldn't execute their agenda the way they hoped to in the time available to them. Would you say there's truth to that claim?Most people talk about a communications issue, but I don't think it's a communications issue. There are two issues. One is an implementation issue, and the second is an issue of the actual substance and policy at the Treasury Department. I was the deputy secretary, but I was also the Chief Operating Officer, which meant that I was in charge of execution. The two most significant domestic things I had to execute were the American Rescue Plan, where $1.9 trillion flowed through the Treasury Department, and the Inflation Reduction Act. The challenge with execution in the government is that we don't spend a lot on our systems, on making execution as easy as possible.For example, the Advanced Child Tax Credit was intended to give people money to help with each of their children during the pandemic. What Congress called on us to do was to pay people on a monthly basis. In the IRS system, you pay your taxes mostly on an annual basis, which meant that most of our systems weren't set up to pay a monthly check to Americans. It took us a great deal of work to figure out a way to recreate a system just to do that.We've underinvested in the systems that the IRS works on. The last time we made a significant investment in the IRS's digital infrastructure was the 1960s; before we had an ATM machine, before we sent a man to the moon, before we had a personal computer. So that meant that everything was coded in a language called COBOL.So execution was quite hard in the American Rescue Plan. People were left out and felt that the government wasn't working for them. If you called the IRS, only 13% of your calls were being answered. We got that back up to 85% before we left. Ultimately, I think part of this is an execution challenge. In government we want to spend money coming up with new policies, but we don't want to pay for execution, which then means that when you get the policy passed, implementation isn't great.When Jen Pahlka was on your show, she talked about the need to focus on identifying the enablers to implementation. Direct File was one of the best examples of us taking implementation very seriously.But also, on some policy issues that mattered most to Americans, we weren't advancing the types of strategies that would've helped lower the cost of housing and lowering the cost of medicine. We did some things there, but there's clearly more that we could have done, and more we need to do going forward to demonstrate that we're fighting to bring down those costs. It's everything from permitting reform — not just at the federal level, but what can we do to incentivize it at the state and local level — to thinking about what we can do on drug costs. Why does it cost so much more to get a medicine in America than in Canada? That is something that we can solve. We've just chosen not to at the federal level.At the end of the year, we were going to take action to go after some of the middlemen in the pharmacy industry who were taking out rents and large amounts of money. It dropped out of the bill because of the negotiations between the Republican Congress and then President-elect Trump. But there are a lot of things that we can do both on implementation, which will mean that Americans feel the programs that we're passing in a more effective way, and policy solutions that we need to advance as a party that will help us as well.Kyla: Some people think Americans tend to vote against their own self-interest. How can your party message to people that these sorts of policies are really important for them?Ultimately, what I found is that most people just understand their self-interest differently, and for them, a big part of this was, “Who's fighting for me on the issues that I care most about?”From my standpoint, part of the problem we had with Direct File, which I think was an innovative solution, was that we got to implementing it so late in the administration that we didn't have the ability for it to show the impact. I'm hoping future administrations will think through how to start their implementation journey on things like Direct File sooner in the administration, when you have a great deal of political capital, so people can actually feel the impact over time.To your question, it's not just about the messaging, it's about the messenger. People tend to trust people who look like them, who come from the places they come from. When it came to the Child Tax Credit and also to Direct File, the biggest innovation wasn't the technology: the technology for Direct File has been used by the Australians, the British, and other countries for decades.The biggest innovation was us joining that technology with trusted people in communities who were going out to talk to people about those programs and building those relationships. That was something that the IRS hadn't done a great deal of. We invested a great deal in those community navigators who were helping us get people to trust the things the government was doing again, like the Child Tax Credit, like Direct File, so that they could use it.We often think that Washington is going to be able to give messages to the country that people are going to hear. But we're both in a more complicated media environment, where people are far more skeptical of things that come from people in Washington. So the best people to advocate for and celebrate the things that we're doing are people who are closer to the communities we're trying to reach. In product advertising today, more companies are looking to influencers to advertise things, rather than putting an ad on television, because people trust the people that they follow. The same is true for the things that we do in government.Santi: I've talked to colleagues of yours in the last administration who say things like, “In the White House, we did not have a good enough sense of the shot clock.” They point to various reasons, including COVID, as a reason the admin didn't do a good enough job of prioritization.Do you think that's true, that across the administration, there was a missing sense of the shot clock or a missing sense of prioritization? No, because I'm a Lakers fan. These are professionals. We're professionals. This is not our first rodeo. We know how much time is on the shot clock; we played this game. The challenge wasn't just COVID. For me at Treasury — and I think this is the coolest part of being Deputy Secretary of the Treasury — I had responsibilities domestic and international. As I'm trying to modernize the IRS, to invest all my time in making the system work better for customers and to collect more taxes from the people who owe money, Russia invades Ukraine. I had to turn a bunch of my attention to thinking about what we were going to do there. Then you have Hamas attacking Israel.There was more we should have done on the domestic end, but we have to remember that part of the presidency is: you get to do the things you want to do, but you also have to do the things you have to do. We had a lot of things we had to do that we weren't planning for which required all-of-the-administration responses.I think the most important lesson I've learned about that is that it comes down to both being focused on the things that matter, and being willing to communicate to the American people why your priorities have to change in light of things that happen in the world.But the people I'm sure you've talked to, most of them work on domestic policy alone, and they probably never have been in a National Security Council meeting, where you're thinking about the risks to the country. The president has to do both of those things. So I get how difficult it is to do that, just given where I sat at the Treasury Department.Santi: Looking back from an implementation perspective, are there things you would've done differently during your time at Treasury?The most important thing that I would've done differently was to immediately set up a permanent implementation and delivery unit in the Treasury Department. We always like to pretend like the Treasury Department is just a policy department where we make policy, we collect taxes. But in any crisis the country ever has, a great deal of responsibility — for execution or implementation of whatever the response is — falls to the Treasury Department. Think about the financial crisis, which is clearly something that's in the Treasury's domain. The vast majority of money for COVID flowed through the Treasury Department. You think about the IRA, a climate bill: the vast majority of that money flows through the Treasury Department.And Treasury doesn't have a dedicated staff that's just focused on implementation: How do we do this well? How do we make sure the right people are served? How do we make sure that we communicate this well? We did this to a degree by a team that was focused on the American Rescue Plan. But it was only focused on the American Rescue Plan. If I could start again, I would have said, “I want a permanent implementation structure within the Treasury Department of people who are cross-cutting, who only think about how we execute the policies that we pass through Congress and that we put together through an executive order. How do we do that extremely well?”Kyla: What you're talking about is very people-centric: How do we get an implementation team, and how do we make sure that the right people are doing the right jobs? Now we have DOGE, which is less people-centric. How do you reconcile what Doge is doing relative to what you would've done differently in this role that you had?As you would suspect, I wasn't excited about the fact we had lost the election, but initially I thought DOGE could be helpful with technology. I think marrying technology with people — that's the key to success for the government. We've never really been great at doing technology in the government.Part of the reason for that is a procurement process that is very slow because of how the federal acquisition rules work. What we are trying to do is prevent corruption and also waste, fraud, and abuse. But what that does is, it leads to slowness in our ability to get the technology on board that we need, and in getting the right people.I was hoping DOGE would bring in people who knew a great deal about technology and put us in a position where we could use that to build better products for the American people. I thought they would love Direct File, and that they would find ways to improve Direct File and expand it to more Americans.My view is that any American in the working class or middle class should not have to pay a company to file their taxes. We have the ability in this country, and I think Direct File was proving that. My goal, if we'd had more time, was to expand this to almost any American being able to use it. I thought they'd be able to accelerate that by bringing in the right people, but also the right technology. We were on that path before they took those two things apart.My sense is that you have to reform the way that we hire people because it's too hard to hire the right people. In some cases, you don't need some of the people you have today because technology is going to require different skills to do different things. It's easier to break something, I found, than it is to build something. I think that's what they're finding today as well.Santi: When I talk to left-of-center folks about the DOGE push, they tend to be skeptical about the idea that AI or modern technology can replace existing federal workers. I think some of that is a natural backlash to the extreme partisan coding of DOGE, and the fact that they're firing a lot of people very quickly. But what's your view? After DOGE, what kinds of roles would you like to see automated?Let me say: I disagree with the view that DOGE and technology can't replace some of the things that federal workers do today. My view is that “productivity enhancing” tech — it's not that it is going to make employees who are currently doing the job more productive. It is going to mean you need fewer employees. We have to be honest about that.Go to the IRS, for example. When I got there, we had a huge paper backlog at the IRS because, despite what most people think, millions of people still file their taxes by paper, and they send them to the IRS. And during the pandemic, the commissioner, who was then working for President Trump, decided to shut down the IRS for public health reasons — to make sure employees did not have to risk getting COVID.There were piles of paper backing up, so much so that they had filled cafeterias at the IRS facilities with huge piles of paper. The problem, of course, is that, unlike modern systems, you could not just machine-read those papers and put them into our systems. Much of that required humans to code those papers into the system by hand. There is no need in the 21st century for that to happen, so one of the things that we started to do was introduce this simple thing called scanning, where you would scan the papers — I know it sounds like a novel idea. That would help you get people's tax returns faster into the system, but also get checks out quickly, and allow us to see if people are underpaying their taxes, because we can use that data with a modern system. But over time, what would that mean? We'd need fewer people to enter the data from those forms.When we get money for the IRS from Congress, it is actually seen as revenue-raising because they expect it to bring down the debt and deficit, which is completely true. But the model Congress uses to do that is reliant on the number of full-time employees we hire. One challenge we have with the IRS — and in government systems in general — is that you don't get credit for technology investments that should improve your return on investment.So whenever we did the ROI calculations for the IRS, the Congressional Budget Office would calculate how much revenue we'd bring in, and it was always based on the number of people you had doing enforcement work that would lead to certain dollars coming in. So we got no credit for the technology investments. Which was absolutely the opposite of what we knew would be true: the more you invested in technology, the more likely you were to bring in more revenue, and you would be able to cut the cost of employees.Santi: If the CBO changed the way it scored technology improvements, would more Congresspeople be interested in funding technology?It is just a CBO issue. It's one we've tried to talk to them about over the last several years, but one where they've been unwilling to move. My view is that unlocking this will unlock greater investment in technology in a place like the IRS, because every dollar you invest in technology — I think — would earn back $10 in additional tax revenue we'd be able to collect from people who are skipping out on their taxes today. It's far more valuable to invest in that technology than to grow the number of employees working in enforcement at the IRS. You need both, but you can't say that a person is worth 5x their salary in revenue and that technology is worth 0. That makes no sense.Kyla: When we spoke about Direct File many months ago, people in my comment section were super excited and saying things like, “I just want the government to tell me how much money I owe.” When you think about the implementation of Direct File, what went right, and how do you think it has evolved?The thing that went right was that we proved that we could build something quite easily, and we built it ourselves, unlike many technology projects in government. We didn't go out and hire a bunch of consultants and contractors to do it. We did it with people at the IRS, but also with people from 18F and from GSA who worked in the government. We did it in partnership with a number of stakeholders outside the government who gave us advice, but the build was done by us.The reason that was important — and the reason it's important to build more things internally rather than hiring consulting firms or other people to build it — is that you then have the intellectual capital from building that, and that can be used to build other things. This was one product, but my view is that I want the IRS home page to one day look a lot more like the screen on your iPhone, so that you can click on the app on the IRS homepage that can help you, depending on what you need — if it's a Direct File, or if it's a tax transcript.By building Direct File internally, we were getting closer to that, and the user scores on the effectiveness of the tool and the ability to use it were through the roof. Even for a private sector company, it would've been seen as a great success. In the first year, we launched late in the filing season, mostly just to test the product, but also to build stakeholder support for it. In the limited release, 140,000 people used it. The average user said that before Direct File, it took them about 13 hours to file their taxes, and with Direct File, it took them just over an hour to file their taxes.But you also have to think about how much money the average American spends filing their taxes: about $200. That's $200 that a family making under $100,000 could invest in their kids, in paying some bills, rather than in filing their taxes.Even this year, with no advertising by the Trump administration of Direct File, we had more than 300,000 people use it. The user scores for the product were above 85%. The challenge, of course, is that instead of DOGE investing in improving the product — which was a place where you could have seen real intellectual capital go to work and make something that works for all Americans — they've decided to discontinue Direct File. [NB: There has been widespread reporting that the administration plans to discontinue Direct File. The GOP tax bill passed by the House would end Direct File if it becomes law. At the time of publication, the Direct File has not been discontinued.]The sad part is that when you think about where we are as a country, this is a tool that could both save people money, save people time, improve our ability to collect taxes, and is something that exists in almost every other developed economy. It makes no sense to me why you would end something like this rather than continue to develop it.Santi: People remember the failure of healthcare.gov, which crashed when it was rolled out all at once to everyone in the country. It was an embarrassing episode for the Obama administration, and political actors in that administration learned they had to pilot things and roll them out in phases.Is there a tension between that instinct — to test things slowly, to roll them out to a select group of users, and then to add users in following cycles — Is there a tension between that and trying to implement quickly, so that people see the benefit of the work you're doing?One of my bosses in the Obama administration was Jeff Zients, the person who was brought in to fix healthcare.gov. He relentlessly focused on execution. He always made the point that it's easy to come up with a strategy to some degree: you can figure out what the policy solution is. But the difference between good and great is how you execute against it. I think there is some tension there, but not as much as you would think.Once we were able to show that the pilot was a success, I got invited to states all over the country, like Maryland, to announce that they were joining Direct File the next year. These members of Congress wanted to do Direct File events telling people in their state, “This product that's worked so well elsewhere is coming to us next.” It gave us the ability to celebrate the success.I learned the lesson not just from Zients, but also from then-professor Elizabeth Warren, whom I worked for as chief of staff at the CFPB. One challenge we had at the CFPB was to build a complaint hotline, at that point mostly phone-operated, for people who were suffering. They said it would take us at least a year to build out all the product functions we need. We decided to take a modular approach and say, “How long would it take for us to build the system for one product? Let's try that and see how that works. We'll do a test.”It was successful, and we were able to use that to tell the story about the CFPB and what it would do, not just for mortgages, but for all these other products. We built user interest in the complaint hotline, in a way that we couldn't have if we'd waited to build the whole thing at once. While I think you're right that there is some tension between getting everyone to feel it right away and piloting; if the pilot is successful, it also gives you the opportunity to go out and sell this thing to people and