The World According to Cass Sunstein

Third Way

Capital Markets 101

The World According to Cass Sunstein

Introduction:
Jim Kessler
Senior Vice President for Policy, Third Way

Speaker:
Cass R. Sunstein
Robert Walmsley University Professor, Harvard University

Moderator:
Jim Tankersley
Economic Policy Correspondent, The Washington Post

Location: 485 Russell Senate Office Building, Washington, D.C.

Time: 12:30 p.m. EDT
Date: Friday, June 10, 2016

Transcript By
Superior Transcriptions LLC
www.superiortranscriptions.com

JIM KESSLER: Good afternoon, everybody. I’m not surprised that we have a good crowd today. We have a fantastic – we’re going to have fun. And we’re going to learn something while we’re having fun because if there’s anything that comes of today, it’s that when your parents told you, like, to stop obsessing about Star Wars and to do your real work, that they were actually wrong. (Laughter.) And there’s nothing better than proving your parents wrong, really at any age.

Joining us today is Cass Sunstein, who is the author of the new book “The World According to Star Wars.” And this is my first time meeting Cass Sunstein, but I’m really familiar with his work. He’s one of my all-time favorite thinkers. He has the ability to write something that, after you read it, it changes your thinking in some big or small way forever. And he did that for me with his best-selling book “Nudge.” And it’s greatly influenced the work that – the way I think about public policy, and it greatly influenced the think tank that I helped start, Third Way. And behavioral economics and that type of thinking and philosophy is behind a lot of the work that we do. So I feel like I’m meeting a(n) intellectual hero.

He’s the author of so many books that if I listed them we’d have to – you know, we’d run out of time here. He served in the Obama administration in his dream job at OIRA. His latest book, “The World According to Star Wars,” is climbing the chart.

He’s going to give a presentation on the lessons you can take from Star Wars, and then he’s going to be interviewed by Jim Tankersley. And we’re actually – Jim almost didn’t make it today because security stopped him because of his lightsaber. (Laughter.) He was very upset, but he pulled himself together to join us. And I know I shouldn’t play favorites, but Jim Tankersley is my favorite Washington Post reporter. He covers economics at The Post, and he is able to marry very, very complicated economic concepts and data, and very poignant narrative and story. I think it is a special gift that he has, and he brings that to The Washington Post. And it’s why he kind of rocketed up there as one of the great reporters. He also – before coming to The Post, he had his dream job when he was economic minister for the Jedi, I believe, previously, and did a wonderful job there. (Laughter.) And, as you will see, not only is he a restless intellect, he’s also a Star Wars junkie.

So I’m going to get out of the way. Cass, you can start off with your presentation. And then, Jim, you guys will have a great conversation.

CASS SUNSTEIN: OK. It’s a great honor to be here. If you told me 18 months ago that I was going to have a book on Star Wars, I would think it was more likely that I’d become a professional basketball player and the MVP of my beloved Boston Celtics. (Laughter.) I have – I aspire to that. And – (laughter) –

MR. KESSLER: So do we.

MR. SUNSTEIN: I’m going to tell you a bit about behavioral economics and public policy. In the discussion, I hope we’ll go really heavy on Star Wars. So, you know, details that are so obscure but are really important, we’ll get into them. But for now, we’re just going to have some occasional notes on Star Wars.

So there is a little child and there is a dad, and that’s kind of half of what makes America work. There’s also moms, so that’s the other half. Child gender unclear. They’re Stormtroopers. They’re protecting us.

OK, so Star Wars is bipartisan. What George Lucas got at was the fact that there is good, even in the worst person in the universe, Darth Vader; and there’s bad, even in the most heroic and powerful Jedi of all, Luke Skywalker. He does go dark. It’s true. There’s bad in him, as there is good in the worst. Martin Luther King said something like that, and I think it’s a profoundly true and very important thing to keep in mind.

Star Wars is respectful of freedom of choice. Its tacit political theme – tacit may be a little too strong, but it’s not a shouting-in-your-face political theme – is the direction of your life, that’s yours. It’s no one else’s. It’s up to you. It is respectful of self-government for the same reason that’s respectful of freedom of choice. And it has a lot to say about how political change actually happens. Both the saga itself involves a completely unanticipated world-transformative saga, and it involves the rise and fall of an empire through stylized but kind of real steps, and the fall and rise of a republic through cartoonish but historically kind of good depictions.

OK, are Jedi knights behavioral economists? (Laughter.) Well, they certainly know how to focus people’s attention on one thing rather than another, and they’re aware of the let’s say bounded nature of human rationality.

With respect to behavioral economics in public policy, conservatives were there first. The Obama administration has used insights, but this is more a conservative policy program at its inception than a liberal one.

So George Will said in early days arguably the most cost-effective thing government does is nudge by disseminating information. And, he adds, nudges have the additional virtue of annoying those busybody nanny-state liberals who, as the saying goes, do not care what people do as long as it is compulsory. So, as with Star Wars, so with behaviorally informed policy initiatives: they are deeply respectful of private choice.

The U.K.’s Conservative government created the Behavioural Insights Team. I hope everyone in the room knows about that. If you didn’t, now you do. And it has saved taxpayers significant money, improved health and other outcomes through using behavioral economics, and in a way that is, in the U.K. setting, not causing any kind of partisan stress.

