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The Essential Podcast, Episode 49: Entrepreneurial Leadership — An Interview with Co-Author Robert Litan


The Essential Podcast, Episode 57: A Machine for Manufacturing Courage — Venture Capital and the Power Law


The Essential Podcast, Libsyn Test


The Essential Podcast, Episode 56: The Myth of Growth — Sustainability, Equality, and the Search for a Post-Growth Economy


The Essential Podcast, Episode 55: Investing in Culture — Communication and Retention in Companies

Listen: The Essential Podcast, Episode 49: Entrepreneurial Leadership — An Interview with Co-Author Robert Litan

About this Episode

Robert Litan, Former Director of Economic Studies at the Brookings Institution, joins the Essential Podcast for Part 1 of a four-part series to talk about the report "Entrepreneurial Leadership Must Help Meet America's 21st Century Challenges in a Post-Pandemic World" and how his own work and career shaped his approach to the collaboration. 

The Essential Podcast from S&P Global is dedicated to sharing essential intelligence with those working in and affected by financial markets. Host Nathan Hunt focuses on those issues of immediate importance to global financial markets—macroeconomic trends, the credit cycle, climate risk, ESG, global trade, and more—in interviews with subject matter experts from around the world.

Listen and subscribe to this podcast on Apple PodcastsSpotifyGoogle Podcasts, and Deezer.

Show Notes
  • Listen to Part 2 of this series: Entrepreneurial Leadership – An Interview with Co-Author Ella Bell Smith

  • Listen to Part 3 of this series: Entrepreneurial Leadership – An Interview with Co-Author Matthew Slaughter

  • Listen to Part 4 of this series: Entrepreneurial Leadership – An Interview with Co-Author Robert Lawrence

  • Join S&P Global Sustainable1 for the next episode in our ‘Beyond ESG’ series as we sit down with the authors of the report, ‘Entrepreneurial Leadership Must Help Meet America’s 21st Century Challenges in a Post-Pandemic World’ to examine the challenges facing America and the role state and federal – as well as private industry – leadership must play to meet them. Register here to join the discussion or receive the on-demand replay.

The Essential Podcast is edited and produced by Molly Mintz.

Nathan Hunt: This is The Essential Podcast from S&P Global. My name is Nathan Hunt. Over the past year, I have had the privilege of working with four of the leading economists and academics working in the United States today as they wrestled with the challenges America faces in the coming decades. S&P Global is proud to present the output of their work, an article entitled Entrepreneurial Leadership Must Help Meet America's 21st Century Challenges in a Post-Pandemic World. To accompany this article, I am interviewing all four co-authors. The purpose of these interviews is to understand this article in the light of each author's past published work and career. Today, I have the good fortune to interview Bob Litan of the Brookings Institute.

Bob Litan: Hi, this is Bob Litan and I'm a non-resident senior fellow at Brookings. I'm both an economist and a lawyer. I've been in various positions in both of those capacities over four decades in both the private and the public sectors and also in government.

Nathan Hunt:  Bob, in your book Trillion Dollar Economists from 2013, you argue that economic thinking has proven powerful in a number of different business contexts, sports contexts, you also have a TED Talk on this topic which is a fun watch, but both business and sports have clear outcomes, winners and losers. The tragedy of the commons or at least the way I've always interpreted that teaches us that in social endeavors, we can lose collectively by seeking to win individually. There's a confounding complexity here. Is economic thinking the right approach to social problems?

Bob Litan:  To some degree yes but not completely. Economists focus on an aspect of the tragedy of the commons so to speak which calls for the need for collective action to solve social problems because by definition no one individual can solve these problems, and one of the interesting things that came out of our collaboration in this latest essay was focusing on ways in which individuals within the context of organizations can help bring about collective action, both within those organizations and across them. But not necessarily at the federal level where collective action is most difficult. It's very difficult to get 330 million people on the same page. It's a lot easier when you're at a locality, things are far less politically polarized, certainly a lot easier if you're in the same business or the same firm, and if you founded your own nonprofit, working with other nonprofits as well as within your own is probably easier still. So there are ways to solve the collective action problem even at a more micro level. Add it all up and of course we have a collective that we need to really tackle these big issues.