say, “Here's what people who did the pilot are saying about this product.”I remember someone in Texas who was willing to do a direct-to-camera and talk about the ways that Direct File was so easy for them to use. It gets back to my point on message and messenger. Deputy Secretary Adeyemo telling you about this great thing the government did is one thing. But an American who looks like you, who's a nurse, who's a mom of two kids, telling you that this product actually worked for her: That's something that more people identify with.Healthcare.gov taught us the lesson of piloting and doing things in a modular way. This is what companies have been doing for decades. If it's worked for them, I think it can work for the government too.Santi: I'm a fan of Direct File, personally. I don't want this administration to kill it. But I was looking through some of the criticism that Direct File got: for instance, there's criticism about it rivaling the IRS Free File program, which is another IRS program that partners with nonprofits to help some folks file their taxes for free.Then there's this broader philosophical criticism: “I don't want the feds telling me how much I owe them.” The idea is that the government is incentivized to squeeze every last dollar out of you.I'm curious what you make of that, in part because I spoke recently to an American who worked on building e-government systems for Estonia. One of the things that has allowed Estonia to build cutting-edge digital systems in the government is that Estonia is a small and very high-trust society. Everybody's one degree of separation from everybody else.We're a much bigger and more diverse country. How do you think that affects the federal government's ability to build tools like Direct File?I think it affects it a lot, and it gets back to my point: not just the message but the messenger. I saw this not just with Direct File, but with the Advanced Child Tax Credit, which was intended to help kids who were living in poverty, but also families overall. What we found initially in the data was that, among families that didn't have to file taxes because they made too little, many of them were unwilling to take advantage of Direct File and the Advanced Child Tax Credit because they couldn't believe the government was doing something to just help them. I spent a lot of time with priests, pastors, and other community leaders in many of the communities where people were under-filing to try and get them to talk about this program and why it was something that they should apply for.One of the challenges we suffer from right now in America, overall, is a lack of trust in institutions. You have to really go local and try to rebuild that trust.That also speaks to taking a pilot approach that goes slower in some cases. Some of the criticism we got was, “Why don't you just fill out this form for us and then just send it to us, so that Direct File is just me pressing a button so I can pay my taxes?”Part of the challenge for us in doing that is a technology challenge: we are not there technologically. But the other problem is a trust problem. If I were to just fill out your taxes for you and send them to you, I think people, at this stage, would distrust the government and distrust the technology.Direct File had to be on a journey with people, showing people, “If I put in this information, it accurately sends me back my check.” As people develop more trust, we can also add more features to it that I think people will trust. But the key has to be: how do you earn that trust over time?We can't expect that if we put out a product that looks like something the Estonian government or Australia would put out, that people would trust it at this point. We have to realize that we are on a journey to regain the trust of the American people.The government can and will work for them, and Direct File was a part of that. We started to demonstrate that with that product because the people who used it in these communities became the spokespeople for it in a better way than I ever could be, than the Secretary or the President could be.Everyone knows that they need to pay their taxes because it's part of their responsibility living in this country. The things that make people the most upset is the fact that there are people who don't pay their taxes. We committed that we were going to go after them.The second frustration was: “Why do you make it so hard for me to pay my taxes? Why can't I get through to you on the phone line? Why do I have to pay somebody else to do my taxes?” Our goal was to solve those two problems by investing money and going after the people who just decided they weren't going to pay, but also by making it as easy as possible for you to pay your taxes and for most people, to get that tax refund as quickly as possible.But doing that was about going on a journey with people, about regaining their trust in an institution that mattered to them a great deal because 90 something-percent of the money that funds our government comes in through the IRS.Kyla: You have a piece out in Foreign Affairs called “Make Moscow Pay,” and what I found most interesting about that essay is that you said Europe needs to step it up because the United States won't. Talk through the role of Treasury in financial sanctions, and your reasons for writing this piece.People often think about the Treasury Department as doing a few things. One is working with Wall Street; another one is collecting your taxes. Most people don't think about the fact that the Treasury Department is a major part of the National Security Committee, because we have these tools called financial sections.They use the power of the dollar to try and change the behavior of foreign actors who are taking steps that aren't consistent with our national security interests. A great example of this is what we did with regard to Russia — saying that we're going to cut off Russian banks from the US financial system, which means that you can't transact in US dollars.The problem for any bank that can transact in dollars is that the backbone of most of the financial world is built on the US dollar. It increases their cost, it makes it more difficult for them to transact, and makes it harder for them to be part of the global economy, nearly impossible.And that's what we've done in lots of cases when it comes to Russia. We have financial sanction programs that touch all over the world, from Venezuela to Afghanistan. The US government, since 9/11, has used sanctions as one of its primary tools of impacting foreign policy. Some of them have gone well, some of them I think haven't gone as well, and there's a need for us to think through how we use those policies.Santi: What makes sanctions an effective tool? Positions on sanctions don't line up neatly on partisan lines. Sanctions have a mixed track record, and you'll have Republicans who say sanctions have failed, and you'll have Democrats say sanctions have been an effective tool, and vice versa.The way I think about sanctions is that they are intended to bring change, and the only way that they work is that they're part of an overarching foreign policy strategy. That type of behavior change was what we saw when Iran came to the table and wanted to negotiate a way to reduce sanctions in exchange for limits on their nuclear program. That's the type of behavior change we're trying to accomplish with sanctions, but you can't do it with sanctions alone. You need a foreign policy strategy. We didn't do it by the United States confronting Iran; we got our allies and partners to work together with us. When I came into office in 2021, Secretary Yellen asked me to do a review of our sanctions policies — what's worked, what hasn't — because it had been 20 years since the 9/11 attacks.And the most important lesson I learned was that the sanctions programs that were the most effective were the ones we did on a multilateral basis — so we did it with our friends and allies. Part of the reason for this is that while the dollar is the most dominant currency around the world, oftentimes if you can't do something in dollars, you do it in a euro, or you do it in a Japanese yen, or pound sterling.The benefit of having allies all over the world is that the dominant, convertible currencies in the world are controlled by allies and partners. When we acted together with them, we were more effective in curtailing the economic activity of our adversary, and our pressure is more likely to lead to them changing their behavior.We had to be very cautious about collateral damage. You might be targeting an individual, but by targeting that individual, you might make it harder for a company they're affiliated with to continue doing business, or for a country that they're in to get access to banking services. Let's say that you're a huge bank in America, and you're worried about sanctions risk in a small country where you do little business. Why not pull out, rather than having to put in place a huge compliance program? One of the challenges that we have is that the people who make the decisions about whether to extend sanctions don't necessarily spend a lot of time thinking about some of these economic consequences of the sanctions approach.Whenever I was around the table and we were making a decision about using weapons, there was a process that was very elaborate that ended up with something going to the president. You'd often think about kinetic force very seriously, because you were going to have to get the president to make a decision. We didn't always take that kind of rigor when it came to thinking about using our sanctions policy, but the impact on the lives of people in these countries was just as significant for their access to not only money, but to food and to the resources they needed to live.Santi: What do you make of the effectiveness of the initial sanctions on Russia after the invasion of Ukraine? I've heard mixed reviews from folks inside and outside the Biden administration.Sanctions, again, to my point, are only a tool. They've had to be part of a larger strategy, and I think those sanctions were quite effective. I think the saving grace for the Russians has been the fact that China has largely been able and willing to give them access to the things they need to continue to perpetuate.There was a choice for Ukraine, but when you think about Russia's economy today vs. Russia's economy before the sanctions were put in place, it's vastly different. Inflation in Russia still runs far higher than inflation anywhere else in the world. If you were a Russian citizen, you would feel the impacts of sanctions.The challenge, of course, is that it hasn't changed Vladimir Putin's behavior or the behavior of the Kremlin, largely because they've had access to the goods and supplies they need from China, Iran, and North Korea. But over time, it means Russia's economy is becoming less competitive. They have less access to resources; they're going to struggle.I think everyone hoped that sanctions would immediately change the calculus of the Kremlin, but we've never seen that to be the case. When sanctions are effective, they take time, because the economic consequences continue to compound over time, and they have to be part of a larger strategy for the behavior of the individual. That's why I wrote the article, because while the Kremlin and Russia are under pressure, their view is that ultimately the West is going to get tired of supporting Ukraine, financially and politically, because the economic consequences for us — while not as significant as for Moscow or for Kiev — have been quite significant, when you think about the cost of living issues in Europe.I think it's important to write this now, when it appears that Russia is stalling on negotiations, because ultimately, US financial support is waning. We just know that the Trump administration is not willing to put more money into Ukraine, so Europe is going to have to do more, at a time when their economic situation is quite complicated as well.They've got a lot to do to build up their economy and their military-industrial base. Asking them to also increase their support for Ukraine at the same time is going to be quite difficult. So using this money that Russia owes to Ukraine — because they owe them compensation at this moment — can be quite influential in helping support the Ukrainians, but also changing Russia's calculus with regard to the ability of Ukraine to sustain itself.Kyla: On CNBC about a month ago, you said if we ever have a recession over the next couple of months or so, it would be a self-inflicted one. Do you still resonate with that idea? To build on the point I was making, the economy has done quite well over the course of the first few months of the year, largely because of the strength of the consumer, where our balance sheets are still quite strong. Companies in America have done well. The biggest headwind the US economy faces has been self-inflicted by the tariffs the president has put on. Part of what I still do is talk to CEOs of companies, big and small. Small businesses feel the impact of this even more than the big businesses. What they tell me is that it's not just the tariffs and the fact that they are making it more expensive for them to get the goods that they need, but it's the uncertainty created by the off-again, on-again, nature of those tariffs that makes it impossible for them to plan for what supplies they're going to get the next quarter. How are they going to fulfill their orders? What employees are they going to need? It's having a real impact on the performance of these companies, but also their ability to hire people and plan for the future.If you go to the grocery store, you're going to start seeing — and you're starting to see already — price increases. The thing that Americans care most about is, the cost of living is just too high. You're at the grocery store, as you're shopping for your kids for the summer, you're going to see costs go up because of a self-imposed tax we've put in place. So I still do think that if we do find ourselves in a recession, it's going to be because of the tariffs we've put in place.Even if we don't enter a technical recession, what we're seeing now is that those tariffs are going to raise the cost for people when they go out to buy things. It's going to raise the cost of building homes, which is going to make it harder for people to get houses, which is ultimately going to have an impact on the economy that isn't what I think the president or anyone wants at this point.Kyla: Is there anything else we haven't asked about? I think the place where we continue, as a country, to struggle is that, given the federal system we have, many of these problems aren't just in Washington — they're in state and local governments as well. When you think about the challenges to building more housing in this country, you can't just solve it by doing things at the federal level. You have to get state and local governments unified in taking a proactive approach. Part of this has to be not just financial or regulatory from the federal government, but we have to do more things that force state and local governments to get out of the way of people being able to build more housing. I think that the conversations that you've had on your show, and the conversations we're having in government, need to move past our regular policy conversations of: “Should we do more on LIHTC? Should we try to fix NEPA?” Those, to me, are table stakes, and we're in the middle of what I'd say is a generational crisis when it comes to housing. We have to be willing to treat it like a crisis, rather than what I think we've done so far, which is take incremental steps at different levels to try and solve this. That's one thing that I wanted to make sure that I said, because I think it's the most important thing that we can do at the moment.Kyla: Absolutely. During your time there, the Treasury was doing so much with zoning reform, with financial incentives. What I really liked about our last conversation was how much you talked about how important it is that workers can live close to work. Are you optimistic that we will be able to address the problem, or do you think we are sinking into quicksand?I'd say a little bit of both, and the thing that I'm doing now is getting hyperlocal. One of the projects I'm working on in my post-administration life is I'm working with 15 churches in D.C., where they have vacant land and want to use it to build affordable housing as quickly as possible.I'm learning that even when you have the land donated for free and you're willing to work as quickly as possible, it's still quite hard because you have regulations and financial issues that often get in the way of building things. Part of what we have to do now is just launch as many natural experiments as possible to see what works.What I've learned already from this lived experience is that even cities that are trying to get out of the way and make it easier to build housing struggle because of what you all know to be true, which is that the local politics of this is quite complicated. Oftentimes, the way that you get them over the line is by creating incentives or disincentives.In the past, I talked a lot about incentives in terms of “giving people money to do things.” I'm now in favor of “not giving money to people who don't do things” — if you don't take steps to fix your zoning, some of the federal money that you regularly get is not coming to your jurisdiction. I'm going to reallocate that money to places that are doing this activity. I think we have to take those types of radical steps.It's similar to what we did with the Emergency Rental Assistance Program, where if you didn't spend your money, we could take your money back and reallocate it to people who were giving away emergency rental assistance money.That motivates people a lot — when they feel like something's going to be taken away from them. I'm of the view that we have to find more radical things that we can do to get housing built. If we don't, costs will continue to rise faster than people's incomes.Santi: Wally, I have to ask after that point you just made: did you read the paper by my colleague Chris Elmendorf on using LIHTC funds? The idea is to re-allocate those federal funds away from big, expensive cities and into other places in a state, if the cities don't commit to basic zoning reforms.I completely agree with him, and I think I would go even further than just LIHTC money. I would reallocate non-housing money as well, because from my standpoint, if you think about the most important issue for a family, it's being able to find housing that is affordable near their place of work and where their kids go to school. I said that on purpose. I didn't say “affordable housing.” I said “housing that is affordable,” because affordable housing is, in lots of ways, targeted towards a population of people who need it the most. But for even people who are middle income in this country, it crowds out their ability to pay for other things when housing costs continue to creep higher.The only way we solve that problem is if you get rid of restrictive zoning covenants and fix permitting. The natural thing that every city and state is thinking about right now is throwing more money at the problem. There's going to need to be money here, just in light of some of the headwinds, but it's going to be more costly and less effective if we don't fix the underlying issues that are making it hard to build housing where we want it.Right now in California, we're having a huge debate over what we do with infill housing in urban areas. A simple solution — you don't have to do another environmental review if one was already done in this area— is taking months to work through the California legislature, which demonstrates that we're going too slow. California's seeing an exodus of people. I just talked to a CEO who said, “I'm moving my business because the people who work for me can't afford to live in California anymore.” This is the kind of problem that you can solve. State legislatures, Congress, and executives have to get together and take some radical steps to make it easier to build housing.I appreciate what you said about what we were doing at Treasury, but from my standpoint, I wish we had done more earlier to focus on this issue. We had a lot going on, but fundamentally, the most important thing on housing is taking a step to try and build housing today, which is going to have an impact on the economy 10, 20, 30 years from now. We just have to start doing that as soon as possible.Thanks to Emma Hilbert for her transcript and audio edits. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

