 The next two speakers also tap into another theme of the conference, which is people who don't fit in neat little boxes. Roberto Regabon is my professor, and a macroeconomist who will tell you that a lot of macroeconomy and macroeconomists are full of crap. And if you take his class, you will be struck immediately by how independent he is in his thinking and how unsuayed he is by the masses. He's very impressive. I'm so glad that you get to meet him here today. Jennifer Hanley was able to join us today. It's a change in the program. She's from the same firm, Tusk Ventures. She's another person who doesn't fit in a box. She actually was a former Press Secretary for Hillary Clinton and is now working in your venture capital as a managing director in the Boston office here for Tusk Ventures. So please welcome Jennifer and Roberto. Good morning. Let me start kicking out this first thing. Very deep couch. Yeah, this is, yeah, we design things, but not necessarily that good. First, thank you so much for coming to MIT, taking time of your busy agenda and traveling across the U.S. with this weather. It's great that you are here. So thank you so much for that. On behalf of MIT, I want to thank all the speakers and all the organizers for setting up this conference. It's a great success. I see a lot of my students here, so I think they might be skipping my 10 a.m. class. For that, you have a penalty, so you have to do another problem set. I'm sorry. Let me kick off this by telling you a little bit about my opinion about what has happened politically. I think this is the first time I have ever been invited to a venture capitalist meeting. I mean, I am a macroeconomist, so venture capitalists, they really don't care what I have to say, which is okay. I don't take it personally. Don't worry. I really don't want to know what you have to say either. But the fact that you have invited a macroeconomist is actually quite meaningful. I actually think that the world, the developed nations, we took always macroeconomic stability for granted. And in fact, for many, many decades, that was true. I think that after World War II, most developed nations had a very stable market economy. The economies that were a disaster were my countries. I was born in Venezuela. My dad was Argentinian. So I'm a complete biological disaster. So we were the places where disasters took place. We were the places where macroeconomic instability was damaging. And in fact, it is the case that macroeconomic instability has a first order impact on standards of living. I think that this has changed since the beginning of this century. Developed nations stopped growing. And that had an impact not only on our standards of living, how fast we were improving, but more importantly that had an impact on our politics and our society. Problems that existed before we didn't realize that existed, like income inequality, inequality of opportunities. And the reason why we didn't notice is because if everybody's improving, it's hard to notice that one is going faster than the other. It's when you stop, it's when you are in that moment of stopping that you realize that things are not exactly the way you thought they were. And that has a very important impact all over the world. I think that actually emerging markets are moving out of populism. And you can see that in Latin America, all the countries, well, I am from Venezuela. I'm the most pathetic one. So it will take a long time for me to move my country out of populism. But Brazil is moving out, Argentina is moving out, Chile has moved out, Colombia and so on, Mexico. So all of them went through the process of where their politics was affected by their economic outcomes. They got disappointed. They understood what needed to be done and they are moving back toward more conservative, more pragmatic policies. This is just starting for development nations. I want to have two messages. One is about patience and the other one is about hope. I don't want to end my 10 minutes with a depressing conversation. It will be depressing though, but I want to in some sense tell you a little bit where this is going. I have seen this played out many, many times. And these processes are not short. They are not short. This doesn't take six months. Never. Not here nor ever. These are always long. Societies need to learn that they made a mistake. And that takes a while. And we individuals do not learn from the experience of others. Can you imagine 330 million trying to collectively learn? It takes a while. And therefore, we need to test. We need to test as a society and I think it's healthy that we test the populism from the right and the populism from the left. We need both. So we understand as a society what is the path that we have to follow. That we are able to construct a vision of what country we want to build. Not the things we want to destroy. Most of our politics, not only in the U.S., in all development nations, is a list of things that they want to destroy. That's all that they tell you. I mean, in Finland, the same as here, as in the U.K., we're just blaming foreigners. In the south of the development nations, I mean, it would be Italy, Spain, Greece, and France, they are blaming sectors. Nobody's telling us what type of society they want to build. And in fact, the very few that tell us, they don't resonate with the voters. Because voters don't care about that right now. They care about an easy solution. They care about an easy way out. We are in traffic. They just tell me where I have to turn. As opposed to say, well, we have to be patient. We have to work harder. We have to educate ourselves. We have to be more understanding, more accepting. Those are very difficult things. We need to increase taxes. Please vote for me. I will not even get the four votes and I have four members in my immediate family