Nathan Hunt:  Bob, you wrote an article that I very much like during the sort of endless slog that was 2020, recommending that we pay people to take an eventual COVID vaccine. This is before the vaccines were approved. Well, the vaccines arrived and all sorts of incentives were offered to get people to take the shot, yet we still have not reached anywhere near the numbers we would need for herd immunity. The challenge of COVID feels comparatively simple compared to the challenges of systemic racism, income inequality, climate change and reinvigorating democracy. Are you concerned that we as a society have simply lost the will and the social cohesion to address the kinds of challenges you and your co-authors are writing about?

Bob Litan:  So yes, we're all worried about the loss of social cohesion and yes, the lack of it is what contributed or has contributed to our actually pathetic response in the face of COVID and having a simple solution to it and with the vaccine. But when I wrote the piece that you suggested which appeared in August of 2020, this was before the vaccine had been approved, but we knew that it was coming, I very much had this problem in mind. Namely that I fully knew that the country was deeply politically divided. I fully expected it to be polarized and for even the taking of the vaccine to be politicized, which is what led me to the idea, the very simple economist idea of, "Well if you have barriers, some of them artificial, some of them are very real concerns, maybe the best way to overcome them is simply to pay people." And I recommended $1,000.00 simply out of a seat of the pants judgment that maybe $100.00, $200.00 would not be enough.

Bob Litan:  It turns out there were these minor incentives that came out after I published the piece, they were sporadic, a few firms offered them. I think some hospitals did. There were some universities that did, but nobody really offered the kind of incentive that I was talking about. You were looking at maybe $100.00, $200.00. I think one university was $500.00. Nobody really sort of offered the full $1,000.00, which I thought was enough to get enough people off the edge, the people that were on the tipping point, move them to the column where they would take the vaccine, and I actually proposed the idea in two stages. Namely that you'd pay somebody some amount upfront, but then you hold back the rest of the money until either their state or their locality reaches herd immunity, as a way to give them an incentive to tell their friends to go ahead and get the vaccine. And maybe stay off social media and not go out and discourage people and spread the kind of conspiracy theories that have reduced the taking of the vaccine.

Bob Litan:  It's unfortunate in my view that that idea was not taken up. I think it's a victim of timing because in the world of entrepreneurship, timing is everything and it really is true that timing is almost everything in social policy. You have to have the right time when this could have been considered and when I proposed it in August, there was no obvious legislative vehicle to do it.

Bob Litan:  Then when Congress came around to authorizing all the pandemic payments, there wasn't enough thought to actually adding this, this idea to let's say the January package which offered $1.9 trillion, you could have easily put $250 billion of that into paying for vaccines at the time, but there was so much momentum and emphasis just to give the people the checks that people really weren't thinking and also this was a time by the way when the vaccine had just been approved and it's the natural instinct of politicians to say or to think that they can persuade people to change things and so I could understand why even in January the new Biden administration would have embraced this because a new president was coming on board and he probably thought, "Well, if I go out with my public health officials, maybe I can persuade people," and it was only as a last resort that the Biden administration even in July even mentioned the idea of paying people, but then it was $100.00 that the president suggested, and as I just remarked, I think $100.00 is not enough to get people off the dime, especially by that time when people were so dug in, at least of the resisters, and I think you need more money.

Bob Litan:  So we really never had a chance to try out this idea which is unfortunate because now we're in a world of mandates and all the political polarization with that has evolved, and I regret personally that the country was really never given a chance to try the carrot in a full way before we applied the stick.