 Today, we're taking a look at a predecessor to DOGE: The Reinventing Government project (officially known as the NPR, for National Partnership for Reinventing Government). The NPR ran for almost the full duration of President Bill Clinton's two terms, and led to the elimination of over 100 programs and over 250,000 federal jobs.Both NPR and DOGE are case studies in a long history of government reform efforts — some more successful than others. Our guest is John Kamensky, who served as Vice President Al Gore's deputy for the National Performance Review (NPR) for eight years. Kamensky was colloquially known as “Mr. Checklist” for his work organizing the Reinventing Government initiative.Kamensky is a clear-eyed observer, and he doesn't hedge about NPR's failures and missed opportunities. In some ways, the Reinventing Government Initiative was a once-in-a-lifetime opportunity to cut headcount, spending, and regulation at the end of the Cold War and change the way the government operated.We discuss:* Did the NPR actually work?* What was the Board of Tea Experts?* Why was the federal government subsidizing mohair?* NPR made the federal workforce older. Was that bad?* What doesn't Elon understand about the federal government?You can find the transcript for this conversation at www.statecraft.pub. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

Last week, we talked to Stephanie Pollack about salvaging a transit project in danger of failure — it was the first in a set of interviews we're running on transit. Today, we're zooming out further, and looking at how the federal government funds local transit.Peter Rogoff spent 22 years as a staffer on the most powerful Senate committee, the Appropriations Committee (on the Democratic side). “Approps” determines discretionary spending for agencies, and for most of his time there, Rogoff was the most senior Dem staffer.Rogoff worked on three transportation reauthorization bills (in ‘95, ‘98, and ‘05), the bills that determine how money will be distributed to transit agencies across the country. In 2008, Rogoff was a key player in introducing the idea of making new funding available to “multi-modal” transportation projects — projects that benefit multiple types of transportation. The next transportation reauthorization process is coming up in 2026, and I thought it'd be valuable to better understand how that bill comes together.But Rogoff doesn't just have experience budgeting: the following year, Rogoff was appointed as head of the Federal Transit Administration (FTA), where he served for five years. More recently, he's been the CEO of Sound Transit, the Seattle transit agency.I didn't agree with Peter on everything in this conversation (which was recorded in February), and he's taken his fair share of criticism, but it's hard to find a figure in American life who has spent more time thinking about federal transit policy.We discussed:* What does the FTA do?* Why don't transit agencies control their spending?* How do you win Senate funding fights?* Why are streetcars terrible?The full transcript is available at www.statecraft.pub. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

This conversation, with transit guru Stephanie Pollack, is one of my favorite conversations we've recorded on here. For one, I had a blast recording — Stephanie's funny, and she's got a killer Boston accent. For another, she explains some of the ideas I care about incredibly well — how well-intentioned regulations turn bad, how political pressures make simple things hard to pull off, why building in the real world is so hard. She taught me a huge amount about building transit. And she's a great storyteller.For context, Pollack was the deputy administrator of the Federal Highway Administration for the first half of the Biden admin. Before that, she served as the secretary of the Massachusetts Department of Transportation (DOT). And a while before that, before she was in the business of building stuff, she was an environmental activist who sued the the Massachusetts DOT for building stuff. We get into that evolution in her career here.This conversation is one of a series of conversations over the coming months about transit: why it's gotten so hard to build, who fights over it, and what it takes to build something people love.We discuss:(00:00) Introduction (00:54) Federal vs. State Transit Funding Structure (02:58) Transit vs. Highway Agency Operational Differences (04:58) Stephanie's Career and Perspective Changes(10:39) The Massachusetts Big Dig Project (11:34) Cost Overruns and Project Estimates (17:04) Inflation in Infrastructure Projects(18:28) The Four Ps of Project Delays (23:50) NEPA and Environmental Review(34:19) The Green Line Extension Project (43:39) Project Redesign and Procurement Innovation(58:20) Advice for Secretary DuffyThanks to Sofia Scarlat and Emma Hilbert for their audio and transcript edits. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

 At the end of January, the Trump administration pushed out a top Treasury department official after he refused to give DOGE access to the government's vast payment system. We're talking to him today. It's one of his first public interviews since leaving the civil service.David Lebryk was the highest ranking civil servant in the Treasury Department, and one of the most senior civil servants in the federal government. He was responsible for overseeing the Bureau of the Fiscal Service, which. Puts out more than 90% of federal payments every year, more than a billion transactions, more than $5 trillion.One note for listeners: Lebryk did not want to go into the blow by blow of his leaving the administration early this year. Instead, we talk about a bunch of other things that I think you'll find highly relevant, how the Bureau of the Fiscal Service works, how it should work, and why Lebryk thinks DOGE's plans for it won't work out the way they intend. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

Today we talked to Alex Jutca; he leads analytics and technology at the Allegheny County Department of Human Services, where his team's mission is to build the country's leading R&D lab for local government. Allegheny County is known for having the best integrated data of any state and local system in the country, and they've applied it effectively, like using predictive algorithms in child welfare.We discussed:* What issues are consistent across Pittsburgh, Philly, and Baltimore?* How does a local CPS actually work?* When shouldn't you involuntarily commit people with severe mental disorders?* Why has anti-addiction drug development stalled out? This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

Today's guest is Narayan Subramanian. Under the Biden administration, he was a legal advisor, and then an advisor to the Secretary at the Department of Energy (DOE). Later, he was the Director for Energy Transition at the White House National Security Council.We've talked to previous guests about how to ensure government money flows fast and effectively. At the DOE, Subramanian helped ensure that a big influx of money could best be used to support innovative energy projects. If you've followed Statecraft a while, you know we're very interested in how to actually deploy taxpayer dollars most effectively. Narayan played a key role in making sure that DOE could do just that.We Discuss:* How the DOE took its modern form* Why don't tools for funding R&D work for funding deployment?* Does the federal interest in IP stop banks from supporting new tech?* What kinds of technologies can you support with “other transactions authority”?The full transcript is available at www.statecraft.pub. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