that vote all of them, those bastards. I have two Republicans among them. But the point is, this takes long. Is that okay? Now, the optimistic thing is that the U.S. is not Venezuela. I understand that some of you have tremendous fear. I actually had a conversation with many of you right after the elections because it's very understandable that there are fears among a lot of individuals whose values, in some sense, are being challenged by the Trump administration. And by the way, I want to be very clear. I am usually Republican. I am very physically responsible. That doesn't mean that I agree with Muslim bands, but I am usually very Republican. And I think that there are many, many things that need to be questioned in the United States that we do it better. So I do think that there are aspects that need to be challenged. But I think that after a November's election, fear was dominating most of the discourse. And I remember saying, well, this is not Venezuela. And what differentiates the U.S. or any developed nation for that matter to emerging markets is the quality of the institutions. I thought it was fantastic that Janet Yellen, immediately after the election, she said, you know what? I'm staying here, baby. You might want to kick me out, but I am finishing my term. What a beautiful FU. Is that OK? That is a fantastic statement. And you can do nothing. I think that what happened yesterday in the court is another example of how institutions will protect this. The same happened in the U.K. When Teresa May wanted to negotiate Brexit their way, the court said, no, this has to be a public discussion. This is not a dictatorship. This doesn't happen in these nations. Even Italy, we elected in Italy Berlusconi. I'm an Italian family. We elected Berlusconi. And Berlusconi had an impact in the economy, but it was tailored. It was tampered by the quality of the institutions. I'm not saying this is going to be booming. And I'm not saying this is not going to be uncertain. There will be macroeconomic uncertainty. There will be macroeconomic instability. But the message is that trust your institutions and work on the quality of institutions. Work on making them stronger. Because that is the protection from the craziness. That is what is going to isolate. Doesn't matter what is said in that Oval Office, you will be protected. Because institutions will guarantee that there will be representation of minorities and there will be protection. So. And I guess I would just add to that in terms of this audience. I was going to end, though. No, no. Just to, because I think what you're saying is very interesting and certainly right on the mark for how a lot of people in this room probably feel. And it's always good to get another person's perspective who has such a macro viewpoint. But as far as it's a marathon, right? We really have, we have four years of this. Some people like to cut it up until we have a midterm. We have a great opportunity, depending on where your politics fall, that the Democrats have a great opportunity to sort of create more balance on the legislative front. But for the folks in this room who are either contemplating a startup or full on in the midst of running one or those who are investing in them, there are opportunities to really look at where can my voice make a difference and how can I become more engaged in a way that's meaningful. You don't have to boil the ocean on this, right? Like you don't have to get involved in every single issue because there are going to be so many. I mean, what are we in like day 20? And I mean, I'm in my head spinning. We have 20 issues. Yes. So what I have found so encouraging is the way that people have become engaged, the way tech companies have stepped up, the leadership has stepped up. Do they, again, do they have to step up into everything? No, but they have to pick their lanes and really go after the things where they can have make a difference. And it's really important, probably more so than ever. So for all the sort of turmoil and the change, there's also, like you said, keeping focused on the hope that exists within this little whirlwind that we're in. Yes. So one way you are saying this is that I tend never to use the word involved. I don't like involved. I like the word commitment. And it's, I think that the US is demanding more commitment, less involvement. Involvement is what you do when you actually are not committed. I mean, I am not involved with my wife. I am committed to her. I am not involved with my kids. I am committed to them. Truly, I am not involved with you. I'm not involved with MIT. I'm committed to it. I have a broken arm and I come here. And this is very painful. Now, your questions are more painful than a broken arm. I can tell you that. But in some sense, you're right. Actually, I didn't think about it that way. But what you're saying is that today you have to forget about involvement. You need to commit. It's impossible to commit to every single cause on earth. Impossible. So pick the one that is important for you and advocate and protect and demand proper behavior from the people that is near you. I think it starts a lot with that. I mean, like the previous presentation is a lot about commitment. It's asking. I agree. I think Kat really set the stage for just the pillars of how you think about this and ending with justice and doing what's right. And look, it's right for what's good for your business, too. I mean, it's not, I mean, I think I probably can speak pretty broadly. We all care, I mean, very, very deeply about the civil liberty issues that are on the table right now and being talked about. And they really hit at the core of what this country is all about. And what I think some of us would fight to the death for. But there are also the economics that are in play that are not getting the coverage, like