Nathan Hunt:  Bob, I want to return to the question I asked about economic thinking. Is it your belief that the issue with the incentives around the vaccines is that the timing was wrong or is it possible that the issue is that you're thinking about people acting in their rational self-interest and what we're dealing with is a set of beliefs and convictions that are not rationally self-interested.

Bob Litan:  So I anticipated that and I certainly could be wrong about incentives, but they have been tried in other contexts for other vaccines, to a lesser degree. I mean we haven't [inaudible 00:09:09] COVID situation in previous episodes. But the way I anticipated that idea was to split the payment in two parts. So that you wouldn't so-called waste a lot of money by paying some people upfront because you were holding out the balance and only paying that out if the thing actually works, and we actually got high take-up rates. Then it would certainly have paid, it would have more than paid the economy to have paid these people out, if we had reached those incentives. So I anticipated the problem that you thought about or that you raised. [inaudible 00:09:40] that maybe people wouldn't be rational and in my view it would have been worth society's while to have at least tried the first installment of the payment to see whether we could have gotten to the second.

Nathan Hunt:  Bob, looking at your writings through your career, and I could be wrong here, but I sense a bit of ambivalence about the role of corporations. You're an expert on anti-trust law and a former regulator, you have served as an advisor at the most senior levels of government and you have advised corporations. Here in this article, you and your co-authors talk about the role corporations can play in addressing these massive challenges and talk about the inaction within the federal government. Have your views on corporations and the balance between the public and the private sector changed over the years?

Bob Litan:  They may have evolved but by and large I'm a free market guy and I believe in the free market system. Now it's true a number of years ago I wrote a book with two other colleagues, this was about 2007, a book called Good Capitalism, Bad Capitalism, where we focused or we distinguished between two kinds of private sector organizations, the so-called big corporations, establishments, and the entrepreneurial ones, and we celebrated entrepreneurs for having made breakthrough innovations, which have been more than responsible for our advances in standard of living, and we were less kind to established corporations because they tend to take less risks, they tend to be less innovative, just as a general rule. And they certainly on the whole are not as responsible for the disruptive innovations that we see have been pioneered by entrepreneurs. That doesn't mean I have lost faith in corporations. They are very much needed and so what we wanted to do in this piece is to harness the faith in companies, especially big ones that have so many employees, to help meet the crises that we now face, whether it's climate change or economic opportunity or so forth, and we think that the companies are actually coming around.

Bob Litan:  So while I may have changed my views somewhat, so has the corporate community. For many years, the corporate community was wedded to the idea of maximizing shareholder value and that seemed to be the sort of standard religion of corporate America and as you know, in the last several years, established companies represented by The Business Roundtable have changed, come out with a statement or stakeholder capitalism and said that companies need to take account of multiple stakeholders, not just their shareholders, and that invited a vigorous debate and some people claim that these two views of companies, whether they are maximizing shareholder value or advancing the interests of stakeholders, that these two views were antithetical, they couldn't be reconciled. But in fact in the piece that we write together, we point out that in today's society, maximizing shareholder value is not possible without actually getting buy-in from other stakeholders, meaning your customers, meaning your consumers and your workers.

Bob Litan:  Because to the extent that your consumers and your workers care about social issues. They care about inequality, they care about making sure that you have a diverse workforce, they care about ... When I say they, a lot of them care about they're taking steps to meet climate change and so forth. To the extent that consumers bring those attitudes to bear in deciding what to buy and where to work for. Then companies that are interested in maximizing shareholder value will have to take those views into account in order to maximize shareholder value.

Bob Litan:  Now this doesn't mean that everyone believes in this, and not every consumer cares about climate change or that every consumer cares about diversity and so forth. But enough of them clearly do to make a difference to companies that are worried about the bottom line. So we think that one very powerful message of our report is that these views are not antithetical, that the world has changed, and so the role of the corporation can change and what we really need to do as a society is think how to harness those objectives, those desires by workers and by consumers, for a more diverse and more equal society and for a society that is more sensitive to climate change, how to harness those views and those desires into inducing corporations to helping meet the challenges that we face.