Today's guest is Peter Moskos, a professor at John Jay College of Criminal Justice. He spent two years as a police officer in Baltimore. I asked him to come on and talk about his new book, Back from the Brink, Inside the NYPD and New York City's Extraordinary 1990s Crime Drop. It's one of my favorite books I've read this year (and it was one of my three book recommendations on Ezra Klein's show last week).Peter spoke with hundreds of police officers and NYC officials to understand and describe exactly how the city's leaders in the early 1990s managed to drive down crime so successfully.We discussed:* How bad did things get in the 1970s?* Why did processing an arrest take so long?* What did Bill Bratton and other key leaders do differently?* How did police get rid of the squeegee men?I've included my reading list at the bottom of this piece. Thanks to Harry Fletcher-Wood for his judicious transcript edits.Subscribe for one new interview a week.Peter, how would you describe yourself?I would say I'm a criminologist: my background is sociology, but I am not in the sociology department. I'm not so big on theory, and sociology has a lot of theory. I was a grad student at Harvard in sociology and worked as a police officer [in Baltimore] and that became my dissertation and first book, Cop in the Hood. I've somewhat banked my career on those 20 months in the police department.Not a lot of sociologists spend a couple of years working a police beat.It's generally frowned upon, both for methodological reasons and issues of bias. But there is also an ideological opposition in a lot of academia to policing. It's seen as going to the dark side and something to be condemned, not understood.Sociologists said crime can't go down unless we fix society first. It's caused by poverty, racism, unemployment, and social and economic factors — they're called the root causes. But they don't seem to have a great impact on crime, as important as they are. When I'm in grad school, murders dropped 30-40% in New York City. At the same time, Mayor Giuliani is slashing social spending, and poverty is increasing. The whole academic field is just wrong. I thought it an interesting field to get into.We're going to talk about your new book, which is called Back from the Brink, Inside the NYPD and New York City's Extraordinary 1990s Crime Drop. I had a blast reading it. Tell me about the process of writing it.A lot of this is oral history, basically. But supposedly people don't like buying books that are called oral histories. It is told entirely from the perspective of police officers who were on the job at the time. I would not pretend I talked to everyone, because there were 30,000+ cops around, but I spoke to many cops and to all the major players involved in the 1990s crime drop in New York City.I was born in the ‘90s, and I had no idea about a crazy statistic you cite: 25% of the entire national crime decline was attributable to New York City's crime decline.In one year, yeah. One of the things people say to diminish the role of policing is that the crime drop happened everywhere — and it did end up happening almost everywhere. But I think that is partly because what happened in New York City was a lot of hard work, but it wasn't that complicated. It was very easy to propagate, and people came to New York to find out what was going on. You could see results, literally in a matter of months.It happened first in New York City. Really, it happened first in the subways and that's interesting, because if crime goes down in the subways [which, at the time, fell under the separate New York City Transit Police] and not in the rest of the city, you say, “What is going on in the subways that is unique?” It was the exact same strategies and leadership that later transformed the NYPD [New York Police Department].Set the scene: What was the state of crime and disorder in New York in the ‘70s and into the ‘80s?Long story short, it was bad. Crime in New York was a big problem from the late ‘60s up to the mid ‘90s, and the ‘70s is when the people who became the leaders started their careers. So these were defining moments. The city was almost bankrupt in 1975 and laid off 5,000 cops; 3,000 for a long period of time. That was arguably the nadir. It scarred the police department and the city.Eventually, the city got its finances in order and came to the realization that “we've got a big crime problem too.” That crime problem really came to a head with crack cocaine. Robberies peaked in New York City in 1980. There were above 100,000 robberies in 1981, and those are just reported robberies. A lot of people get robbed and just say, “It's not worth it to report,” or, “I'm going to work,” or, “Cops aren't going to do anything.” The number of robberies and car thefts was amazingly high. The trauma, the impact on the city and on urban space, and people's perception of fear, all comes from that. If you're afraid of crime, it's high up on the hierarchy of needs.To some extent, those lessons have been lost or forgotten. Last year there were 16,600 [robberies], which is a huge increase from a few years ago, but we're still talking an 85% reduction compared to the worst years. It supposedly wasn't possible. What I wanted to get into in Back from the Brink was the actual mechanisms of the crime drop. I did about fifty formal interviews and hundreds of informal interviews building the story. By and large, people were telling the same story.In 1975, the city almost goes bankrupt. It's cutting costs everywhere, and it lays off more than 5,000 cops, about 20% of the force, in one day. There's not a new police academy class until 1979, four years later. Talk to me about where the NYPD was at that time.They were retrenched, and the cops were demoralized because “This is how the city treats us?” The actual process of laying off the cops itself was just brutal: they went to work, and were told once they got to work that they were no longer cops. “Give me your badge, give me your gun."The city also was dealing with crime, disorder, and racial unrest. The police department was worried about corruption, which was a legacy of the Knapp Commission [which investigated NYPD corruption] and [Frank] Serpico [a whistleblowing officer]. It's an old police adage, that if you don't work, you can't get in trouble. That became very much the standard way of doing things. Keep your head low, stay out of trouble, and you'll collect your paycheck and go home.You talk about the blackout in 1977, when much of the city lost power and you have widespread looting and arson. 13,000 off-duty cops get called in during the emergency, and only about 5,000 show up, which is a remarkable sign of the state of morale.The person in my book who's talking about that is Louis Anemone. He showed up because his neighbor and friend and partner was there, and he's got to help him. It was very much an in-the-foxholes experience. I contrast that with the more recent blackout, in which the city went and had a big block party instead. That is reflective of the change that happened in the city.In the mid-80s you get the crack cocaine epidemic. Talk to me about how police respond.From a political perspective, that era coincided with David Dinkins as [New York City's first black] mayor. He was universally disliked, to put it mildly, by white and black police officers alike. He was seen as hands off. He was elected in part to improve racial relations in New York City, to mitigate racial strife, but in Crown Heights and Washington Heights, there were riots, and racial relations got worse. He failed at the level he was supposed to be good at. Crime and quality of life were the major issues in that election.Dinkins's approach to the violence is centered around what they called “community policing.” Will you describe how Dinkins and political leaders in the late ‘80s and early ‘90s thought about policing?This is under Ben Ward, the [NYPD] Commissioner at the time. The mayor appoints the police commissioner — and the buck does stop with the mayor — but the mayor is not actively involved in day-to-day operations. That part does go down to the police department.Community policing was seen as an attempt to improve relations between the police and the community. The real goal was to lessen racial strife and unrest between black (and to a lesser extent Hispanic) communities and the NYPD. Going back to the ‘60s, New York had been rocked by continued unrest in neighborhoods like Central Harlem, East New York, and Bushwick. Community policing was seen as saying that police are partly to blame, and we want to improve relations. Some of it was an attempt to get the community more involved in crime fighting.It's tough. It involves a certain rosy view of the community, but that part of the community isn't causing the problems. It avoids the fact there are people who are actively criming and are willing to hurt people who get in their way. Community policing doesn't really address the active criminal element, that is a small part of any community, including high-crime communities.Arrests increased drastically during this era, more than in the ‘90s with broken windows policing. If the idea is to have fewer arrests, it didn't happen in the ‘80s. Some good came out of it, because it did encourage cops to be a bit more active and cops are incentivized by overtime. Arrests were so incredibly time-consuming, which kind of defeated the purpose of community policing. If you made an arrest in that era, there was a good chance you might spend literally 24 hours processing the arrest.Will you describe what goes into that 24 hours?From my experience policing in Baltimore, I knew arrests were time-consuming and paperwork redundant, but I could process a simple arrest in an hour or two. Even a complicated one that involved juveniles and guns and drugs, we're talking six to eight hours.In the ‘80s, Bob Davin, [in the] Transit Police, would say they'd make an arrest, process at the local precinct, search him in front of a desk officer, print him, and then they would have to get a radio car off patrol to drive you down to central booking at 100 Centre Street [New York City Criminal Court]. Then they would fingerprint him. They didn't have the live scan fingerprints machine, it was all ink. It had to be faxed up to Albany and the FBI to see if it hit on any warrant federally and for positive identification of the person. Sometimes it took 12 hours to have the prints come back and the perp would be remanded until that time. Then you'd have to wait for the prosecutor to get their act together and to review all the paperwork. You couldn't consider bail unless the prints came back either positive or negative and then you would have that initial arraignment and the cop could then go home. There are a lot of moving parts, and they moved at a glacial pace.The system often doesn't work 24/7. A lot of this has changed, but some of it was having to wait until 9 am for people to show up to go to work, because it's not a single system. The courts, the jails, and policing all march to their own drummer, and that created a level of inefficiency.So much of the nitty-gritty of what cops actually do is boring, behind-the-scenes stuff: How do we speed up the paperwork? Can we group prisoners together? Can we do some of this at the police station instead of taking it downtown? Is all of this necessary? Can we cooperate with the various prosecutors? There are five different prosecutors in New York City, one for each borough.There's not a great incentive to streamline this. Cops enjoyed the overtime. That's one of the reasons they would make arrests. So during this time, if a cop makes an arrest for drug dealing, that cop is gone and no cop was there to replace him. If it's a minor arrest, there's a good chance in the long run charges will be dropped anyway. And you're taking cops off the street. In that sense, it's lose-lose. But, you have to think, “What's the alternative?”Bob Davin is a fascinating guy. There's a famous picture from 1981 by Martha Cooper of two cops on a subway train. It's graffitied up and they're in their leather jackets and look like cops from the ‘70s. Martha Cooper graciously gave me permission to use the picture, but she said, "You have to indemnify me because I don't have a release form. I don't know who the cops are." I said, "Martha, I do know who the cop is, because he's in my book and he loves the picture.” Bob Davin is the cop on the right.Davin says that things started to get more efficient. They had hub sites in the late ‘80s or ‘90s, so precincts in the north of Manhattan could bring their prisoners there, and you wouldn't have to take a car out of service to go back to Central Booking and deal with traffic. They started collecting prisoners and bringing them en masse on a small school bus, and that would cut into overtime. Then moving to electronic scan fingerprints drastically saves time waiting for those to come back.These improvements were made, but some of them involve collective bargaining with unions, to limit overtime and arrests that are made for the pure purpose of overtime. You want cops making arrests for the right reason and not simply to make money. But boy, there was a lot of money made in arrests.In 1991, you have the infamous Crown Heights riot in Brooklyn. Racial tensions kick off. It's a nightmare for the mayor, there's this sense that he has lost control. The following year, you have this infamous police protest at City Hall where it becomes clear the relationship between the cops and the mayor has totally evaporated. How does all that play into the mayoral race between Dinkins and Giuliani?It was unintentional, but a lot of the blame for Crown Heights falls on the police department. The part of the story that is better known is that there was a procession for a Hasidic rabbi that was led by a police car. He would go to his wife's grave, and he got a little three-car motorcade. At some point, the police look at this and go "Why are we doing this? We're going to change it." The man who made the deal said ‘I"m retiring in a couple weeks, can we just leave it till then? Because I gave him my word." They're like, "Alright, whatever."This motor car procession is then involved in a car crash, and a young child named Gavin Cato is killed, and another girl is severely injured. The volunteer, Jewish-run ambulance shows up and decides they don't have the equipment: they call for a professional city ambulance. Once that ambulance is on the way, they take the mildly-injured Jewish people to the hospital. The rumor starts that the Jewish ambulance abandoned the black children to die.This isn't the first incident. There's long been strife over property and who the landlord is. But this was the spark that set off riots. A young Jewish man was randomly attacked on the street and was killed.As an aside, he also shouldn't have died, but at the hospital they missed internal bleeding.Meanwhile, the police department has no real leadership at the time. One chief is going to retire, another is on vacation, a third doesn't know what he's doing, and basically everyone is afraid to do anything. So police do nothing. They pull back, and you have three days of very anti-Semitic riots. Crowds chanting "Kill the Jews" and marching on the Lubavitch Hasidic Headquarters. Al Sharpton shows up. The riots are blamed on Dinkins, which is partly fair, but a lot of that's on the NYPD. Finally, the mayor and the police commissioner go to see what's going on and they get attacked. It's the only time in New York City history that there's ever been an emergency call from the police commissioner's car. People are throwing rocks at it.It took three days to realise this, but that's when they say “We have to do something here,” and they gather a group of officers who later become many of Bratton's main chiefs at the time [Bill Bratton was Commissioner of the NYPD from 1994-1996, under Giuliani]: Mike Julian, Louis Anemone, Ray Kelly, and [John] Timoney. They end the unrest in a day. They allow people to march, they get the police department to set rules. It still goes on for a bit, but no one gets hurt after that, and that's it.It was a huge, national story at the time, but a lot of the details were not covered. Reporters were taken from their car and beaten and stripped. The significance was downplayed at the time, especially by the New York Times, I would say.That's followed by the Washington Heights riots, which is a different story. A drug dealer was shot and killed by cops. There were rumors, which were proven to be false, that he was executed and unarmed. Then there were three days of rioting there. It wasn't quite as severe, but 53 cops were hurt, 120 stores were set on fire, and Mayor Dinkins paid for the victim's family to go to the Dominican Republic for the funeral. The police perspective again was, “You're picking the wrong side here.”Then there's the so-called Police Riot at City Hall. Nominally, it was about the CCRB, the Civilian Complaint Review Board, and setting up an accountability mechanism to control cops. But really it was just an anti-Dinkins protest. It was drunken and unruly. The cops stormed the steps of City Hall. I have the account of one of the cops who was on the top of those steps looking at this mob of cops storming to him, and he's getting worried he's going to be killed in a crush. There were racist chants from off-duty cops in the crowd. It did not reflect well on police officers. But it showed this hatred of David Dinkins, who was seen as siding with criminals and being anti-police. The irony is that Dinkins is the one who ends up hiring all the cops that Giuliani gets credit for.In the “Safe Streets, Safe City” program?Yes. That was because a white tourist, Brian Watkins, was killed in a subway station protecting his parents who were getting robbed. That led to the famous headline [in the New York Post] of “Dave, do something! Crime-ravaged city cries out for help.” He, with City Council President Peter Vallone, Sr., drafted and pushed through this massive hiring of police officers, “Safe Streets, Safe City.”The hiring wasn't fast-tracked. It might be because Dinkins's people didn't really want more cops. But it was a Dinkins push that got a massive hiring of cops. When the first huge class of police officers graduated, Bill Bratton was there and not David Dinkins.Some interviewees in your book talk about how there's physically not enough room in the police academies at this time, so they have to run classes 24/7. You cycle cohorts in and out of the same classroom, because there are too many new cops for the facilities.You have thousands of cops going through it at once. Everyone describes it as quite a chaotic scene. But it would have been hard to do what the NYPD did without those cops. Ray Kelly, who was police commissioner under Dinkins at the end [from 1992 to 1994] before he became police commissioner for 12 years under Bloomberg [from 2002 to 2013] probably could have done something with those cops too, but he never had the chance, because the mayoral leadership at the time was much more limiting in what they wanted cops to do.Crime starts declining slowly in the first few years of the ‘90s under Dinkins, and then in ‘93 Giuliani wins a squeaker of a mayoral election against Dinkins.One of the major issues was the then-notorious “squeegee men” of New York City. These were guys who would go to cars stopped at bridges and tunnel entrances and would rub a squeegee over the windshield asking for money. It was unpleasant, intimidating, and unwanted, and it was seen as one of those things that were just inevitable. Like graffiti on the subway in the ‘80s. Nothing we can do about it because these poor people don't have jobs or housing or whatever.The irony is that Bratton and Giuliani were happy to take credit for that, and it was an issue in the mayoral campaign, but it was solved under David Dinkins and Ray Kelly and Mike Julian with the help of George Kelling [who, with James Wilson, came up with broken windows theory]. But they never got credit for it. One wonders if, had they done that just a few months earlier, it would have shifted the entire campaign and we'd have a different course of history in New York City.It's a great example of a couple of things that several people in your book talk about. One is that disorder is often caused by a very small set of individuals. There's only like 70 squeegee men, yet everybody sees them, because they're posted up at the main tunnel and bridge entrances to Manhattan. And getting them off the streets solves the problem entirely.Another emphasis in the book is how perceptions of crime are central. You quote Jack Maple, the father of Compstat, as saying, “A murder on the subway counts as a multiple murder up on the street, because everybody feels like that's their subway.” The particular locations of crimes really affect public perception.Absolutely. Perception is reality for a lot of these things, because most people aren't victimized by crime. But when people perceive that no one is in control they feel less safe. It's not that this perception is false, it just might not be directly related to an actual criminal act.The other thing I try to show is that it's not just saying, “We've got to get rid of squeegee men. How do you do it?” They had tried before, but this is why you need smart cops and good leadership, because it's a problem-solving technique, and the way to get rid of graffiti is different to the way you get rid of squeegee men.This book is in opposition to those who just say, “We can't police our way out of this problem.” No, we can. We can't police our way out of every problem. But if you define the problem as, we don't want people at intersections with squeegees, of course we can police our way out of the problem, using legal constitutional tools. You need the political will. And then the hard work starts, because you have to figure out how to actually do it.Will you describe how they tackle the squeegee men problem?Mike Julian was behind it. They hired George Kelling, who's known for broken windows. They said, “These people are here to make money. So to just go there and make a few arrests isn't going to solve the problem.” First of all, he had to figure out what legal authority [to use], and he used Traffic Reg 44 [which prohibits