the trade implications that are really the media is not covering in the way that I think that it should because the implications are significant. But they're complex. They're not good baked bean headlines, as I say, you know, that we are just in like Twitter land right now. So you can't tweet about trade in a way that anyone can fully comprehend the consequences. So the civil liberties issues are extremely important. But we just can't also lose sight of the things that have the implications for the startups that we are focused on or investing in. So you know, I just think it's they all kind of go to they these things go together and need to. Yeah. So so in your trade and environment are two areas that I'm concerned, because if you go back a little bit to what I said before, those are the institutional protection on those two areas is relatively weak. It's true. And the engagement in them, right? I mean, if you if you think about your sort of stereotypical environmentalist, you know, you think greenpeace and like you think of someone like chain to a tree. And that's not what we're talking about at all. They all change. Right. So it's it's not that it's rational, reasonable environmental policies that believe in science. I mean, if anyone can appreciate that, it's the people in this room are who are actively engaged in this institution are committed to this institution. Yes, yes. And it's a and when you think about it, because there's not an organized defense is undefensible. It's true. It's so yeah. So the environment is a place where I think we we might see very negative impacts in this in this year. And it concerns me because I think that we all have to be have a voice. And I think we've shown that in this country that there will be loud, strong opposition to a lot of the civil liberties oriented policies that that this administration is pushing. But I do worry that in this, you know, land of tweeting that the that some of the other economic implications are going to get lost because you can't you can't put them on a on a billboard necessarily. So I do hope that as part as this starts to unfold over the next several months and and we're in this for years, it looks like that that those issues get the get the attention you know that they deserve. Can you tell us a little bit from the inside circle of Hillary how this evolved? If you can share some of that with us what like how we got into this math. But I don't mean to imply that everyone in this room is a Hillary supporter or obviously, you know, or an anti Trump person. So when you ask, do you mean my thoughts on the election itself or well, did you see any of these coming? Did you feel would you have changed something? You know, we, myself and my family were really involved in this election personally and in our free you were committed in our free time. So I was committed. Yes, I was in committed and like going door to door with my children and my husband was doing things that like he did rather eat dirt than call voters like it's just he's not that kind of a person. But he was on the phone and we all we did like the things that we that we had the time and ability to do. But was I was very concerned. I mean, look, if you look back on the 04 election, there were a lot of us who thought that Kerry was going to win. And when you really looked at the analysis of that race and why he didn't, there were so many socioeconomic divides. And I I said very openly and publicly to friends and colleagues that I was extremely concerned that we weren't that the polls were wrong. And that and that there was a greater greater divide than people realize. And I think, you know, I'm sort of a genetic mess, if you will, like I my father's from Texas grew up in a Baptist family. I would go and visit him often my parents divorced, my mother's like a Bernie Sanders immigrant from Germany who like believes that all things I mean, she's horrified. This is literally this is this represents everything that her family worked hard to get away from and to change when they were living and growing up in Germany. So so the fact of the matter is that like I come from these very different places. So I think I just happened to have like a pragmatic view of some of this. And not that people came here to hear all about like my thoughts on this election per se. But what I what even in like days before when we were going to different cities, I felt reflected on if this doesn't come out the way that we hope it will. The one the one element of this the only thing that I felt in my gut as some of my dearest closest Hillary supporter friends sat at home and like did their day to day and didn't hit the streets in different parts of the world. I mean, our country, the different parts of the country. I couldn't help but reflect on like it's just we don't it's not enough. And people think that just showing up to your point is going to be enough. And my hope then and I and I see it playing out now we all do. But I really like this is not a this is not a sport that you just observe. This is participatory. And you do have to commit to it because it's our government. And you know, it just comes back to you know, when Kat was saying how lucky she feels to be part of an industry. This is the people in this room have an opportunity to be engaged in ways that really exceed anything anywhere else. And it is exciting. And I think that's what the folks who walk, you know, away from today have to remember that when the political circumstances that we're living in are what they are. But all of this hopefully means people are more committed and engaged and really actively doing things and looking for ways, whether it's through businesses that will help change lives, fill some of the voids that are going we're going to see because government spending gets pulled back in some areas services