Nathan Hunt:  The purpose of a corporation, the update published by The Business Roundtable and signed off by a number of different CEOs from across the country including Doug Peterson, our own CEO, has been somewhat controversial. There is a school of thought that maximizing shareholder value is an absolute tenet of the economic order that has driven American prosperity in the post-World War II era. I always find this approach a little bit curious because my reading of Adam Smith or Milton Friedman for that matter is that there wasn't a sort of blind, almost religious adherence to maximizing shareholder value. Do you think that we are hitting an inflection point as a society where we are capable of understanding the complexities around shareholder value?

Bob Litan:  Well I think we're realizing that in order to maximize shareholder value, you have to meet consumers, investors and workers where they are. It may have been true 50 years ago that all they cared about were prices or wages. But today, a substantial portion of our society cares where they work and what they buy, they not only factor prices into their decision or the quality of the goods or services they buy, they also factor into these decisions whether the company they're buying from is being socially responsible. Now this is not true of everybody, but to the extent that a lot of people believe this and behave that way and if corporations don't respond to these beliefs, they'll lose out on the market. And so that's why in our paper, we conclude that in today's society, maybe in contrast with the days when Milton Friedman was writing Freedom to Choose in 1951, but in today's society, where people's so-called objective functions have many more things in them other than just prices and wages, companies have to take account of these other preferences. Otherwise they won't survive.

Nathan Hunt:  Let's go back to the book you had mentioned earlier, Good Capitalism, Bad Capitalism and the Economics of Growth and Prosperity. In that book, you and your co-authors argued that there is not just one kind of capitalism, there are four distinct types and they have different outcomes in terms of growth and prosperity. Looking at the challenges in our society today, the challenges that you have outlined in this article, do you believe that the country has become more aligned with a bad form of capitalism? Is that part of what is driving these challenges and how might we bring ourselves back to one of the better forms?

Bob Litan:  Well in the book that you refer to, we distinguish between so-called big company capitalism, entrepreneurial capitalism, bad capitalism which is basically kleptocracy, the kind of thing that we had in the post-Soviet Union phase, and we also have state capitalism, state-managed capitalism which is in even greater ascendance now than when we wrote the book because of course that's symbolized by China, which is the [inaudible 00:17:52] of state-managed capitalism. And if you apply that typology to our current situation, I am worried that in the private sector, we're not getting enough entrepreneurs, although I am heartened by the fact that even in the midst of the pandemic, we had a lot of new experimentation, a lot of new company startups. I don't know how many of those will end up surviving but at least in necessity being the mother of invention, we have had a number of new startups thinking ahead post-pandemic that represent the very best of entrepreneurial capitalism.

Bob Litan:  But to get back to the point that I want to make, the same spirit of entrepreneurial capitalism which we need in the private sector, we need to bring to solving the social problems of the post-pandemic era that we talked about in our piece. Namely improving the quality of economic opportunity, challenging or overcoming systemic racism, meeting the challenge of climate change and improving our democracy. All those four areas are going to require entrepreneurial leaders, whether at the local level or in businesses or at the NGO level with individuals.

Bob Litan:  The fact is is that in the social sphere, we're not going to have the kind of breakthrough successes that we need to challenge these problems without entrepreneurs, just as it has been true that entrepreneurs in the private sector have been responsible for the most beneficial and disruptive changes that we've seen in the past. Things like the telegraph or the telephone or the computer or internet search engines or air conditioning or the automobile or the airplane and the list goes on and on, all these kinds of things that make up modern life were brought to us by private entrepreneurs. If we're going to have a modern life in the 21st century that's going to solve the social problems that we face in the post-pandemic world, we're going to need a similar level of entrepreneurship. Now we're also going to need people to follow them too, but we need leaders to be the prime actors in this.

Bob Litan:  One other analogy I thought I would give that's not in the book, [inaudible 00:19:50] a rower, an eight-person rower, where you have these shelves and you've got eight people, and you can think of our society as having eight people in a boat. The federal government maybe representing three of the oars in the boat, but the boat won't go as fast as it needs to go unless the other five oars are also rowing at the same time, and those other oars are the ones that we concentrate on in our book, and we say that if you have too much focus on the federal oars and you ignore the local and the business and the individual oars, we're not going to get to where we need to go.

Nathan Hunt:  Bob, that was an analogy after my own heart. I rowed in high school and college. I'm thrilled that you brought that up. Let's talk about Democracy in America, the book, not the concept. So just by way of background, not for you, but for some of our listeners, Alexis de Tocqueville takes a paid vacation of sorts in America, wanders around some, finds some things he likes and some things that concern him and writes a book, and probably one of the most insightful books on the American character ever written. So let's imagine dear Alex were still around today and decided to write a sequel. What do you think he might say about us now with his outsider's eye?

Bob Litan:  Okay, so let's remember, when he wrote that famous book, the core theme of that book is that despite all the hurly-burly and all the chaos in America, the one common element he saw in Americans that's distinct from Europeans was this notion of equality. That there was a feeling by people, most people, that they had an equal chance, or a relatively equal chance, and people didn't look down so much on somebody else. Everybody sort of had their chance. If de Tocqueville were alive today, he would look at our society and he would find certainly over the last 50 years that we've become more unequal in many respects. Not only by income level but by geography. We have a dividing line by race and he would remind all of us today that back in the 1800s, we weren't like this, and that a challenge for all of us today and this is one that we focus on in our book is we've got to do a better job of having everybody ...

Bob Litan:  We're not going to have perfect equality of opportunity, we have to give people a better chance, and pardon another analogy, which I didn't use in the book but a lot of people view this of course as a race. Everybody's in a race for life after they're born and the ideal of course is that once we're ready to hit the starting gun let's say after college or after high school, once we're ready to s tart racing, we're all starting from the same starting line. But the reality of course is that many of us don't start from that line. Some start way behind, and if you come from a geographic area where there's a lot of poverty, Raj Chetty and a number of other researchers have showed this, there's huge variation in how far behind that starting line you are depending on what zip code you were brought up in.

Bob Litan:  And then if you add the element of race to it, you have on average people of color, certainly African-Americans, who are even further behind on average than other people. We have to fix that, but we have to fix it in a way that is not polarizing and unfortunately we have reached the point where if someone says we have to worry about inequality for blacks, that means that we're ignoring the inequality that whites face because if you look at that same geographic map that Chetty and others have looked at, there are a lot of white people growing up in parts of our country, in the middle of our country or even on the coasts, they're working or growing up in zip codes where they're far behind that starting line too.

Bob Litan:  As a society, we have to recognize that all the people who are starting at this race from a position well behind, they need to be looked out for and we need policies, not only at the federal level but again state, local level, among businesses, among individuals, et cetera. We need to bring more people up closer to that starting line so that the race is fair. So Tocqueville would chide us. He would say, "America, you forgot where you came from. Forgot what you believe in. You really did believe in equality of opportunity. That's what I saw when I came to America. You don't have that now today, and you're not going to have the America that you wanted to have unless you fix this problem."

Nathan Hunt:  To that point, I'd like to go back to the book you co-authored in 1998 with Robert Lawrence among others, Robert of course being one of the collaborators on this article, Globaphobia. In that book, you and your co-authors make a kind of a pro-globalization argument. The argument that we all benefit from globalization if we commit to this and move things forward in intelligent ways. But there are many people today who would suggest that our current national paralysis is due to the binary outcomes from globalization, the so-called elites have seen their incomes and prospects rise, but the middle class, which was once also sort of the middle ground, has been hollowed out. Do you agree or disagree with that type of analysis?