pedestrians from soliciting vehicle occupants]. He talked to Norm Siegel of the NYCLU [New York Civil Liberties Union] about this, who did not want this crackdown to happen. But Norman said, “Okay, this is the law, I can't fight that one. You're doing it legally. It's all in the books.” And So that took away that opposition.But the relentless part of it is key. First they filmed people. Then, when it came to enforcement, they warned people. Then they cited people, and anybody that was left they arrested. They did not have to arrest many people, because the key is they did this every four hours. It was that that changed behavior, because even a simple arrest isn't going to necessarily deter someone if it's a productive way to make money. But being out there every four hours for a couple of weeks or months was enough to get people to do something else. What that something else is, we still don't know, but we solved the squeegee problem.So in 93, Giuliani is elected by something like 50,000 votes overall. Just as an aside, in Prince of the City, Fred Siegel describes something I had no idea about. There's a Puerto Rican Democratic Councilman who flips and supports Giuliani. Mayor Eric Adams, who at the time was the head of a nonprofit for black men in law enforcement, calls him a race traitor for doing that and for being married to a white woman. There was a remarkable level of racial vitriol in that race that I totally missed.10 years ago when I started this, I asked if I could interview then-Brooklyn borough president Eric Adams, and he said yes, and the interview kept getting rescheduled, and I said, “Eh, I don't need him.” It's a regret of mine. I should have pursued that, but coulda, woulda, shoulda.Giuliani is elected, and he campaigns very explicitly on a reducing crime and disorder platform. And he hires Bill Bratton. Tell me about Bratton coming on board as NYPD commissioner.Bratton grew up in Boston, was a police officer there, became head of the New York City Transit Police when that was a separate police department. Right before he becomes NYPD Commissioner, he's back in Boston, as the Chief of Police there, and there is a movement among certain people to get Bratton the NYC job. They succeed in that, and Bratton is a very confident man. He very much took a broken windows approach and said, “We are going to focus on crime.” He has a right-hand man by the name of Jack Maple who he knows from the Transit Police. Maple is just a lieutenant in transit, and Bratton makes him the de facto number two man in the police department.Jack Maple passed away in 2001 and I didn't know what I was going to do, because it's hard to interview a man who's no longer alive. Chris Mitchell co-wrote Jack Maple's autobiography called Crime Fighter and he graciously gave me all the micro-cassettes of the original interviews he conducted with Maple around 1998. Everyone has a Jack Maple story. He's probably the most important character in Back from the Brink.Jack Maple comes in, no one really knows who he is, no one respects him because he was just a lieutenant in Transit. He goes around and asks a basic question — this is 1994 — he says, “How many people were shot in New York City in 1993?” And nobody knows. That is the state of crime-fighting in New York City before this era. There might have been 7,000 people shot in New York City in 1990 and we just don't know, even to this day.One citation from your book: in 1993, an average of 16 people were shot every day. Which is just remarkable.And remember, shootings have been declining for two or three years before that! But nobody knew, because they weren't keeping track of shootings, because it's not one of the FBI Uniform Crime Report [which tracks crime data nationally] index crimes. But wouldn't you be curious? It took Jack Maple to be curious, so he made people count, and it was findable, but you had to go through every aggravated assault and see if a gun was involved. You had to go through every murder from the previous year and see if it was a shooting. He did this. So we only have shooting data in New York City going back to 1993. It's just a simple process of caring.The super-short version of Back from the Brink is it was a change in mission statement: “We're going to care about crime.” Because they hadn't before. They cared about corruption, racial unrest, brutality, and scandal. They cared about the clearance rate for robbery a bit. You were supposed to make three arrests for every ten robberies. It didn't matter so much that you were stopping a pattern or arresting the right person, as long as you had three arrests for every ten reported crimes, that was fine.This is a story about people who cared. They're from this city — Bratton wasn't, but most of the rest are. They understood the trauma of violence and the fact that people with families were afraid to go outside, and nobody in the power structure seemed to care. So they made the NYPD care about this. Suddenly, the mid-level police executives, the precinct commanders, had to care. and the meetings weren't about keeping overtime down, instead they were about ”What are you doing to stop this shooting?”Tell listeners a little bit more about Jack Maple, because he's a remarkable character, and folks may not know what a kook he was.I think he was a little less kooky than he liked to present. His public persona was wearing a snazzy cat and spats and dressing like a fictional cartoon detective from his own mind, but he's a working-class guy from Queens who becomes a transit cop.When Bratton takes over, he writes a letter up the chain of command saying this is what we should do. Bratton read it and said, “This guy is smart.” Listening to 80 hours of Jack Maple, everyone correctly says he was a smart guy, but he had a very working-class demeanor and took to the elite lifestyle. He loved hanging out and getting fancy drinks at the Plaza Hotel. He was the idea man of the NYPD. Everyone has a Jack Maple imitation. “You're talking to the Jackster,” he'd say. He had smart people working under him who were supportive of this. But it was very much trying to figure out as they went along, because the city doesn't stop nor does it sleep.He was a bulls***er, but he's the one who came up with the basic outline of the strategy of crime reduction in New York City. He famously wrote it on a napkin at Elaine's, and it said, “First, we need to gather accurate and timely intelligence.” And that was, in essence, CompStat. “Then, we need to deploy our cops to where they need to be.” That was a big thing. He found out that cops weren't working: specialized units weren't working weekends and nights when the actual crime was happening. They had their excuses, but basically they wanted a cushy schedule. He changed that. Then, of course, you have to figure out what you're doing, what the effective tactics are. Then, constant follow up and assessment.You can't give up. You can't say “Problem solved.” A lot of people say it wasn't so much if your plan didn't work, you just needed a Plan B. It was the idea that throwing your hands in the air and saying, “What are you going to do?” that became notoriously unacceptable under Chief Anemone's stern demeanor at CompStat. These were not pleasant meetings. Those are the meetings that both propagated policies that work and held officers accountable. There was some humiliation going on, so CompStat was feared.Lots of folks hear CompStat and think about better tracking of crime locations and incidents. But as you flesh out, the meat on the bones of CompStat was this relentless follow-up. You'd have these weekly meetings early in the morning with all the precinct heads. There were relentless asks from the bosses, “What's going on in your district or in your precinct? Can you explain why this is happening? What are you doing to get these numbers down?” And follow-ups the following week or month. It was constant.CompStat is often thought of as high-tech computer stuff. It wasn't. There was nothing that couldn't have been done with old overhead projectors. It's just that no one had done it before. Billy Gorta says it's a glorified accountability system at a time when nobody knew anything about computers. Everyone now has access to crime maps on a computer. It was about actually gathering accurate, timely data.Bratton was very concerned that these numbers had to be right. It was getting everyone in the same room and saying, “This is what our focus is going to be now.” And getting people to care about crime victims, especially when those crime victims might be unsympathetic because of their demeanor, criminal activity, or a long arrest record. “We're going to care about every shooting, we're going to care about every murder.”Part of it was cracking down on illegal guns. There were hundreds of tactics. The federal prosecutors also played a key role. It was getting this cooperation. Once it started working and Giuliani made it a major part of claiming success as mayor, suddenly everyone wanted to be part of this, and you had other city agencies trying to figure it out. So it was a very positive feedback loop, once it was seen as a success.When Bratton came on the job, he said, “I'm going to bring down crime 15%.” No police commissioner had ever said that before. In the history of policing before 1994, no police commissioner ever promised a double-digit reduction in crime or even talked about it. People said “That's crazy.” It was done, and then year after year. That's the type of confidence that they had. They were surprised it worked as well as it did, but they all had the sense that there's a new captain on this ship, and we're trying new things. It was an age of ideas and experiment.And it was a very short time.That's the other thing that surprised me. Giuliani fired Bratton in the middle of ‘96.It's remarkable. Bratton comes in ‘94, and August 1994 is where you see crime drop off a cliff. You have this massive beginning of the reduction that continues.That inflection point is important for historical knowledge. I don't address alternatives that other people have proposed [to explain the fall in crime] — For example, the reduction in lead [in gasoline, paint, and water pipes] or legalized abortion with Roe v. Wade [proposed by Stephen Dubner].Reasonable people can differ. Back from the Brink focuses on the police part of the equation. Today, almost nobody, except for a few academics, says that police had nothing to do with the crime drop. That August inflection is key, because there is nothing in a lagged time analysis going back 20 years that is going to say that is the magic month where things happened. Yet if you look at what happened in CompStat, that's the month they started getting individual officer data, and noticing that most cops made zero arrests, and said, “Let's get them in the game as well.” And that seemed to be the key; that's when crime fell off the table. The meetings started in April, I believe, but August is really when the massive crime drop began.To your point about the confidence that crime could be driven down double digits year over year, there's a great quote you have from Jack Maple, where he says to a fellow cop, “This is going to be like shooting fish in a barrel. As long as we have absolute control, we can absolutely drive this number into the floor.”One detail I enjoyed was that Jack Maple, when he was a transit cop, would camp out under a big refrigerator box with little holes cut out for eyes and sit on the subway platform waiting for crooks.For people who are interested in Jack Maple, it is worth reading his autobiography, Crime Fighter. Mike Daly wrote New York's Finest, which uses the same tapes that I had access to, and he is much more focused on that. He's actually the godfather of Jack Maple's son, who is currently a New York City police officer. But Maple and co were confident, and it turned out they were right.As well as having changes in tactics and approach and accountability across the NYPD, you also have a series of specific location cleanups. You have a specific initiative focused on the Port Authority, which is a cesspool at the time, an initiative in Times Square, the Bryant Park cleanup, and then Giuliani also focuses on organized crime on the Fulton Fish Market, and this open-air market in Harlem.I was struck that there was both this general accountability push in the NYPD through CompStat, and a relentless focus on cleaning up individual places that were hubs of disorder.I'm not certain the crime drop would have happened without reclamation of public spaces and business improvement districts. Bryant Park's a fascinating story because Dan Biederman, who heads the Corporation, said, “People just thought it was like a lost cause, this park can't be saved. The city is in a spiral of decline.” He uses Jane Jacobs' “eyes on the street” theory and then George Kelling and James Q. Wilson's broken windows theory. The park has money — not city money, but from local property owners — and it reopens in 1991 to great acclaim and is still a fabulous place to be. It showed for the first time that public space was worth saving and could be saved. New York City at the time needed that lesson. It's interesting that today, Bryant Park has no permanent police presence and less crime. Back in the ‘80s, Bryant Park had an active police presence and a lot more crime.The first class I ever taught when I started at John Jay College in 2004, I was talking about broken windows. A student in the class named Jeff Marshall, who is in my book, told me about Operation Alternatives at the Port Authority. He had been a Port Authority police officer at the time, and I had not heard of this. People are just unaware of this part of history. It very much has lessons for today, because in policing often there's nothing new under the sun. It's just repackaged, dusted off, and done again. The issue was, how do we make the Port Authority safe for passengers? How do we both help and get rid of people living in the bus terminal? It's a semi-public space, so it makes it difficult. There was a social services element about it, that was Operational Alternatives. A lot of people took advantage of that and got help. But the flip side was, you don't have to take services, but you can't stay here.I interviewed the manager of the bus terminal. He was so proud of what he did. He's a bureaucrat, a high-ranking one, but a port authority manager. He came from the George Washington Bridge, which he loved. And he wonders, what the hell am I going to do with this bus terminal? But the Port Authority cared, because they're a huge organization and that's the only thing with their name on it — They also control JFK Airport and bridges and tunnels and all the airports, but people call the bus terminal Port Authority.They gave him almost unlimited money and power and said, “Fix it please, do what you've got to do,” and he did. It was environmental design, giving police overtime so they'd be part of this, a big part of it was having a social service element so it wasn't just kicking people out with nowhere to go.Some of it was also setting up rules. This also helped Bratton in the subway, because this happened at the same time. The court ruled that you can enforce certain rules in the semi-public spaces. It was not clear until this moment whether it was constitutional or not. To be specific, you have a constitutional right to beg on the street, but you do not have a constitutional right to beg on the subway. That came down to a court decision. Had that not happened, I don't know if in the long run the crime drop would have happened.That court decision comes down to the specific point that it's not a free-speech right on the subway to panhandle, because people can't leave, because you've got them trapped in that space.You can't cross the street to get away from it. But it also recognized that it wasn't pure begging, that there was a gray area between aggressive begging and extortion and robbery.You note that in the early 1990s, one-third of subway commuters said they consciously avoided certain stations because of safety, and two thirds felt coerced to give money by aggressive panhandling.The folks in your book talk a lot about the 80/20 rule applying all over the place. That something like 20% of the people you catch are committing 80% of the crimes.There's a similar dynamic that you talk about on the subways, both in the book and in your commentary over the past couple years about disorder in New York. You say approximately 2,000 people with serious mental illness are at risk for street homelessness, and these people cycle through the cities, streets, subways, jails, and hospitals.What lessons from the ‘90s can be applied today for both helping those people and stopping them being a threat to others?Before the ‘80s and Reagan budget cuts there had been a psychiatric system that could help people. That largely got defunded. [Deinstitutionalization began in New York State earlier, in the 1960s.] We did not solve the problem of mental health or homelessness in the ‘90s, but we solved the problem of behavior. George Kelling [of broken windows theory] emphasized this repeatedly, and people would ignore it. We are not criminalizing homelessness or poverty. We're focusing on behavior that we are trying to change. People who willfully ignore that distinction almost assume that poor people are naturally disorderly or criminal, or that all homeless people are twitching and threatening other people. Even people with mental illness can behave in a public space.Times have changed a bit. I think there are different drugs now that make things arguably a bit worse. I am not a mental health expert, but we do need more involuntary commitment, not just for our sake, but for theirs, people who need help. I pass people daily, often the same person, basically decomposing on a subway stop in the cold. They are offered help by social services, and they say no. They should not be allowed to make that choice because they're literally dying on the street in front of us. Basic humanity demands that we be a little more aggressive in forcing people who are not making rational decisions, because now you have to be an imminent threat to yourself or others. That standard does need to change. But there also need to be mental health beds available for people in this condition.I don't know what the solution is to homelessness or mental health. But I do know the solution to public disorder on the subway and that's, regardless of your mental state or housing status, enforcing legal, constitutional rules, policing behavior. It does not involve locking everybody up. It involves drawing the line between acceptable and unacceptable behavior. It's amazing how much people will comply with those rules.That presents the idea that someone's in charge, it's not a free-for-all. You get that virtuous loop, which New York had achieved in 2014–2016, when crime was at an all-time low in the city. Then the politicians decided public order wasn't worth preserving anymore. These are political choices.I had a similar version of this conversation with a friend who was shocked that there were zero murders on the subway in 2017 and that that number was stable: you had one or two a year for several years in the mid-2010s.It was five or fewer a year from 1997 to 2019, and often one or two. Then you have zero in 2017. There were [ten in 2022]. It coincides perfectly with an order from [Mayor] de Blasio's office and the homeless czar [Director of Homeless Services Steven] Banks [which] told police to stop enforcing subway rules against loitering. The subways became — once again — a de facto homeless shelter. Getting rule-violating homeless people out of the subway in the late ‘80s was such a difficult and major accomplishment at the time, and to be fair it's not as bad as it was.The alternative was that homeless outreach was supposed to offer people services. When they decline, which 95% of people do, you're to leave them be. I would argue again, I don't think that's a more humane stance to take. But it's not just about them, it's about subway riders.There's one story that I think was relevant for you to tell. You were attacked this fall on a subway platform by a guy threatening to kill you. It turns out he's had a number of run-ins with the criminal justice system. Can you tell us where that guy is now?I believe he's in prison now. The only reason I know who it is is because I said, one day I'm going to see his picture in the New York Post because he's going to hurt somebody. Am I 100 percent certain it's Michael Blount who attacked me? No, but I'm willing to call him out by name because I believe it is. He was out of prison for raping a child, and he slashed his ex-girlfriend and pushed her on the subway tracks. And then was on the lam for a while. I look at him and the shape of his face, his height, age, build, complexion, and I go, that's got to be him.I wasn't hurt, but he gave me a sucker punch trying to knock me out and then chased me a bit threatening to kill me, and I believe he wanted to. It's the only time I ever was confronted by a person who I really believe wanted to kill me, and this includes policing in the Eastern District in Baltimore. It was an attempted misdemeanor assault in the long run. But I knew it wasn't about me. It was him. I assume he's going to stay in prison longer for what he did to his ex-girlfriend. But I never thought it would happen to me. I was lucky the punch didn't connect.Peter Moskos's new book is Back from the Brink, Inside the NYPD and New York City's Extraordinary 1990s Crime Drop.My reading listEssays:Johnny Hirschauer's reporting, including “A Failed 'Solution' to 'America's Mental Health Crisis',“ “Return to the Roots,” and “The Last Institutions.” “Broken Windows: The Police and Neighborhood Safety,” by George L. Kelling and James Q. Wilson. ​“It's Time to Talk About America's Disorder Problem,” Charles Lehman.Books:Ghettoside: A True Story of Murder in America, Jill Leovy.​Prince of the City: Giuliani, New York, and the Genius of American Life, Fred Siegel.​ Cop in the Hood: My Year Policing Baltimore's Eastern District, Peter Moskos.​Dreamland: The True Tale of America's Opiate Epidemic, Sam Quinones.​Bonfire of the Vanities, Tom Wolfe. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