President Obama has an Executive Order, 13563 – that’s a charming and unforgettable name, isn’t it, 13563? (Laughter.) That was a clever marketing device to use those numbers. And the – it’s the most important executive order on regulation since 1993. Clinton did one. And there’s only one in the trilogy, which is a Reagan one in 1981, which then they are siblings; they’re all in the same family. So this is a really big deal. It’s a like a Constitution for the regulatory state. And the provision I’m drawing your attention to is something called “flexible approaches,” which says “each agency shall identify and consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public. These approaches include warnings, appropriate default rules, and disclosure requirements, as well as provision of information to the public in a form that is clear and intelligible.”

Now, that might seem like kind of jargon-y bureaucratic stuff. It’s massively important. It should attract support from any president, whatever the political party. The idea is identify and think about freedom-preserving approaches, and be kind of shrewd about the extent to which a default rule, a warning, a clear and simple disclosure requirement can be helpful.

OK, so even Sith respect freedom of choice. We’re going to have occasional Star Wars references if you start to flag. (Laughter.) That’s an ugly – that’s the worst person in the galaxy, that one right there, and he respects freedom of choice. He might kill you if you exercise your freedom of choice the wrong way, but you get to make the choice.

Now, here’s a(n) executive order from less than a year ago. It doesn’t have the Constitution-like status of what everyone should have, I think, you know, in some version of a virtual desk; that is, 13563. It doesn’t have the Constitution-like status, but it’s a big deal, and it wasn’t controversial. It’s a directive from President Obama – and you could easily imagine a Republican president doing the same thing – saying use behavioral science, behavioral economics and psychology to design policies to serve people better, design policies in a way that reflects how people actually engage with, use and respond to policies and programs. The executive order has a lot more in it than that as part of its directive, but that’s the kind of preamble.

OK, so what happened? I was at the University of Chicago for a long time, and we had something like a haiku which you are looking at now. It’s not quite a haiku. “Human beings are rational. They calculate probabilities and maximize expected value. They respond to incentives.” Gary Becker won the Nobel basically for turning that haiku into some very impressive theory and policy recommendations, and the idea is improve incentives.

And governments all over the – I hope this is familiar; this is kind of a stylized version of I think how standard policies have been thought of for the last 40 or 50 years. And this isn’t all wrong. But there are behavioral objections which have, for policy purpose, five principal forms.

The first is, people have limited attention. So certain products and activities have shrouded attributes. If you buy a refrigerator, you might not be focusing so much on how much it’s going to cost you to operate it for the next 10 years. There may be features of a credit card or mortgage that aren’t terribly clear to you. They are not what you’re attending to, but they are going to be really important in the next five years. Human beings tend to focus on today and tomorrow, and the long term often seems like a foreign country called “Later Land” they’re not sure that they’re going to visit.

We can show a little – have a little demonstration of present bias right now. It’s going to be neurological and it’s going to be – we don’t have your brains being hooked up, so it’s going to be a little artificial. Think of yourself on a beach next month, right now. Two of you aren’t thinking about yourself on a beach right now. Please, think about yourself on a beach in two months. OK, what happened just then for all of you who did that is that an identifiable part of your brain lit up. Let’s call that the narcissistic piece of your brain. It’s the piece of the brain that lights up when you think about yourself, and the neuroscientist can locate it. And that happened for all of you, 100 percent of the population.

Now think about yourself on a beach in 2017, June. You, on the beach, 2017, June. OK, for a significant number of you, that part of the brain didn’t light up. Your future self is, to you, a stranger. You thought of someone, but it’s not really you.

Now, the trick is that for those members of the population for whom that part of the brain didn’t light up when they thought about theirself in a year, they will rather have a dollar today than five dollars next week. They are predictably impatient with respect to rewards. That means that long-term health risks and financial risks will matter less, which means that there’s actually a neurologically demonstrable source of present bias. And of course, many of the problems Americans face are a product of undue focus on the short term.

People don’t always do well with probability. In New York, where I live most of the time, there was in recent memory grave fear of Ebola, even though more Americans had married Kardashians than had died of Ebola. (Laughter.) The reason people weren’t going around saying, “Oh my God, I might marry a Kardashian” – (laughter) – but they were saying, “I might die of Ebola.” And the reason is that the incident in which someone died was extremely salient, and fear was rampant because it was cognitively available. So if something’s available, you may get people much more scared than reality warrants. If it isn’t, they might be less scared.

Other things being equal, human beings tend to be unrealistically optimistic. The group that is most egregiously subject to unrealistic optimism is college professors: 94 percent have been found to believe they’re better than the average college professor. (Laughter.) Eighty percent or more of drivers think they’re better than the average driver. If you take a couple and ask what percentage of the household work do you do, if the total isn’t over a hundred percent it’s a very unusual couple. (Laughter.) That can lead to insufficient precautions.

Human beings hate losses. OK, we’re going to do a little experiment in the room. Just by the kind of, what is it, the mischief of the organizers, all of you are going to have to give to this table $10 at the end of the talk. I’m really sorry. But it’s not like anyone who’s an organizer is going to be richer by that amount, because each of you is going to get $10. This isn’t true, by the way; don’t be scared. (Laughter.) But if that happened, well-being in the room would be less, not equal, even though aggregate wealth would be the same. Because losing $10, in terms of lived experience, is approximately twice as bad as getting $10 is good. People hate losses. And we know that helps explain why a small tax in the District of Columbia on paper – on using a bag, a plastic bag, has a significant effect, whereas a promised bonus if you bring your own bag has no effect. And it helps explain why teachers, if they’re given an economic reward for teaching well, don’t show improvements in their students’ math scores; but if teachers are told at the beginning of the year here’s some money, if your scores – if the scores of your students don’t increase at the end of the year you’re going to have to give that money back, then the scores jump.