deteriorate. Whether it's helping to shed light on the the the uniqueness and beauty of immigration and the things we care about. I mean, there's just kind of a limitless opportunities that I think we have to focus on from from the hope perspective. In fact, my wife blames me for for for for everything that has happened in the United States, actually. Yeah, men are usually to blame because my grandfather has to escape Italy when Mussolini was there. My mother has to escape Spain when Franco took over. Then my grandfather moved to Italy and my father was born in Argentina. And then my father had to leave when Perón was elected. Then he moved to Venezuela. So they both met in Venezuela and then both moved out of Venezuela when Chavez was elected. And I became a US citizen in the year where September 11 took place. So so according to my wife is is a curse of the regal bonds. So so you should try to keep me out as soon as possible just to let you know. So maybe you brought economics and trade. And I think let me also put a positive spin on that. I think on aspect of trade, let me tell you what happens in practice. The worst that can happen is what we call quantity restrictions is when you, for example, you stop trading with a country. This is what in fact we do this all the time. We put sanctions. So if we have a problem with Iran, we put sanctions to Iran. We have a problem with Cuba. We put sanctions to Cuba. And sanctions is the prohibition of trade. We don't put tariffs. We don't put 10 percent tariffs or 20 percent tariffs or 50 percent tariff for that matter. And the reason is that actually in practice, there is a very different impact in the society when you put tariffs versus when you put prohibitions. Prohibitions are very costly. But if we increase the tariff with with Mexico by 10 percent, that would be bad. But to be honest, the economic impact is tiny. Right. In this building, we have spent a century trying to find the negative impact because we know exist. Okay. And when we find one, we is a major publication. And I think we have had in the history like two or three times. They're tiny. And the reason is because companies, individuals and countries adapt to those price changes. I always give the example of how we deal with addiction in human beings. So if I smoke, well, one way is that you put me attacks and you said, well, I'm going to charge you $1 every time you smoke. Well, can you think about if someone is alcoholic, how much you will need to charge on those taxes for the person to stop drinking? What about if you like food like me? I like to eat a lot. I cannot stop eating pasta. I love pasta. But according to my doctor, that's very bad for me. So guess what happens? I have to pay for for pasta. Well, I just teach two more classes. But when my wife talked to the doctor and the doctor says, Roberto need to stop eating pasta. Guess what? There's no pasta at home. It's a quantity restriction. She's the Republican, by the way. So but it is it is actually important to understand that the negative impact of all trade, what we have to do is to pay attention to the form of the intervention. I think they want to do something to make it visible to the constituency that voted for Trump. But if that is in the end a 10% tariff with with Mexico and a 10% tariff with China, we will survive that easily. In fact, be glad. Be glad that is if we stop training with a country like more or less what happens every Saturday night life when Alec Baldwin is there, that that that quantity restrictions are the ones that are very costly. I think that that's again a lot of what I'm seeing is that there's a lot of rhetoric and I think a lot of rhetoric will spill over in some actions. But if he saw if those actions are trade on 10% revise of Obamacare but without repeal again repeal is a quantity restriction. There are people that had access that I am denying access now. You see that that that that is costly. But if this is a revision of Obamacare they can revise it to a million. In fact it's good that we revise it. It was not perfectly designed. So I think it's good that we revisit financial regulation. It was not perfectly designed. I think it's great that we revise healthcare regulation. It was not perfectly designed. So if we're on the revision mode revise everything. I am always concerned and in fact pay attention to those quantity restrictions and in fact the environment is one that we try to protect the environment with quantity restrictions. We do not want a pipeline. You see? So when we free that constraint then it's not about a carbon tax. The carbon tax will not ameliorate the cost of the pipeline. So you see here is a relaxation of a quantity restrictions. Those are the ones that have significant impact on on on the economy and everyday life. In the world of Twitter I forgot to say that in the world of Twitter the biggest risk is headline risk. And if in the financial sector I think they must be tired of headline risk. Every time I mean it just happened with Nordstrom no? It's a tweet for Nordstrom goes up by 10% goes up by 20%. That uncertainty is not fundamental uncertainty. It's uncertainty that bothers our life. That will be here for a while because I don't think he will stop tweeting by the way. I don't either. No. No. I think that is here to stay. That's here to say. Yes. Yes. So it does appear though from just the last 24 hours in the conversation that he had with the president of China that Tillerson has a certainly some sort of voice of reason. It does look like things are somewhat calming down in the State Department that they're there are some logical recommendations coming through. And it's it'll just be it'll be interesting to see you know how it continues to play out if it's I think in general he's clearly agitated and doesn't doesn't did not recognize or understand