DOGE is the most interesting story in state capacity right now. Yet although we've talked around it on Statecraft, I haven't covered it directly since the beginning of the administration. In part, that's because of the whirlwind pace of news, but also because of the sense I get in talking to other DOGE watchers, that we're like blind men feeling different parts of the elephant. And, frankly, because it's the most polarizing issue in public discourse right now.But we're far enough into the administration that some things are clear, and I think it's relevant for Statecraft readers to hear how I'm personally modeling DOGE. We're also far enough along that it's worth taking stock of what we expected and forecasted about DOGE, and where we were wrong. So here are 50 thoughts on DOGE, as concisely as possible. You can read the full thing, as always, at www.statecraft.pub. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

Today's guest is John Lechner, a writer and researcher. He's here today to talk about his new book about the Wagner Group, a Russian state-funded private military group, or PMC. The book is called Death Is Our Business: Russian Mercenaries and the New Era of Private Warfare, and is out March 4th (you can preorder it here). It's a crazy read, and draws on multiple trips John took to frontlines in Ukraine, Syria, Libya, the Central African Republic, and Mali. As a mutual friend told me, “John knows more about the Wagner Group than anyone not in the Wagner Group.” I asked John to help me better understand how state capacity works, through the lens of private military companies.Some questions I came into our conversation with:* How does a private military company (PMC) work? What's the bureaucratic structure of a PMC?* How does a successful PMC operate? How does it scale?* How does a state like Russia use a PMC for its own ends (and how do PMCs use states for their own ends)?* How do Russian PMCs like Wagner compare to American PMCs like Blackwater?Read the full transcript of this episode at www.statecraft.pub. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