OK, so these are not the droids you’re looking for. That’s about limited attention. That’s taking account of bounded rationality.

OK, here are six behavioral policy claims.

Default rules really matter, so one way to change behavior is to say the default is going to be you’re in a savings plan, you’re in this health care plan, you are going to have a double-sided printer rather than a single-sided printer. Default rules tend to be really sticky.

Incentives may not always matter much because the people may not pay attention to them. As a longtime University of Chicago person I am jarred by that fact, but it is a fact.

Choice architecture – that is, the architecture behind which you make decisions – is both exceedingly important and it’s not avoidable. A website has choice architecture in it. What you see first or in large font often matters a great deal. If there’s a letter from the government that encourages people to do or not to do things, there’s an architecture in the letter, and the effectiveness of the letter will depend on the architecture – that is, how intelligible it is, whether it’s using losses or gains, whether there are red colors or green colors. Candy bars that are in green wrappers health-conscious and environmentally conscious people buy, even if they’re pure milk chocolate. Whereas something in a brown wrapper people don’t think is going to be good, even if it’s exactly the same chocolate bar. If people sign forms at the beginning – please remember this – the incidence of fraud is much lower than if people sign forms at the end. There’s reason to believe that that occurs because if you sign a form at the beginning, you’re on the line in terms of your own being a good person, once you go through the form. But if you sign at the end, you’re more likely to say, yeah, whatever. And so that could be a cheap way of reducing fraud.

People can use a nudge – and I’ll say a little bit about what that means – and simplicity is really, really important. So here’s some data for you. This is from Vanguard. It shows the effect of automatic enrollment in savings plans on increasing participation rates. Now, what you need to know is to get out of automatic enrollment is really easy. You just have to sign a piece of paper or send an email. But at every end of the income distribution – this is, by the way, a Bush administration initiative to spur automatic enrollment; Obama has carried the torch, but it came from Bush originally – you’re seeing higher participation rates at every end of the income distribution. And for people at the lower end, you’re seeing massive increases, not because of economic incentives. The government isn’t spending a nickel. It’s just because people are automatically enrolled.

This is the financial aid form. I know some members are interested in fixing this, and the Obama administration’s made some movement. You can see that the flowchart itself, not the form, is impossibly complicated, which discourages people from filling it out, and has adverse effects on shared policy goals.

OK, so a nudge is a GPS. It is respectful of the direction in which people want to go, doesn’t try to override their own wishes, but it tells them how to get there.

This is the only scandalous slide I have. It’s a urinal. Maybe some of you have never seen a urinal before. This is what it looks like. It’s a real one. (Laughter.) But it’s not just any urinal; that’s a fly painted on the urinal in the Netherlands airport. It’s not a real fly. And the reason they painted the fly was they had a problem there: spillage. Sorry, spillage in the airport. The result of the fly has been to reduce spillage by 44 percent. Apparently men can’t help but aim at the fly. (Laughter.)

MR. KESSLER: Who does the measurement? (Laughter.)

MR. SUNSTEIN: (Laughs.) Yeah, well, I hope they’re paid well. (Laughter.)

So the reason this is not just a solution to a(n) admittedly small public policy program – problem, it’s illustrative of the immense power of triggering people’s attention by, for example, a warning, a disclosure, a sign which can often pay big public policy dividends.

So we’re speaking here of a feature of the social environment that affects people’s choices without imposing coercion of any kind of material incentive. As soon as “Nudge” came out, the editors of The Weekly Standard called me and said come in and talk to us. And they were over the moon about this set of policy initiatives because of the sentence I just read. The Weekly Standard is not excited about coercing people to go in directions that the government wants. They say it’s – if you can affect people without imposing coercion or material incentive, that’s great.

OK, that’s not a nudge. I’ve just had a spoiler for “The Force Awakens.” (Laughter.) But if you kill somebody, it’s not a nudge. A jail sentence isn’t a nudge. A criminal sentence isn’t a nudge. A tax incentive isn’t a nudge. A subsidy isn’t a nudge. So we’re talking about no federal dollars, no federal threats.

I had a slogan when I worked in the White House, “plate, not pyramid,” and I hope you’ll remember this slogan. This is the old USDA Food Pyramid you’re looking at. There’s a person, gender unclear – you don’t know if it’s a man or a woman – who’s marching to the top of the pyramid. The person has no shoes. There’s a white triangle at the top. Do you know what that is? If you’re a student, a teacher, a diet person who’s helping (the student team ?), is that triangle – is that thinness, is it death? Where’s that person going? (Laughter.) Now, if you would look at the stripes, can you associate those stripes with identifiable foods? Is that blue, red, green, is that meaning anything to you? I work on this stuff. I have no idea what the colors are referring to. Do you see the food groups? This is – was at one point the most-visited website by the U.S. government, and it was designed not by cruel or mischievous people, but by excellent people who were trying to be helpful. I can recognize the kinds of foods that are in the various colors, but there is one thing here – if you look at it closely – that’s clearly recognizable. Look at the bottom right, if you would. See what that is? That’s clearly a shoe. Is the government telling people they should eat leather? Is that the instruction? (Laughter.)

OK, so we eliminated that – I was in the government at the time – and did this instead, which may or may not be ideal, but it’s very intelligible. It says make half your plate fruits and vegetables and you’re there. And this is accompanied by more elaborate advice on the website. But the point is that often, when people are not responding to something the government says, it’s not because they hate it, it’s because they don’t understand it.