Bob Litan:  Well certainly globalization has become a hot button issue and certainly has been viewed with much more suspicion than at the time we wrote the book in '98, but I'm glad you mentioned that book with Robert because I got my professional career actually going in the 80s. The second book that I ever did was with Robert, it was a book called Saving Free Trade in 1986, and Robert and I have long been free traders, but we have throughout our careers, both of us, and I have written this with now multiple authors in different decades, without much success yet politically, but I was sensitive to this in the 1980s, realizing of course that trade along with technology which frankly plays a much larger role in creating the kind of inequality that we have today, we realized early on that you were not going to keep society together in the face of all these changes unless you had a trampoline for a safety net, not a hammock.

Bob Litan:  In other words, the trampoline at that time, when we originally wrote it in '86, we had advanced an idea called wage insurance, which unfortunately has still not been implemented, and the idea is if you lose a job, just like better than unemployment insurance, you would get some portion of any wage loss that you've faced when you took a new job you get back as an insurance payment. And the idea that you could go back to work and recover at least some of your lost earnings would give you an incentive to go back to work earlier, and I personally have advocated this now for I guess ... Yeah, four decades with different authors, and I've realized that that's not enough. We need more than wage insurance, so about 10 years ago, I wrote with another author, I said we need lifetime training accounts because people are going to change jobs many, many times, especially in this generation, and people are going to constantly have to learn and if you're not learning on the job and you want to go and get some certificates to upgrade your skills, you want to be able to at least borrow the money, perhaps at a low interest rate or even have what's called a contingent repayment option, namely you only repay the loan if you actually increased your income.

Bob Litan:  But the idea is that the government should be there to help you manage your way through change, and our society has done a horrible job at this. We did a great job with the globalization with reducing trade barriers, but we forgot about helping people along the way and as a result, the country has torn itself apart over this. We have so-called economic losers of all colors and races and all geographies, and we haven't taken care of them and this in my opinion has been the most important factor that has fueled populism on both the left and the right, has fueled the kind of polarization that's ripping our country apart, and I don't apologize for advocating these kind of policies, the trade and globalization which on balance are good for everyone on average. The problem is on average doesn't help a lot of people that lose out.

Bob Litan:  But you know, just focusing on trade and globalization which a lot of politicians try to do, they ignore the fact that overwhelmingly, the other causes of the kinds of inequality that we've seen overwhelmingly have not been due to trade and globalization, they've been due to technology. To automation, to software eating everybody's lunch, to robots, artificial intelligence and so forth and all that's going to continue unless we somehow get at the root cause and enable people to transition from one job to another, one career to another. Until we get that lubrication in our society, we're going to have all these frictions that create all the anger that we have seen in our electorate. I hope that one day we're going to see some of this, but this is something that Robert and I have been writing about for four decades.

Nathan Hunt:  Bob, that approach makes so much sense. You have worked in government. Why don't you think that that part of the program has been implemented? Why have we seen and known we were going to see massive disruption from technological change and globalization and yet not taken the common sense precautions that would have kept us together as a society?

Bob Litan:  My personal view is that few politicians have been willing to take the risks to tell people the truth. There's an apocryphal moment, actually I think it's true, when Bill Clinton was campaigning for the presidency in '92 where he had a speech and actually a variation of this was in that movie Primary Colors, where he's speaking in a factory, I think it's a textile factory in New Hampshire, and he's telling workers the truth, that basically change is going to overwhelm them unless they made change their friend and basically unless they elected him as president, and that he would follow policies of the kind that we've been talking about to help lubricate that change. That unless they embraced that kind of thing, America was going to fall behind. He tried that out in one or two speeches, but he never followed through as president.