Friend-of-the-pod Nick Bagley joined us to explain judicial review: why it's not as confusing as it sounds, and why it's at the center of a political firestorm.Bagley is an expert in administrative law who served as special counsel and chief legal counsel to Democratic Michigan Governor Gretchen Whitmer. We've had him on a couple times for conversations on how bureaucracy is breaking government and whether the courts broke environmental review with a recent decision.You can read the full transcript for this conversation and many others at www.statecraft.pub. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

What happened in LA last month? On that, basically everyone agrees: devastating wildfires that killed at least 29 people and cost at least $100 billion.But why did those fires burn so intensely for so long? I had my own view, but I don't follow fires closely. So I talked to Matt Weiner, CEO and founder of Megafire Action.We discuss:* California knows it has a fire problem. Why can't it control it?* Where does mechanical thinning work, and where doesn't it?* What tools from the Department of Defense should we be using in firefighting?* Do we need more money to fight fires?* Why do the country's biggest environmental groups oppose fire mitigation?For the full transcript of this conversation and others, visit www.statecraft.pub. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

Today I'm talking with Jo Freeman: a founding member of the women's liberation movement in the 1960s, a civil rights campaigner, an attendee to every Democratic party convention since 1964, and a political scientist. She's not the most typical Statecraft guest. But her work on how the two parties work - not just what they believe, but how they operate organizationally - is incredibly insightful. In this conversation, we dig into:* Why do the two parties fight so differently?* What makes someone powerful in each party?* How did the women's movement transform the Democratic Party?* What happened to convention caucuses? Did they stop mattering?* What does it mean when a movement starts "trashing" its own leaders?Reading list:Who You Know Versus Who You Represent: Feminist Influence in the Democratic and Republican PartiesThe Political Culture of the Democratic and Republican PartiesWhy Republican Party Leaders Matter More Than Democratic Ones (by Tanner Greer)Trashing: The Dark Side of SisterhoodThe Tyranny of Structurelessness This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

This is the second in a two-part series with my dad, Diego Ruiz. In the first episode, we discussed his time helping run a political campaign in Nicaragua, and later his time staffing California Representative Chris Cox. Today, we jump ahead to his time as executive director of the Securities and Exchange Commission (SEC) during the 2008 financial crisis.In this episode, we discuss:* Why the SEC can't fund itself* What not to say to congressional appropriators* How the SEC missed the Bernie Madoff scandal* Why it's so hard to staff up an agency* What agency rulemaking will look like in the futureRead the full transcript at www.statecraft.pub. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

Today's guest is near and dear to my heart. It's my dad, Diego Ruiz. We recorded this in person, and we both had the same cold, which you may be able to hear. At some point, you may also hear my son in the background, which makes three generations of Ruizes on the podcast.Diego has helped win elections in the US and Central America, served as Executive Director of the Securities and Exchange Commission (SEC), was a senior advisor in the House of Representatives, and was Deputy Chief for Strategy and Policy at the Federal Communications Commission (FCC), managing a multidisciplinary “in-house think tank.”In this episode, we discuss:* How to win a congressional election in Miami* What “burrowing in” to the civil service means* How to win a presidential election in communist Nicaragua* How the Sandinistas used Michael Keaton and Mike Tyson to dampen voter turnout* Why the Base Realignment and Closure Commission may be a model for DOGEYou can find the full transcript at www.statecraft.pub. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

Happy New Year! I went on the American Compass podcast last month to talk to American Compass chief economist Oren Cass about government efficiency, state capacity, and what Trump's Department of Government Efficiency (DOGE) is likely to tackle.We discuss:* Why is it so hard to fire federal employees?* Off-the-wall ways to save government money* The West Coast meets East Coast dynamic in DOGE* The secret to a successful blue ribbon commissionNotes: This interview was originally published here. When used the phrase “fired for cause,” when I should have said “fired for performance.” SMEQA stands for Subject Matter Expert Qualification Assessments. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

Today, we talk to Jennifer Pahlka and Andrew Greenway about their new paper on state capacity. It's called “The How We Need Now: A Capacity Agenda for 2025 and Beyond.”We discuss:What is “state capacity?”Why is there fresh interest in the topic in the UK?How did the model of a “government digital service” spread to the US?How do you fix unemployment insurance? This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

Today, we're diving into everyone's favorite Statecraft topic: administrative law! The two court cases we're discussing could have huge ramifications for how we build things in America.We brought three of our favorite administrative law professors together: James Coleman is a professor at the University of Minnesota, Adam White is the Executive Director of the Gray Center for the Study of the Administrative State at George Mason University, and Nicholas Bagley is a professor at the University of Michigan and was Chief General Counsel to Michigan Governor Gretchen Whitmer.We discussed:* Why the National Environmental Policy Act is a problem* How a small White House office grew to wield power Congress never gave it* Why a seemingly simple environmental case has thrown environmental regulations into doubt* Why D.C. appellate lawyers don't challenge laws they believe are wrong* The potential for reforming environmental review This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

Today's interviewee has been my white whale for a while. Edward Luttwak was born in 1942, and since then he's lived a wilder life than anyone I know. From Chairman Mao's funeral to late nights drinking with Putin, Luttwak's seen it all.Timestamps:(00:00) Introduction(1:30) How to stage a coup in the 21st century(8:21) Why Luttwak is responsible for a global decline in coups(16:57) Iran's real goals in the Middle East(27:30) Why the CIA can't go undercover or recruit talent(41:11) Staffing Reagan's presidential transition team(44:03) Why we need more waste at the Pentagon(57:31) How the war in Ukraine will end(1:03:47) China's great military challenge(1:07:46) Snorkeling in French Polynesia(1:09:48) Working for a Kazakh dictatorFor the full transcript, visit www.statecraft.pub. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

Brief intros: Nicholas Bagley was General Counsel to Governor Gretchen Whitmer. Kathy Stack served almost three decades at the Office of Management and Budget (OMB). Jenny Mattingley also served at the OMB, focusing on hiring reform and workforce efforts.Timestamps:(00:00) Introduction(04:42) “I think all three of you have something to say about the Paperwork Reduction Act.”(12:38) A one-way ratchet(22:16) How to get a new form approved(32:04) Why is there no natural constituency to improve this?(42:14) Inheriting judicial review from the Civil Rights era(59:13) What should be on the new administration's agenda? This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

I've been trying to get a conversation with today's interviewee, Eric Van Gieson, PhD, since March. Van Gieson is a remarkable character, with a crazy CV: more than 25 years of experience in developing medical technology, and stints at multiple federal agencies including DARPA.A lot of people have spilled a lot of ink discussing what went wrong during COVID, but I think what Van Gieson lays out here is close to a comprehensive account of the reasons we blew it, and how not to blow it in the future.We discuss:* Why is the federal “pandemic preparedness” apparatus so sprawling?* Why haven't we learned from COVID mistakes, or even run reviews on what went wrong?* How would you revamp the federal apparatus to be ready for the next pandemic?* We don't test whether generic drugs can fight pathogens. Why not??* How did Van Gieson and colleagues ship a flying Ebola hospital in 6 weeks?* How can we make sure DARPA-developed biotech doesn't end up in the hands of adversaries? This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

Today's interviewee is Chris Anderson. Anderson's a former DoD program manager who served in a unique organization called the US Army Asymmetric Warfare Group (AWG). Anderson is currently the Chief Operating Officer at Troika Solutions, a defense consulting firm based in Virginia.  We discussed:The birth of the Asymmetric Warfare GroupWhy American troops in Afghanistan couldn't strike Taliban operativesWhy the military avoids risky technology, even when it would save livesWhat we've learned about drones from UkraineThe difference between drone use in Ukraine and in the Indo-PacificYou can read the full interview transcript and find sources at www.statecraft.pub. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

I had the distinct pleasure of hosting Trae Stephens and Michael Kratsios on a panel in San Francisco in September on the topic of “Rebuilding the arsenal of democracy.” Trae Stephens is a general partner at Founders Fund and a Co-Founder of Anduril, a defense tech company that specializes in advanced autonomous systems.Michael Kratsios served as Chief Technology Officer of the United States in the Trump White House. He also served as acting undersecretary of defense, where he was responsible for research and engineering efforts at the Defense Department. These days, he's managing director of Scale AI.We discussed:* What's wrong with the defense industrial base?* How can we use tools like the Export-Import Bank to beat China?* Can cutting Chinese tech out of supply chains hurt American companies?* Will we see more tech talent in the next administration?You can subscribe to Statecraft at www.statecraft.pub. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

Today's episode is an interview with a colleague of mine at the Institute for Progress. Ben Jones is an economist who focuses on the sources of economic growth in advanced economies, and he's a Non-Resident Senior Fellow at IFP.We recorded this conversation at the second #EconTwitterIRL Conference last month in Lancaster, PA, which IFP hosted alongside the Economic Innovation Group). The other interview at that conference was excellent too: Cardiff Garcia interviewing Paul Krugman.Jones has served in more than one executive branch role, including as the Senior Economist for Macroeconomics for the White House Council of Economic Advisors (CEA), during the first Obama administration. But what we spent most of our time talking about here was a broader question: What role does federal spending on science play in productivity growth?Timestamps:(00:00) Introduction(2:03) Shadowing Larry Summers at Treasury(3:46) Do national leaders actually affect economic growth?(9:22) Whose job is it in the federal government to think about productivity?(14:12) What market failure is solved by public R&D funding?(19:45) What does the rise of team science mean for young scientists?(32:47) Should we be bearish about the entire scientific enterprise?(51:50) What levers can we pull to increase productivity growth?(43:53) Audience questions This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

Today, we spoke to Dr. Jeffrey Freeman, who directs the National Center for Disaster Medicine and Public Health (NCDMPH). Dr. Freeman leads a team that Congress has tasked with studying something called the National Disaster Medical System, which would coordinate how we treat casualties in the event of a hot war with a peer. Freeman worries that our on-paper system for distributing patients is likely to collapse once the shooting starts, if we don't make serious reforms.Timestamps:* (00:00) Introduction* (00:18) Working with INDOPACOM* (3:55) 1,000 casualties, every day, for 100 days* (11:27) What private sector hospitals can expect* (23:43) Preparing for situations you can't predict* (37:32) What happens when digital systems go down?* (44:19) What's the potential scale of a conflict like this?You can read the full interview transcript at www.statecraft.pub. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