In my own experience in the White House, maybe one of the biggest surprises was that people said over and over again, you’re giving us the equivalent of this. We don’t understand what you’re asking us to do. And that’s costly to try to figure out, and also can produce risk aversion, costly risk aversion. Instead, give us something like this, so we know.

OK, nudges work. Here are three examples.

In Denmark, automatic enrollment has a much bigger impact on savings rates than significant tax incentives. Now, that’s doubly astounding, I think. Significant tax incentives should have a really big impact on savings. It’s kind of a waste of money, and there’s an argument that the tax incentives the U.S. is creating for savings are excessive. Automatic enrollment shouldn’t be effective because people can possibly opt out. Nonetheless, it is. That’s both an important public policy lesson, and I hope you’re thinking now of other domains where instead of using incentives, we could use automatic enrollment in something and it could have a very large impact. I think the sky’s kind of the limit for potential creativity in this domain.

OK, there’s a company called Opower, which sends people a little report telling them how their energy use compares with that of their peers. The consequence of that report in terms of saving money – and it has some environmental benefits, too – is equivalent to a 8 (percent) to 20 percent spike in the cost of electricity. Meaning, if you want to produce a reduction in energy use, you could impose a tax on energy use of 8 (percent) to 20 percent. That’s not politically popular, and it’s kind of harsh. It would work. It wouldn’t work better than sending people a two-page note which shows how their energy use compares with that of their peers. So the nudge intervention, which is choice-preserving and allows people to go whatever – it’s like a GPS, people can go in whatever direction they want – has the same effect as a – as a pretty rough economic incentive.

Simplification of the financial aid form, I hope some of you are working on that. That has the effect of increasing the subsidy by thousands of dollars, one or two thousand, in getting people to go to college. That’s a massive effect on the goal of the form, which is to help people to go to college. And I know there’s bipartisan interest in doing that. I hope we’re going to see it pretty soon.

OK, so the Republic. The idea here is that all of this stuff has to be done with close attention to democratic forms. So you want no manipulation. You want full publicness. And you want some period of public comment if it’s coming from the executive branch. So the idea is we don’t want any nudges that compromise democratic commitments.

OK, a few notes on regulation in case they are of interest to you all. So whatever the performance of any particular executive branch in any particular year, we have, under President Reagan’s actual – actually, his – it’s his innovation and it’s survived the test of time – a highly technocratic process in the White House that is not political, that places a big premium on three things: public comments, minimal intrusion from the regulatory state, and cost-benefit analysis. Those are basically the three ideas. They’re really simple.

Minimal intrusion naturally leads in the direction of nudges, rather than mandates. So you saw that provision of the executive order, that’s not in Reagan’s original executive order, but it’s consistent with the spirit.

The cost-benefit requirement is essential to the process, and it’s stood the test of bipartisan pressure.

The public comment idea I have some news for you, which some members of Congress I’ve talked to about this have been surprised by. If a member on the House or Senate side sends a letter in to the administrator of the Office of Information and Regulatory Affairs saying this regulation seems misdirected in general, or for particular ways, that’s going to be read by people in a position to make a decision. It happens that letters that don’t get responded – responses sometimes, because any response is potentially a punching bag, have a big – you get it, right? You respond to the letter, any response can be turned into something that is beaten up on. Nonetheless, the letter gets careful substantive attention. So if there’s a suggestion from someone you work for saying don’t do this at all, or do it in a different way, that can reverse the ship of state in the extreme cases and reorient it in – that’s kind of – reorient it. If it’s substantive. If it just has a political excitement, positive or negative, that doesn’t matter. But if it’s substantive, as it frequently is, please go for it. That’s information that you and your constituents have the executive branch may lack. Can be essential.

OK, so here’s what could happen. That’s a happy ending.

Could happen. (Laughter.) Thanks. (Applause.)

JIM TANKERSLEY: OK, so we’re going to do this a few different ways. First, we’re going to have a conversation, then you all are going to ask questions. The questions can really be about anything. They can be about regulatory policy. They can be about your own experience with nudges or the ways that you want to formulate policy. They can just be about Star Wars, and that’s fine. I’m going to ask most of my questions juts about Star Wars, to be really honest. (Laughs.)

I appreciate the chance to chat about this. The book is – the book is fantastic, in that it really brings together a lot of the points that you just – on screen, with some wonderful history of the Star Wars movies, and then some reflections on what they actually mean.

So I want to start with one of the big questions that you lay out right away in the book, which is: Star Wars as we know it is a mega hit. And to most of the people in this room it has always been a mega hit in their lives. But was it guaranteed to be? Why was it so successful?

MR. SUNSTEIN: So the first point is that Star Wars has something in common with Barack Obama and Donald Trump, which is no one thought it could possibly work out. (Laughter.) So the actors said that this is, you know, idiotic. There’s this guy walking around in this, like, giant dog outfit. Harrison Ford said to George Lucas: George, you can write this – and then a four-letter word beginning with S – but you sure as hell can’t say it. He thought the dialogue was really bad. His studio had no faith in it. They didn’t print enough film to capture – they literally didn’t think it was worth the film on which it was printed. They did a screening at Fox, and there was no applause. There wasn’t even a smile. People thought this is a disaster. And then it completely took over.

So unanticipated success story. I’ll give you what I think is a clearly wrong, but temping, explanation. And this applies to political candidates and ideas and culture – all of them. And then I’ll give you one that might be true. So the false one is – I think – is it fit with the times. So after the Cold War, amidst post-Watergate trauma, with the Soviet Union looming as the terrible empire, Jimmy Carter’s malaise, the nation needed “A New Hope.” It needed a lift. It needed something that was gee whiz and colorful. And so it was bound to succeed because it fit with the time. Now, that’s what some really smart people have said, including people in the political domain.

Now, imagine Star Wars or something like it became successful at any time in the last 50 years – tomorrow, right after 9/11, or during the Clinton administration. You could give exactly the same story and it would be as plausible. Couldn’t you? After 9/11, that’s what the country needed. After the Clinton impeachments they needed something innocent. During the late stages of the Bush – so you can always tell that it fit with the culture story. And it sounds good, but it’s a fairytale. It’s a just-so story. So I think that explanation is not right.

Here’s the explanation which I think is typically right, which is it’s about social influences and echo chambers and little floods becoming rivers. So after Star Wars came out, I think is very closely related to Mr. Trump and President Obama, people liked it a lot. They told their friends. They told their friends. And it became an irresistible movement. There’s a great movie not very long ago that won the Oscar called Searching for Sugar Man, that’s about a ’70s rock singer named Rodriguez, who was a flop in the United States, probably no one in this room has heard of Rodriguez, except if you know the movie.

But in South Africa, unbeknownst to him – he became a demolition man because he couldn’t make music – he was a giant. He was bigger than The Beatles. And in South Africa, people said, Rodriguez, with awe and reverence, what happened to him? He killed himself on stage. That’s what – he burned him – they didn’t know. But they thought he was the greatest giant ever. Why was he so great in South Africa and doomed in the U.S.? You could say, well, apartheid South Africa, U.S., different dynamics. I don’t believe it for an instant.

He’s very good, Rodriguez. He was like Star Wars and Obama and Trump. He got a lot of excited people who created a cascade of enthusiasm. And I think that’s how life is. And that’s what happened with Star Wars.

MR. TANKERSLEY: One of the interesting things about the movie that – I mean, there were – I would like to point out actually, since you brought up the Beatles, that there are some parts of the book that are clearly wrong. For example, you said the Stones are better than the Beatles. That’s clearly wrong. (Laughter.) You say that – and then there’s some ambiguous things. You said that “Empire” is the best Star Wars movie. I disagree with that, but I think that’s – you can make an empirical case for that. (Laughter.)

But you also walk us through the ways in which the movies themselves were not necessarily mapped out – I mean, they were not mapped out from the beginning. And what we perceive now in retrospect – having watched them – as some grand plan wasn’t actually the case. Can you talk about that a little bit, and sort of our biases to think about things as a complete story even when they are sort of made up as they went along?

MR. SUNSTEIN: Yeah. So George Lucas, the mastermind behind Star Wars, has said on several occasions: I knew Darth Vader was the dad of Luke. I had figured that out at the beginning. I knew Luke and Leia were siblings. It was going to be a story about twins and a father, their difficult relationship. I’m a little embarrassed to confess, I’ve read all the drafts – at least all of the ones that are publicly available. And the actual story isn’t that. He did not plan that all out. The face that Luke and Leia have a romantic – an unmistakably romantic kiss kind of gives it away that they’re not twins – unless it’s a different kind of movie. (Laughter.) The fact that in the early scripts for “A New Hope” they have different ages is kind of suggestive that they’re not twins.

So he had to solve a problem, the romantic triangle with Han and Luke and Leia. And the way he did that was to say they were twins. And he figured that out quite late. That was a little desperate. And Mark Hamill said it was lame. He didn’t know that at the beginning. And the fact that Darth Vader was the father – I mean, he himself has said Darth Vader means dark father. That’s what he had in mind. No, Darth Vader was not expected to be the dad until relatively late. That was a stroke of creative genius. And that is the tale of Star Wars, that there are bursts of creativity that couldn’t be planned in advance, that there’s pleasure, I think, on the part of viewers and people in putting foresight and patterns on situations that have a lot of randomness in them.

And life is full of randomness. It’s related to what we were discussing before, where the idea is it was foreordained, kind of that. Star Wars would do great in the current circumstances that Obama would become president or Trump would become nominee. Not foreordained at all. A lot of random stuff. So if you see certain pictures of the moon from a certain angle – and this is the one picture I have in the book – you can see right there in the moon there are storm troopers. They are unmistakably storm troopers. It’s not like close, they might not be storm troopers. They are storm troopers if you look at them. But they’re rocks that just ended up being like storm troopers.

And people who devise conspiracy theories or who find patterns of foresight on the part of whoever, you probably conjured this in your talk. Yes, people say – or send you letters saying, OK, they’re smart. And with conspiracy theorists, it’s impossible to argue with them. They know more than you do. You’re not going to win. I’ve tried. And they’re like the rock on the moon. You know, Oswald was in this country at this time and then in this place. So probably somebody was behind Oswald who was – maybe there was something like that in the Oswald case, but you can always generate that account. And it’s pattern seeking.

MR. TANKERSLEY: What my favorite part of the book is the chapter about how Star Wars is really about fathers and their relationship with their children. We both have young sons. Your son is seven now, mine is nine. And I have this vivid memory of a rainy weekend when I just decided when mine was six, I think, to show him Star Wars for the first time. And we watched New Hope and he was like, more. And so – and so we put in Empire, we had a lot of soda, so I went – I paused the movie and I went to the bathroom. And I came back and Max is on his head, like, with his feet back up against the couch, his eyes squeeze shut, and his – he had reached out toward the TV. And I said, hey, what are you doing, pal? And he was like: Is it moving? (Laughter.) And it was like – I was like this is why I had children right here, this moment. (Laughter.)

MR. SUNSTEIN: It’s the best.

MR. TANKERSLEY: You talk a lot in this chapter about how the relationship between father and son are so important to the movie, and to those of us as we – as we consume the movie. Can you tell us that argument?

MR. SUNSTEIN: OK. So George Lucas has said: I’m a terrible writer. He said, I’m not very good with dialogue. He said, I don’t particularly like writing dialogue, which is probably why I’m so bad at it. In “Return of the Jedi,” which some people is the best movie in the bunch, and there is an argument to be made for that. And I think the argument is that the tale becomes a tale about fathers and sons. And the son believes that his father has good in him, even though is father is the worst person in the galaxy, except maybe for Emperor Palpatine. And then in the scene that is the culmination, Luke is almost going to the dark side and committing patricide, but says: You have failed, your highness. I am a Jedi, like my father before me.

That’s an extremely moving line. He’s talking about the worst person, basically, there is, who’s a Sith lord. And he says – he’s claiming the goodness in his father. I am a Jedi, like my father before me. That’s some kind of knock-out line. But Lucas surpasses it. His son refuses to kill his Sith father, identifying his father as a Jedi. And then the emperor starts to kill him. And Darth Vader is in bad shape. And the emperor is clearly wracking his son with pain. And his son is – he’s done. He’s going to die.

And Vader rouses himself to repudiate the causes of his entire life and to kill the emperor to save his son, showing at that moment the very form of attachment that earlier doomed him to the dark side, because he couldn’t bear to see his beloved die, that’s why he went dark. But it’s also what goads him to the light, is that the light attachment is the secret key to salvation. And that’s in defiance of what Lucas kind of tried to do, which is to write a Buddhist tale about fear leads to anger, anger leads to hate, hate leads to the dark side. Actually, fear of loss turns out to be attachment, and that’s what gets you to salvation.

And then there’s this dialogue scene when the father and son are talking really as father and son for the first time. And Vader says: Take off my mask. Let me look on you with my own eyes. And Luke says, but you’ll die. And he says – and he looks on his son for the first time with his own eyes. And Luke says: I’m not leaving father. I have to save you. And then Vader says, you already have. And that’s something, for a guy who struggles with dialogue. And his dying words are: Tell your sister you were right about me. You were right. And what’s personally so moving about fathers and sons, I think, is that, you know, if your dad’s still around and you love him, his soul is saved. That’s just a fact. And if you’re a father or get to be a father and get your kid to love you, it’s going to be fine.

MR. TANKERSLEY: It’s just an extraordinary part of the movie. But I think when we think about attachment, the beginning of the movie is just as extraordinary. I mean, here you have these rebels who destroyed the first Death Star, but then have been on the run ever since. And they are suffering these catastrophic losses. The Empire is massing again. They’re building another Death Star. And what do the rebels do? They, like, send all their most important people to, like, unfreeze a smuggler pilot on a desert planet. That makes very little rational, economic sense, right? It’s a very poor allocation of resources for the rebellion. (Laughter.)

But it comes back to what you were saying in the slides, about how human beings hate loss. And I wonder if there – I just read a column this week about how this helps us also understand perhaps some of the appeal – the Donald Trump “Make America Great Again” appeals, because he’s talking about something we had that was lost, for a particular group of folks. Do you – do you see that resonate?

MR. SUNSTEIN: Oh, completely. So good political actors, who are seeking change, are wise if they call on a past that they’re trying to restore. So Star Wars, you know, it’s kind of a cartoon, but it is the saga of our time. And thus it’s – there’s features of that that made that happen. One of which is the Republic – the people who want to restore the Republic, they want to restore the Republic. They’re the conservatives. They think we’ve lost our way, not we need something unprecedented and new.

And President Obama often says at the hard moment, that’s not who we are, which is a way of saying: We have a tradition here that we’re going to keep faith with. And President Bush did the same thing. President Reagan was, you know, a complete master of the restoration project, let’s call it, with the city on a hill frame, which was conservative in the literal sense. And so whether you like Mr. Trump or not, the “Make America Great Again” is within a traditional of political – what is it – self-description that Star Wars nails it. Martin Luther King was there, by the way. Said if we’re wrong, then the Constitution of the United States is wrong. He did not say we need something very new and unprecedented.

MR. TANKERSLEY: I want to get to everybody’s questions here in just a couple minutes, but please permit me sort of one deep and nerdy exploration of something here. And, sorry, this is a little bit of a curveball from what we were talking about earlier, but when thinking about the rebellion, I think it’s – you’re right, they are exactly the sort of conservative actors trying to restore something.

But when you think about the Empire and what they’re trying to do, they’re just trying to maintain power. And it is always fascinating to me that the way that they try to maintain it is by spending an enormous amount of money to build a big, floating, space, disruptive station, as opposed to just feeding people or nudging people. So could you have written a better policy program for the emperor? (Laughter.) Where it could have more cost-effectively held on to power than just by blowing up Alderaan? (Laughter.)

MR. SUNSTEIN: Yes, but I like to think that I would have declined the invitation. (Laughter.)

MR. TANKERSLEY: All right. Well, we’d be happy to take all your questions now. Thanks so much for your attention. And just – yeah, walk on up to the microphone and have at. I have more questions if you don’t.

Q: I’ll kick it off.

Q: First question –

Q: Oh, no, go ahead.

Q: All right. Well, I decided to kick us off with, you were talking about the special bond between fathers and sons. What about for women? How about Princess Leia and how she stands for a distinct form of feminism?

MR. SUNSTEIN: OK, great. So this is actually a terrific and very complicated subject. So I’ll give you what I like to think, though it’s a little more ambiguous. That Leia is in some ways the moral center of the original series, in the sense that she’s the leader of rebellion, she’s clear-eyed, she is not clueless, all of the men occasionally are, and she’s not – especially for the time, but even for now – she’s not a sexist stereotype. She doesn’t lose her head and she can shoot. (Laughter.) The one thing that makes it a little more complicated is that her probably most famous scenes she’s in a bikini. And in those scene’s she’s enslaved to in some ways a sexually rapacious, as well as repulsive – I don’t think the word is guy, but – (laughter) –

MR. TANKERSLEY: The word is Hutt. It’s fine.

MR. SUNSTEIN: Hutt. Hutt. (Laughter.) But notice if you would, and this is master stroke and I don’t know where it came from in George Lucas, that that scene, which is, from the sense of sex equality the low point of the original trilogy ends with Princess Leia strangling her captor with the very chain by which he bound her. Whoa. (Laughter.) And the strangling, by the way, doesn’t happen quickly. It’s a – you know, it’s a little while that she strangles him. He completely deserves it for every reason, so she’s doing justice there.

And if – you know, that stuff it’s hard to make up, if you were trying to make a statement about – some statement about something involving sex equality. That’s kind of the perfect way to do that scene. She’s the one who does it. No one protects her in that scene. She does it herself. So the Leia stuff I think is extremely interesting, way ahead of its time. And of course, the new movie, the hero is Rey. And she seems to be – it’s a little sacrilege here – but she seems to be potentially a better character than Luke, more interesting, maybe a better actor. (Laughter.)

MR. TANKERSLEY: OK.

Q: I’ll get up here and do it. I want to talk a little bit about your point that even the worst person in the galaxy there was some good in that person, and even arguably one of the best people in the galaxy there was some darkness. And now, of course, I’m going to relate it to kind of our political dialogue right now. And what I’m wondering is, so we have a political dialogue in which if each side is awful, according to the other side. And there is definitely within the population out there, both on the left and the right, there’s a lot of people who subscribe to that. You see that among individual people that’s a way of describing each other.

But there’s also, I think, a real kind of – people don’t like Congress, they don’t like Washington, they’re sort of phasing out on it. And what I’m wondering is, is it because most people actually do feel, A, that there’s good even in people that they don’t agree with? And second is, that characters who are purely bad and characters who are purely good actually aren’t interesting. And voters are phasing out of this because they’re saying this discussion does not interest me at all? It’s too two-dimensional. I don’t want to see this movie.

MR. SUNSTEIN: That’s completely great. There’s a lot in that. So in terms of the uninteresting nature of pure good and pure evil, William Blake, the great poet, said about John Milton, who wrote the greatest religious literature, I think, in the English language, Paradise Lost – said – this is Blake on Milton. Said the reason Milton wrote in fetters when he spoke of Jesus Christ and God and in liberty when he spoke of Satan is that he was a true poet, and of the devil’s party without knowing it. Pretty interesting, yes, about what poetry involves. A little too extreme, I’d say. And Blake didn’t – OK, so to have a purely good and purely evil that’s – it has to be complicated. And Star Wars complicates it.

In terms of the American people, well, we are in era – you raised so many points – we are in an era where there’s a sense often that people who have different political convictions are bad. And when I came here today I wasn’t sure what entryway to go in. And there was a not-young man walking with a young man. And I saw them at a distance and I walked up to them and said: How do I get in? And the not-young man was Senator Isakson. And I felt deeply embarrassed, both because you don’t ask a senator how to get in – (laughter) – and also because I actually know him. (Laughter.) And so he said, oh, Cass, you come with me.

And he’s a great friend. He’s a great guy. I mean, that guy – he is phenomenally great. And I worked in the Obama administration. And you know, I don’t know him super well, but he wants this jacket today, or this tie, he gets it. He’s just a great guy. And, you know, if you see someone that way and know him and see he’s a great person, I’m sure we all have – then to work with him on something, I would welcome that. Obama administration person or not. Probably my favorite senator was actually Senator Chambliss, who opposed my nomination, had a hold on it. (Laughter.) And we became great friends. I learned a ton from him about things.

And I think Americans like to see that and they like to experience that. And whether it’s that some issues are sort of technical or progress is so small on them, or whether they see antipathy rather than progress I’m not so sure. But if you deliver the goods – I think that my first suggestion would be, if you deliver the goods, then the American people be a little more upbeat. So it’s hard to think of, you know, if the recession had lasted five more years where would America be? But much worse than it is now. So for all of the polarization and disappointment, we’re not in a depression. And, you know, if there’s delivery in the next two years, then people will be much more upbeat, even if the TV show that is C-SPAN – that’s not what people want to watch. But at least they’ll have faith that good things have happened.

MR. TANKERSLEY: Another question? Yes.

Q: Hi. (Inaudible) – policy solutions. And I do a lot of thinking, you know, what’s the right kind of path for the real questions? And spending a lot of time with my kids watching Star Wars and Harry Potter. So, for my teenager, I have to say that Harry Potter might be the biggest saga of our generation as well, so there’s a little debate there. But that wasn’t my question. (Laughs.) Although we love both in our house.

One of my questions is about the force and what your thoughts are in reading all this stuff that Lucas has done, how that relates to whether that’s religion, whether that’s just goodness, whether that’s goodness within ourselves, whether that’s that bigger entity nudging us, what your thoughts are.

And second question is very different, is about what you were just speaking about, bipartisanship. How we can take the ideas you were just speaking about – bipartisanship, real problem solving, working together as really good people with other really good people, and make that – you called it a cascade of enthusiasm about that complicated but very really needed goal?

MR. SUNSTEIN: That’s great. An adequate answer to the second particularly would take longer than I’m going to give it. It’s great.

So I have a story on the second, which is about depolarization, working together. And the story involves – I think you work for Representative Issa? Didn’t you work for him? OK. So Representative Issa, I was testifying before his committee on regulation. And I did an opening statement which was basically about the regulatory lookback, which is about taking away regulations that don’t make sense. And I focused entirely on that. And then I got a note basically at 5:00 p.m. the day before the hearing saying that this is, you know, a violation of what he wanted. He wanted a discussion of the Obama administration’s regulatory record. He didn’t want cherry picking of the one thing that you think he’ll like. And he felt deeply distressed that I had done this.

So that would seem to me not to be a promising basis for a good hearing the next day. And he was the chairman of the committee, so if he felt that I didn’t deliver what he wanted, I basically stayed up all night – well, stayed up late, not all night – and wrote on my own new testimony and I got White House clearance to give it. And I came up to him at the beginning of the hearing and I said – I told him, you know, I’m so sorry the first wasn’t responsive. I have a new statement that responds to your letter. And you know, thank you for being candid. And it completely transformed the nature of the hearing. He knew – you know, I don’t know what you all think of him, if you work with him – with me he was fantastic. So he was not in agreement. It was substantive issues to be engaged. But he was a partner rather than an enemy, you know, part of the American system.

And what I found happened in that – I just did it because I felt he was elected and I wasn’t and I owed him something that he would find responsive. But I think what he thought is, you know, here’s a guy who worked for the Obama administration, which I don’t like very much, but he’s treating me with respect. And that made a huge difference. So I had a very good working relationship with him. So I think there’s probably a lot of opportunity to do that that people don’t take advantage of. I could have gone with my backup and said, you know, this the regulatory thing we’re working on how and we’re most proud of, and here you go. And he would have hated that, and it could have easily been a very form thing.

On the force, Lawrence Kasdan, the coauthor of several of the movies, said actually very recently the greatest line he ever wrote was in Indian Jones, when someone said to Indy, what’s your plan? And Harrison Ford exclaims: I don’t know. I’m making it all up as I go along. (Laughter.) And then Kasdan said – he went on a rift – this is just an interview very recently. He said: It’s the greatest adventure you can have, making up your own life. He said even at my age – he must be 70 or something – I don’t know what I’m going to do the next hour, let alone next day. And he said, that’s it – that it’s an infinite possibility. And he said, it’s the life force.

MR. TANKERSLEY: We probably have time for, what, one more?

Q: One more? OK.

MR. TANKERSLEY: Yeah, go ahead.

Q: There was a strange scene in “The Phantom Menace,” just to kind of pick up from the last question about the force, where –

MR. TANKERSLEY: Did not see a “Phantom Menace” question coming. (Laughter.) Excited to see where you’re going with this.

Q: – where Liam Neeson, or Qui-Gon Jinn, tries to determine the force in Anakin, and he takes, like, a blood test. And then he says he has, like, a lot of midi-chlorians, and this guy has a lot of propensity to the force. And it seemed to me kind of, I don’t know, incongruous in many respects that, you know, to me, when I grew up with the – you know, saw the – when they had the movies out in the movie theater for, like, a year, when I first saw Star Wars, that they could – you know, the force was a mystical thing, but in fact it was just, like, a blood test. And it kind of didn’t seem like something that was even learned, or maybe you had it but then you could enhance it. But how do you kind of explain that incongruity right there?

MR. SUNSTEIN: Yeah. So one thing that surprised me in doing, you know, the most unlikely research for this unlikely book – and I did a lot of research – I’m embarrassed about that – (laughter) – is that George Lucas had the midi-chlorians idea really early on. So in the ’70s or ‘80s, I don’t remember, but at least a decade before we had midi-chlorian-gate, what you’re referring to – (laughter) – midi-chlorians were in his head. So that one he did figure out at least long in advance. But I agree with you that it reduces the mystery of the force and gives it a biological source. And in the world of “The Force Awakens,” there’s not a lot of midi-chlorian talk. It was a misstep.

MR. TANKERSLEY: Well, I’d like to thank you all, and thank Cass Sunstein, and thanks everybody for having us. This has been great. (Applause.)

MR. KESSLER: Thank you. I said we were going to have fun and we were going to learn something. And we did have fun and we did learn a lot. And you know, I want to say one – for folks here who aren’t parents yet, one of the best things about being a parent is you get to relive a lot of the things that you watched when you were younger in another person’s eyes. And it leads you to a whole new world of discoveries and insights. And it’s so much fun. And the question we had there with Harry Potter as the saga, that goes back to Beatles and the Stones, with Harry Potter and Star Wars and Beatles versus Stones. And that’ll be a debate for maybe next – our next meeting.

But thank you so much to our guests, Cass Sunstein and Jim Tankersley. And I’m supposed to – forgot to say, Josh Freed wanted me to give you crap because you’re an Arsenal fan.

MR. SUNSTEIN: That is true also, yes. (Laughter.)

MR. KESSLER: Thank you so much for coming. (Applause.)

(END)