Bob Litan:  As I've had interactions with politicians through the years, and certainly as polarization has intensified and so forth, it's a lot easier for politicians to blame something that's very visible. Trade is visible, a factory moves, et cetera. Then they can point their finger at something concrete and say, "That company was bad, they moved. Chinese imports came in, they displaced this. Mexican imports came in, they moved to Mexico." Something that's very visible and it's a lot easier to tell voters, "Go ahead and punish that kind of activity. Let's stop trade, let's stop people moving offshore, taking our jobs, et cetera." It's a lot easier to tell people that than to tell people, "Look, a lot of things are going to change in our lives. We can't stop them all. It's like stopping rivers and oceans, et cetera. What we need to do is policies that are going to facilitate and enable you to basically have you constantly reinvent yourself."

Bob Litan:  A lot of people don't want to hear that message. I mean it's hard to hear that you have to change and keep up with the times. People like the idea that maybe they could stay in their job and stick with it and really not have to change. Just move up the ladder, maybe hope [inaudible 00:31:47] pay increase and so forth, and a lot of people don't want to be challenged, and I think we've had few political risk-takers who've tried that. As I said, Clinton tried it but then backed off and probably because maybe his political people were telling him it wasn't working. I think that's unfortunate. I mean I favor telling people the truth. Just as if you for example go to a doctor. You don't want the doctor to basically give you a bunch of pablum. You want to know the truth, what's your diagnosis and what are your chances and how can I make the best years of whatever years I have left in my life and if a doctor tells you you've got to quit smoking, you've got to lose weight, you've got to do X, Y, Z. Even though you don't like to hear it. You don't want the doctor to lie to you.

Bob Litan:  Well I think the equivalent is true in politics. We need people to tell people the truth, and unfortunately, we reached this polarized stage where it doesn't really pay anybody. There are no incentives at this point for politicians to tell the truth, just to attack the other side and this is a huge hurdle to get over. And so maybe one of the lessons of the piece that we're talking about, let's forget about the federal government for a moment and the people running for office. Let's focus at least on the levels of our society, the communities, the individuals and the businesses, those organizations can at least make some difference and they can take action on their own without our getting the political consensus that we need, these entities can do it. Maybe working from the bottom up, there's a better chance than working from the top down.

Nathan Hunt:  In a different vein, beyond all of the work you have done as an economist and as a lawyer and as a government official, you are also a sportswriter. You once wrote an article I really liked about the true legacy of former NBA commissioner David Stern for The Athletic. Do you think there are lessons for us in David Stern's leadership style that could be applied to the challenges we face right now as a country?

Bob Litan:  I am so grateful you asked about that. Yeah, I'm a sports nut, but then I think most of America is. In fact I'll go so far as to say, I know this is probably a controversial statement. In our so bitterly polarized society where almost nobody agrees on anything, I personally think the most important social glue that is holding our society together is sports. You go to a game, whether it's a football game or a basketball game or a baseball game, you don't ask the politics of somebody sitting next to you. You're all rooting for the same team and you check your politics at the door once you get inside, and it really is the one element of social cohesion that we've got, thank God. Sports figures, especially not just people like David Stern but if you think about great coaches in basketball, football, especially.

Bob Litan:  The great leaders in our society are these coaches. The people like Jay Wright at Villanova, Nick Saban at Alabama, or Coach K at Duke or the professional coaches like Popovich or like Steve Kerr. These people have tremendous influence and I know people want to keep politics and sports separate, but everything is fusing together and if sports is really one of the things that's holding society together, we can't ignore the fact that people listen to great sports figures because these people, the kind of coaches that we're talking about, they have powerful lessons for us in the rest of our lives. They have to mold young people from very different backgrounds together to work as a team. Isn't that really what our country is about? We have all these people from different backgrounds, socioeconomic, ethnic, racial and so forth. We all may not get along, but somehow somebody has got to mold us together as a team and it can't be that we're just waiting for the external event like a 9/11 or a World War II to temporarily bring us together.

Bob Litan:  We need people with the skills of the coaches who are able to take these kids and mold them, and by the way not just kids, adults. Think about the coaches in pro sports, these are adults, many of whom have huge egos. Think about Phil Jackson managing the Chicago Bulls. Or Chuck Daly managing the Detroit Pistons. These are teams of individuals who probably without the coach would probably rip each other's throats apart, they're so competitive and they're so egocentric or whatever but the coach is able to get them to work together in a common way. I think coaches have a powerful ability to give us broader lessons about how our society can move forward and I think all of us could bear listening to them. And you know what? A lot of people will listen to coaches who are otherwise of very different political persuasions, if a coach tells them this is a key to our success and says this is what we need to have national success, we'd be all better off as a society. So sports can teach us a lot.

Nathan Hunt:  Bob, one final question. In the Preamble to the Constitution of the United States, there is a phrase that is used, "in order to form a more perfect union," which I notice is quoted a few times in the text of the article. I've always felt the fundamental optimism of the country in this phrase, a more perfect union. Do you still believe in a more perfect union? Meaning looking at the country today, understanding the profound challenges you have outlined in your article, is our union still on a journey to greater perfection?

Bob Litan:  Wow, you sure know how to ask a tough question. So I'm being perfectly honest here, I wrote a piece with three other colleagues where we think that we can get this more perfect union largely from the bottom-up as opposed from the top-down, but we're not Pollyannish about it and I don't want us to come across as being Pollyannish. I mean we see pockets of hope in business and in local leadership and in a lot of non-profits. But we also realize that there are barriers to scaling these pockets of hope, and replicating them. And one of the reasons we write is we need to remove these barriers and we have ideas for ways to remove these barriers.

Bob Litan:  But even let's say we wave a magic wand and we get rid of all the barriers and we can scale all the hope and we can basically help heal our society, that doesn't guarantee that we're going to get there, because we're right now at a place, and I'm speaking now as someone who is 71 years old, I'm living through a time as we all are but at least in my lifetime, this is the most polarized we've ever been and that includes the Vietnam War era, which was incredibly bitterly divisive. But then in that era, we didn't have social media, we didn't have a gazillion networks, et cetera. We didn't have multiple versions of the truth that are floating around, where people are not operating off the same set of facts and ultimately, I think the only cure to having the multiple set of facts is to have enough progress as a society where people will see and actually feel forward progress, where their lives are improving, and they won't be able to deny it.

Bob Litan:  And so they're less susceptible to buying the crazy theories that we hear in some corners of the internet and some corners of cable TV, and one of the suggestions for example that we have in our piece is we need mechanisms or inducements to have people at a young age work together from different backgrounds through for example national service, where we're able to meet each other outside of the filter bubbles of social media and actually realize there's a human being on the other side and I think if our country can somehow get together and move forward so that there's tangible progress and it's more equally distributed, then faith will gradually return. Some of the craziness will melt away, and the hardcore center of our country, which is not the fringe politically, which is basically moderate, is civil, is respectful, and wants our country to succeed, we need essentially enough of a jumpstart to get us there so that the central part of our country will be validated and people will have faith that yes ... So I'm borrowing the expression yes we can, yes we can move forward.

Bob Litan:  So I'm cautiously optimistic that we can meet the challenges of our day, but I'm also realistic enough to know that we have a lot of hurdles in front of us. And so the sooner we get together doing the kinds of things that we have the kind of rapport, the better chances we have to perfect the unity we talked about and that our founders wanted.

Nathan Hunt:  Bob Litan, thank you for joining me on the podcast.

Bob Litan:  Thank you very much.

Nathan Hunt:  The Essential Podcast is produced by Molly Mintz with assistance from Kurt Burger and Camille McManus. For more research and insight from S&P Global, please visit spglobal.com/subscribe. From the majestic heights of 55 Water Street in Manhattan, I am Nathan Hunt. Thank you for listening.