fully what the complexity of our of our government and the institutions and how they work. And that you know he is not in a castle. I I agree. And in fact I serve under a president that was exactly the same. And the difference is that here the institutions will protect us. The freedom of speech will protect us. I hope so. Yes. We do have another Supreme Court seat that is potentially will become available. And that is when I mean I never thought that it are in my lifetime I would see our government operating basically the heels of the judicial system. I mean that's kind of what many of us are holding on hope for. And I I I did not think that that would really come come to pass. But but yes to your point it's it's extraordinary that it exists and it was set up this way for a reason so that we would have a balance. Welcome to populism. Wow. Yes. And it's a I do remember serving under that president that there's something that Mark Twain said and it could not be more correct at that moment that common sense is the least common of all senses. And I I don't think that that presidents necessarily learn. I I think presidents in general what they do is that they are somehow affected by the people that surrounds them. And their views on their ideology is very difficult to change. They are usually very passionate in general. Right. And I expect that to be the case here. And in the same way I expected that to be the only thing is that it's not it hasn't ever been clear what he really believes or stands for. So I don't necessarily feel I'm not convinced that he has a strong any strong convictions which is dangerous and also encouraging in some respects. I don't believe that he came into this with he had these these big grandiose things. But I don't know that that because you don't understand how they work. You really have barely participated or been committed to any of these things. Then your impact on them is going to be somewhat somewhat limited. So I do not think he has that he really believes in anything. I think he really has a list that he keeps of the things that his headlines that he wants to achieve. Yeah. Yeah. And I think hopefully the people that is advising finds the least the least damaging way to deliver those promises. That's I agree. And it's a and it's so so yeah. And so our institutions hopefully will do something about that. And and hopefully we will be able to you know education comes up constantly as being you know one of the missing links in all of this because we clearly have this divided nation. And a lot of people have pointed to well it's the school system hasn't isn't doing isn't doing enough. And you're when you look back on the experiences and you look at other countries and the populism that you talk about. Do you see where because that I don't I don't know like how we necessarily address that here. Especially because that you're talking about it's a socio-nomic issue as well populist both from the left of the right. They do not want to invest in education. I would say that that that has been true throughout you know history. And the reason is it's much easier to govern through fear and ignorance than through reason. And and therefore yeah. However to to be honest the education system in United States we have tried to change them many times for the last 60 years completely unsuccessfully and with good intentions. So there's no I mean the California education system is impossible to improve or deteriorate for that matter. So just it will be unchanged. So so in that sense. But but I do think the U.S. needs to invest way more on education. We put one third of our citizens through college. I think this is unacceptable. When I look at the developed nations they put two thirds of their people through college and I have no idea what it is. Clearly it's not my salary. They don't pay me that much. So but but college is expensive but we have to find a way to finance that. And and we and I think we have to do this through the private sector. I think that we we need the private sector to commit. That could be a cause where you actually not only put your time effort but your resources where you find ways to improve education system at the primary school at the preschool system at the secondary school. And then we find a way to to improve it. But there will be no from an online standpoint. I mean you've got more cellular access than ever before in this country. I mean there is a huge hole there. That's I mean you have more children and communities who can access the rest of the world through right in their classrooms. And it's still continues to be this gaping this gaping hole unfortunately. I mean I think that the people in this room can feel empowered that there's a huge opportunity there. And they're all fit to fill it. In fact I have. It's a great place to wrap up this discussion. Opportunity before we get back into how sad we are. No no no no no no no no I hope I hope that we have been fair about saying things are difficult but they are not impossible. And in fact let me just finish with this. I have known many of you for many many years and I have been teaching here in this institution for 20 and it is something that I know is that you have never ever ever fail me. Never. When there's a problem out there you solve it. When there's an opportunity there you improve it. When there's there's an issue there that needs your attention you get committed. And I'm pretty sure I know this guy will miss my class so he will probably disappoint me a little bit in the next 10 seconds. But but I can tell you you have never disappointed me. So my hope this country my hope is not because this country needs to have institutions that's one is because you exist you put all your time in your commitment. I have absolutely no doubt that we will actually survive this path. So thank you so much.