A few months ago, I read a great essay by Sid Jha on the Chevron doctrine.Sid had also written to me, saying he'd love a Statecraft interview about OIRA, the Office of Regulatory Affairs. It's the division of the Office of Management and the Budget that reviews all major regulations from agencies.I thought this was a great idea, and I asked if he'd be interested in co-hosting an episode with me. Here's the result: an interview with John D. Graham, who was the administrator of OIRA under George W. Bush. Timestamps:(00:00) Introduction(00:43) Where OIRA comes from(09:20) How cost-benefit analysis got better(12:59) How OIRA kills regulations(26:51) Which agencies hate OIRA most(34:31) Why command and control regulation persists(39:44) What regulations OIRA focuses on(46:10) John D. Graham vs. Dick Cheney(50:46) Graham and the English First movement This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

This week's interview is a live recording of a panel I hosted three weeks ago at the Bottlenecks Conference in San Francisco, with Sam Hammond and Jen Pahlka. We discussed:(00:00) Introduction(00:39) Do the right and left disagree about state capacity?(7:50) Will AI make the whole state capacity debate obsolete?(11:05) What cues should today's reformers take from the Progressive Era?(14:19) Should Trump use Schedule F?(20:18) Where is there bipartisan agreement on state capacity?(25:29) Why didn't COVID create more governance changes?Brief bios: Hammond is a Senior Economist at the Foundation for American Innovation where he focuses on AI policy. Pahlka is a Senior Fellow at the Niskanen Center and the Federation of American Scientists and the author of Recoding America. We've interviewed her before. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

Today's interviewee, Jonathan Luff, was a British diplomat for more than a decade, and worked on the British bid for the 2018 World Cup in the Prime Minister's office. Timestamps:[00:00] Introduction[00:21] How do you bid for the World Cup?[11:37] Was the UK too naive to win a bid?[20:52] Does British soft power still matter?[23:51] What are the bottlenecks to British economic growth?[31:37] Can Britain do strategic deterrence with limited resources?[36:25] How do British diplomats and American diplomats differ?[48:10] Was Cameron's foreign policy all a mistake?  This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

Today's episode is about how the government procures military equipment. There's a growing Washington consensus that we simply can't buy the weapons we need, in the quantities we need, on the timelines we need.To better understand what's going wrong, we talked to Dr. Arun Seraphin. Seraphin just finished serving as a commissioner on a 14-person “blue ribbon commission” to investigate reforms to the way Congress and the military coordinate to buy things. We got into:How to design a commission to matterWhy the Pentagon's IT doesn't workThe value of porkDirected energy weaponsIs the Asian pivot happening? This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

Today's interviewee, James Phillips, was formerly the science and tech adviser to Prime Minister Boris Johnson. An acclaimed systems neuroscientist, Phillips helped develop the UK's rapid COVID testing and helped create the Advanced Research and Invention Agency (ARIA). We discussed:Dominic Cummings' band of “weirdos and misfits”Red-teaming WestminsterWhy you should always be willing to resignThe problem with the British civil serviceProtecting ARIA from mission creepWhether the UK can end economic stagnation This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

For the anniversary of the newsletter, I talk to Daniel Golliher of maximumnewyork.com about how Statecraft works, what we've learned, and the year ahead. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

Today's interviewee is Matt Lira, who has held a wide range of insider roles on the Hill and White House. Our topic: Why Congress is so technologically weak, and how that can change.We discussed:* Why is Congress so slow to adopt technologies that would significantly ease operations?* How did a Congressman unilaterally introduce live-streaming of Congressional hearings?* Would a Google Docs-style comment system for legislation ever work?* What would Davy Crockett's social media presence be like? This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

Russ Vought served as the director of President Trump's Office of Management and the Budget (OMB). When the OMB under Vought withheld military aid from Ukraine, House Democrats initiated an investigation that ultimately led to Trump's first impeachment.Vought now leads a think tank, the Center for Renewing America, and is reportedly building a “180-day playbook” for implementing a policy agenda for a second Trump term. On Monday, the Associated Press claimed “Vought is likely to be appointed to a high-ranking post in a second Trump administration.”Timestamps:[00:00] Introduction[00:18] How OMB works[06:53] The two approaches to running the executive branch[14:56] Why we have “an imperial Congress”[20:12] The Ukraine impeachment[33:21] Why there aren't more conservatives in government This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

Today, I spoke to Ernie Tedeschi, former Chief Economist at the Council of Economic Advisers (These days he's Director of Economics at The Budget Lab).Timestamps:[00:00]“Fighting the last war” in stimulus packages[00:23] What's driving inflation[11:59] The tools CEA economists have[16:45] The tools CEA economists wish they had[33:50] Are high interest rates driving low consumer sentiment?[38:39] Why men are dropping out of the labor force This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

The Biomedical Advanced Research and Development Authority (BARDA) helped bring Moderna's mRNA vaccine through clinical trials to market. BARDA's Division of Research, Innovation, and Ventures (DRIVe) is its in-house biotech venture capital firm, charged with identifying and incubating technologies for U.S. biodefense and preparedness.Today's interviewee is Dr. Sandeep Patel, the Director of DRIVe from March 2020 to March 2024. Patel helped architect the program's VC-inspired model and led the organization through its COVID response. We covered:(00:00) Introduction(00:20) How cost-effective is BARDA?(09:38) Venture-capitalism in government(26:14) Hiring talent(34:35) Question grab-bag This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

The Strategic Petroleum Reserve is the world's largest emergency supply of crude oil. In huge underground salt caverns along the Gulf of Mexico, the American federal government can store up to 714 million barrels, more than what the country uses in one month. Historically, the SPR has been tapped at the discretion of the president when natural disasters or crises cause the price of oil for consumers to spike.But when Russia invaded Ukraine and oil prices went haywire, Arnab Datta and Skanda Amarnath proposed a novel idea: what if the SPR wasn't just used as a stockpile of a commodity? If it used its ability to acquire oil strategically, could it support American industry and calm oil markets? Today, we talked to both of them.Timestamps:(00:00) Introduction(00:40) How do oil markets work?(02:25) How has the SPR been used historically?(07:42) Why oil investment kept dropping(16:53) Arnab and Skanda's big idea(20:55) Convincing the Biden administration(23:45) "Fixed-price forward contracts"(34:54) Isn't the SPR too small to shape oil markets?(42:10) The SPR pilot buy fails(51:09) A more aggressive approach(58:01) Keeping the political coalition together(01:02:26) The importance of elite media(01:09:43) Did the SPR "beat OPEC"?(01:12:52) Lessons for policy advocates This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

In 1919, President Woodrow Wilson suffered a major stroke. The president, a widower, was kept in solitude by his second wife and a tight ring of advisers. For months, senior executive branch and legislative officials could not see the president. The White House claimed the president would shortly return to full health, and that he suffered only from “nervous exhaustion.” His wife managed the flow of information to him, sharing certain memos and concealing others.We spoke to John Milton Cooper Jr., a historian who has been called "the world's greatest authority on Woodrow Wilson." Cooper is Professor Emeritus at the University of Wisconsin-Madison, and his Woodrow Wilson: A Biography was a Pulitzer Prize finalist.(00:00) Introduction(00:21) How did Wilson's stroke come about?(6:54) The stroke and its immediate coverup(14:08) Psychological changes in President Wilson(18:43) The media coverup(20:31) Wilson and Congress(23:53) Edith Wilson's role(32:04) The Vice President and constitutional questions(37:52) Wilson's advisers(41:38) The Democratic Party This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

In April and May 1979, between 66 and 300 people died from anthrax in the Russian city of Sverdlovsk, now called Yekaterinburg. The Soviet authorities seized doctors' records and quickly rolled out an explanation: the deaths were an accident caused by contaminated meat. But American intelligence agencies suspected a more nefarious explanation: the Soviets were secretly developing biological weapons.Last week, we interviewed Matthew Meselson about his key role in convincing Henry Kissinger and Richard Nixon to ban biological weapons research in the early 1970s. After the Sverdlovsk incident, Meselson was brought in by the CIA to help assess the potential explanations. For more than a decade, he led scientific investigations into the incident. In 1992, after the fall of the Soviet Union, the truth finally came out: the Sverdlovsk incident was a bioweapons lab leak, the most deadly confirmed lab leak in history.Meselson's paper confirming the lab leak is an epidemiological classic. For the first time on Statecraft, we've doubled up on a guest: the 94-year-old Meselson is back for round two.[00:00] The CIA recruits Meselson[5:38] Attempts to travel to Sverdlovsk[9:11] Meselson travels to Moscow[14:15] An invitation to Sverdlovsk[25:27] On-the-ground investigation[34:25] Who knew what, and when did they know it?[40:16] Who is developing chemical weapons today?[45:34] How closely does the Sverdlovsk lab leak parallel incidents in Wuhan?[50:31] Why the Soviets couldn't find their own research facilities This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

In 1969, President Nixon announced the end of all American offensive biological weapons programs, and renounced the first use of chemical weapons. But it wasn't until several months later that Nixon confirmed that the U.S. would end all military research into toxins, which can be created either in nature or in the lab.Nixon chose to end that toxin research because of one man, our interviewee today. Dr. Matthew Meselson is well-known in biology for his Meselson-Stahl experiment, which demonstrated that DNA replicates semiconservatively, and has won myriad awards for his academic work. But his consulting work for federal agencies at several crucial moments in Cold War history may be Dr. Meselson's greatest professional contribution.Dr. Meselson is 94 years old. He graciously agreed to a conversation with Statecraft about one of those moments. The first part of our conversation is published below.What You'll Learn: How do you convince a president in one memo? How did Hungarian lunch ladies help lead to Nixon banning toxins for military use? Why did the Joint Chiefs of Staff want to develop anthrax? Why was Nixon reading Michael Crichton? This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

Most Americans have never heard of the Domestic Policy Council. What is it, and why does it matter? Today, we interviewed Cecilia Muñoz, former Director of the Domestic Policy Council under President Obama. We cover: Why did the Biden presidential transition differ sharply from the Obama transition? How do you stop bureaucrats from slow-walking policies they dislike? What decisions never make their way up to the president?Subscribe at www.statecraft.pub to get a new interview every week.Also, if you like Statecraft, give us a rating or subscribe. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

Today's interviewee, Professor Chris Snyder, is a Non-Resident Senior Fellow at the Institute for Progress (IFP). He teaches economics at Dartmouth College, where he specializes in industrial organization and microeconomic theory. He is also a research associate at the NBER, treasurer of the Industrial Organization Society, and a faculty director for the University of Chicago's Market Shaping Accelerator. Chris played a pivotal role in the advance market commitment, or “AMC,” for the pneumococcal vaccine, which saved close to a million lives. What you'll learn:How did the U.S. and Russia end up in the same funding coalition? Why didn't we design an AMC for malaria? How do you place a market value on future innovations? Why would cancer and Alzheimer's be poor candidates for an AMC?Subscribe at www.statecraft.pub to get one new interview in your inbox each week. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

Today, we talked to Laura Thomas, a former Central Intelligence Agency (CIA) case officer and Chief of Base in Afghanistan. She has served over 17 years in national security and leadership roles. We discuss:How a CIA station operatesWhat kind of intelligence failure was October 7th?The holes in how CIA teaches tradecraftWhy did intelligence agencies predict Kabul would fall quickly to the Taliban?Read the transcript at https://www.statecraft.pub/p/how-to-run-a-cia-base-in-afghanistan This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub

When the Soviet Union fell in 1991, hundreds of tons of nuclear materials were suddenly unsecured. The new, fragile Russian government had no ability or desire to claim facilities in formerly Soviet states, and it could no longer pay nuclear plant workers. Operatives from rogue states offered cash to purchase uranium and higher nuclear physicists. Today we talked to Andy Weber, one of the American operatives who helped lock down dangerous nuclear material from Kazakhstan to Georgia to Moldova.What You'll Learn How did the US secure dangerous nuclear materials? Why didn't the Department of Energy want the US to acquire them? Why shouldn't you bring bourbon to Soviet functionaries? This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub