In a recent edition of the Walker Webcast, I had the opportunity to sit down with Katherine Gehl for a chat. Katherine is the founder of the Institute for Political Innovation, a nonpartisan, nonprofit organization designed to catalyze modern political change in the US. She founded the institute in 2020 after co-writing The Politics Industry: How Political Innovation Can Break Partisan Gridlock and Save Our Democracy.
Here are some of the key takeaways from my conversation with her.
Over the course of recent US history, there has been a major shift in political power to the majority party within the House of Representatives. The Hastert Rule, also known as the “majority of the majority” rule, is typically followed by the Speaker of the House. According to the Hastert Rule, the Speaker should not allow the House to vote on a bill unless a majority of the Speaker’s party supports the bill.
The Hastert Rule has given incredible power to the House majority, as many bills never receive support from the House majority. This means that most proposed bills never even come to a vote. While the role of Congress is to represent the country as a whole, this unofficial rule gives the House majority tremendous power.
Gehl contends that the Hastert rule can be used to effectively hold bills hostage. For instance, in 2013, Congress needed to raise the debt ceiling to keep government offices open. A bill to do so was proposed; however, it was not put to a vote because less than half of the majority party supported it.
After 16 days of gridlock and a lengthy government shutdown, the Speaker of the House at the time, John Boehner, decided to break the rule and allow the house to vote on the bill. This particular gridlock and associated government shutdown cost US taxpayers roughly $24 billion.
Gehl assured that the Hastert Rule is just one example of a flawed political system — a system designed to protect the jobs of politicians rather than to represent the true will of the American public.
Final Five voting is an innovative system to elect our political leaders. As of today, in most cases, only one Democrat and one Republican are able to advance past the primaries into the general election.
With Final Five Voting, the five most popular candidates advance into the general election (regardless of political party affiliation), allowing for a broader pool of candidates for a given office. This keeps voters from dealing with the “lesser of two evils” predicament in which they often find themselves. Instead of having just one candidate from each party, voters are able to choose from a range of candidates from different parties with a final five voting approach.
Final Five Voting also puts pressure on politicians to produce results in line with voter sentiment rather than simply maintaining the political status quo. Gehl makes the point that introducing real competition into the political process would produce better results overall, much like introducing competition in business, which leads to more innovation and better products.
Every week, I have the pleasure of chatting with some of the most prominent thought leaders from a variety of industries, from real estate to politics and virtually every industry in between. To to see the full-length interview with Katherine Gehl or to browse the full library of content, watch the Walker Webcast.
Willy Walker: Good afternoon, everybody. I am in snowy Colorado and very, very excited for this discussion with Katherine today. Let me do a brief introduction of Katherine and then we will dive into our discussion.
Katherine Gehl is the founder of the Institute for Political Innovation, a nonpartisan nonprofit founded in 2020 to catalyze modern political change in America. Katherine is the originator of Politics Industry Theory and author of “The Politics Industry: How Political Innovation Can Break Partisan Gridlock and Save Our Democracy”, which she co-authored with Harvard Business School professor Michael Porter.
A veteran of public and private sectors, Katherine is the former president and CEO of Gail Foods, a $250-million high-tech food manufacturing company based in Wisconsin that she sold in 2015. In the public sector, Katherine served on the Board of the Overseas Private Investment Corporation (OPIC), the U.S. government’s development finance institution. She’s on several nonprofit boards, including Unite America, New America and Business for America, and is an active philanthropist. ’She is also the honorary co-chair of the National Association of Nonpartisan Reformers and the co-founder of Democracy Found.
So, Katherine, let’s start here. I know the book was your idea and if you will, recruited our mutual friend Mike Porter to come and write it with you. You self-describe yourself as an orphan Democrat, centrist, independent, which makes two of us. But tell me a little bit about going from the private sector and having run a very successful business and what really pulled you towards this mission and how you and Mike came to write this great book.
Katherine Gehl: Thank you, Willy. I’m so happy to be here. So, yes, I had my career and my food manufacturing company that I loved so much. And yet now, as you heard, I seem to be a one trick pony on things to do with democracy in America – that’s the core of what I do.
In 2015, I sold my business so I could do this work full time. And where that came from is really what I describe in my book is the five stages of political grief. And I'll just run through them really quickly, which is as a citizen, as a business leader and as a parent, I cared right deeply about our democracy. And so, at first I thought, “Oh, I'll get involved with candidates and, I won't just vote, I'll actually support good candidates.” And so, I did that. I was at that time supporting Barack Obama for President. He's someone I had known for many years, and he went to the White House, and I was super disappointed with how things unfolded after that when I looked at Congress. And I thought, “Wow, here we are, massively polarized.” It's not about just the presidency. Congress has a huge problem. So, I said, “Oh, I won't do candidates anymore. I'll do culture.” You know, like people should work together. So, I got involved with this organization called No Labels, where everybody says they want to be past partisanship. But then I was like, “Oh, well, they say that, but then they all vote the same way and do the same things.” Hmm. Second stage. “It's not culture. I know – I'll do policy.” So, I got involved in the debt and the debt and deficit are a huge issue for me. I got involved in the CEO Fiscal Leadership Council for Fix the Debt. And then after a while, I said, “Oh, everybody knows the broad outlines of the policies that we need, but nobody will vote for it.” Okay, It's not policy. So, I know I'll do candidates again, but this time I'll do candidates that are independent and they're not beholden to the Republicans or the Democrats. And then I said, “Oh, they can't get elected.”
So finally, it became clear to me, thanks to a former congressman named Mickey Edwards, that ‘it's the system stupid,’ is how I would put it. Remember Bill Clinton's 'It's the economy stupid'? So, it's the system stupid. I'd always been a systems thinker in business, you're probably a systems thinker yourself, as are many of the watchers. And I can't believe it took me that long to see it for politics, which is to say the rules of the game create the incentives that drive the behavior that deliver us what we're getting, and that the problem is in the system, not where we think it is with the people, the policies or the culture.
Willy Walker: And so, given that framework, if you will, how did you come to talk to Mike Porter about this and take his Five Forces Analysis and apply it to the industry of politics?
Katherine Gehl: I was still at my company, and I ran a classic business strategy project in 2013, and I had Michael Porter as our consultant. So, while we were doing this strategy project and revisiting all of the Five Forces that I also learned in business school, of course with Michael Porter right in front of me, I was super interested in how to help my business succeed and sell more cheese sauce, essentially. But I was running a parallel analysis in my head, like this half of my head was looking suddenly at the politics industry. So, when you look at the Five Forces, you're talking about who the rivals are. And I'm like, “Oh, there's only two. There's Democrats and Republicans, it's a duopoly.” And then you're looking at who can enter the market to compete against you. And I thought, “Oh my gosh, in politics, nobody can get into the market. There are super high barriers to entry for any new competitors.” And I started thinking about things like huh – in any other industry, like in my industry, if I had only one competitor and we were making our customers so unhappy the way Democrats and Republicans basically have massive unhappiness, if you think of Congress as 90% disapproval rating, if it were my industry or probably yours, new competitors would come in to give the customers what they want. But that never happens in politics, which eventually led me to realize that these two rivals in the duopoly work really well together in one very particular way behind the scenes, and that is to rig the rules of the game to protect themselves jointly from new competition. When there's never any new competition, there's no incentive to do what most of the customers want you to do. And so, what we have is a situation where our two rivals in politics are doing what it takes to succeed in the current rules of the game. But if we change those rules of the game, we can change how those businesses need to work so that in order to be successful, they actually have to please the majority of November voters, shall we say.
Willy Walker: So, there's so much in the book that I want to cover here, and there's so much not behind the scenes, it's just more of a historic perspective of kind of how we got to where we are that I want to dive into a little bit. There are all sorts of neat things that you talk about the House Ways and Means Committee and the Rules Committee and how things have changed to make it so that it's a very sort of Party-dominated, speaker-dominated House of Representatives today.
But let's back up, because you and Mike focus on the Gilded Age and the 1860s to the 1900 timeframe and basically say we've gone through this cycle before. You lay out very clearly, Katherine, how at that time there was immigration that was threatening people's jobs. So, there was, for the first time ever, legislation passed to stop Chinese immigration into the United States. And you talked about all sorts of actions, if you will, of consolidation of power, money in politics, single party control, the robber barons at that time who really were able to control the political system, all these types of things that we are seeing today and also kind of a trend towards authoritarianism during that period of time.
Talk for a moment about the parallels there. And then what I really want to get to is how we got out of that, because you explain that. But I think as I sit here in today's world, I say, okay, I get it that we've been through this before, but what was it that got us out of it?
Katherine Gehl: Yeah. And that is the reason we put it in the book was much less about the parallels for today and more about how we got out of it. But indeed, it is shocking that there was this time period about 100 years ago when the country was confronted with much of the similar forces at work that we regularly decry or blame today. The important thing to know about that, I think, is less the specific details, although please do get the book and read it and more the fact that our country has been less. Our trajectory and our suspected future, let's say, has been less clear at multiple times in our history. It hasn't been this “Oh, we found it. We won the war and then got our amazing Constitution.” It's kind of all been up from there. We've really had to figure out how to govern underneath what the Constitution gives us at multiple times. That the Constitution itself is super short, right? I think I have my pocket constitution over here somewhere. Yeah. So, you know, it fits in a pocket. That's the whole point of the pocket constitution. And so, it's the rules underneath that that we make up and that we had made up a hundred years ago in the Gilded Age that can distort the day-to-day business of actually managing a country within these freedoms and values given by our Constitution. And that's been in trouble, and the people had to take it in hand that it was their democracy and insist changes be made, that really delivered power back to a majority of people instead of dividing up what I call the “spoils of power” among those in power.
Willy Walker: So, one of the key things that as you talked about everything from what when they did the Cannon Reform of 1910, I guess it was. But prior to the Cannon Reform in 1910, you talk about journalism and about the newspapers and the change of the newspapers from being controlled essentially by the robber barons to being muckrakers and finding out all the corruption that existed in the system. I think one of the things that you and Mike underscore so well in the book is that cable television right now has really added as this massive catalyst to the polarization of America. So, if I go back to your explanation of how things turned, one of the key catalysts was the media, if you will, or newspapers, do you think we can get either out of cable news or get some type of media that's going to turn us out of this hyperpolarized world that we live in today?
Katherine Gehl: Super great question because there are so many causes that reinforce each other in delivering our dysfunctional politics and therefore dysfunctional, disgruntled, and dissatisfied body politic. And they create what a great political scientist named Lee Drutman calls the ‘doom loop’ of our current politics. So back then if you think there was a doom loop then as well. You're correct. The media started to change. Whenever you disrupt something in any kind of a system where this begets that begets that. Then you change the dysfunction of that, right. You sort of divert the train to another track. And the media started that. I don't predict that the media is going to start that now. I believe that anywhere in the doom loop, if you could change something, it could be the disrupter. But one of the things that I focus on is always being completely rational and realistic about what things we can change. I actually don't think we have a lever to pull to change the media and have it start from there. I believe that when you change some other things in the system, over which we do have power, then the media will adapt to a business model that can support the kind of healthy political environment that I would envision. But we're going to have to interrupt it in a different place.
Willy Walker: As I was reading your book, what I found fascinating was it wasn't until 1913 that the U.S. public actually elected senators to go to Washington to represent their states, that the 17th Amendment actually gave citizens the ability and took it away from the state legislatures as it relates to sending senators to D.C.. Then you also point out just another kind of interesting stat, and I'd love to hear any other ones that you found as you were researching the book. But the other one was that we talked about gerrymandering today and how we cut up these various districts so that they stay either deeply blue or deeply red. And I had not known that back in the day, Dakota was split between North Dakota and South Dakota so that the Republicans could have two more Senate seats kind of guaranteed by splitting the state in half. I didn't know that's how we got to South Dakota and North Dakota.
Katherine Gehl: Yeah. Look, some of the interesting things to know is that there's always been and there always will be an effort by any players in any industry to affect the rules of how things work in that industry to benefit them. Instead of pretending it shouldn't be that way, we need to understand that it's a human motivation and has a good side to it, which is its competition to get better, etc. as long as competition also holds companies and actors in check, shall we say, which is what we don't have now in politics. So gerrymandering, not only has the players in politics always been thinking about how the creation of new states would affect the balance of power, and then there are deals made about that. But gerrymandering itself, the drawing of districts, dates back to the beginning of our republic.
The word gerrymandering, which I think most of your listeners know, politicians sort of pick their voters by drawing their districts rather than voters picking their politicians. That is named after Elbridge Gerry, who might have been the first governor of Massachusetts, and he drew a district that looked like a salamander in order to get his party the advantage. And so that became called a gerrymander. And hence these hundreds of years on, we're talking about gerrymandering. So that was the rule from the beginning, and then the other one that really people need to understand is party primaries was part of what came out of the reforms from the Gilded Age. So, we got this direct election of senators. But then in Wisconsin, my home state, we actually also had this idea that wow, candidates are being picked in backroom deals in the proverbial smoke-filled rooms. Those are the candidates that sort of usually glide to victory. So even though people are voting, they're not really having much say because the deal has been made. So how about we have these party primaries where it's not a few party people in a smoke-filled room picking the candidate, but people will pick the candidates of the parties and that would make things better. So, the idea was there that it's about giving voters power.
It turns out, as you know, and we'll discuss here, I'm sure that party primaries have had dramatic, unintended consequences. They're actually at the core of our problems today of voters actually not having power. And sometimes that happens when you change the rules, they have unintended consequences. Or what usually happens is over time, the parties will optimize around them if we're not paying attention in ways that create the negative consequences.
Willy Walker: One of the things I really love about the book is that you dive into, if you will, the data behind the disaffection, the disappointment in politics. In other words, rather than just saying, yeah, there's only a 10% approval rating of the job that Congress is doing, and that is going to tie into what they did in California and for the data that comes out of how they change their primary system. But we'll get to that in a bunch.
But not only is it only 10% approval rating, but then you go when you show real data on America in decline and the fact that because we have national political infrastructure that is doing nothing, this gridlock is actually hurting us every single day. And you put in a ton of stats on American competitiveness, what are we 32nd in access to drinking water and a bunch of other things that are just, you know, for a country with as much money and resources that we have – the richest country on the face of the planet, to have our competitiveness be going down at such a dramatic rate. At some point, the body politic has to say, “Stop, we really need Washington to do something.” But you also show a graph, Katherine, that I find to be incredible, which is that in 2004, you really had Democrats and Republicans title affiliation of 34% of the voting public there. Of Democrats, 34% Republican and 31% Independent. And then over the last 15 years, you go to 2019, those numbers have gone to 28% Republican, 30% Democrat, and 41% Independent. So, the voting base is actually kind of being disaffected by the two-party system. And yet exactly back to your analysis, so the customer isn't getting their needs met by Washington. And yet, at the same time, the old system is still in place. And it's just fascinating, the data that you have about American competitiveness going down, where the consumer is saying, I want more. And at the same time, they're also starting to identify as independents at numbers that we've never seen before.
Katherine Gehl: Yeah, and we don't really know most of these things are happening, and I'm not even sure the media really knows that this is happening. Let's give another example that isn't in the book, but just in a pop quiz kind of way, because you clearly know all the data in my book. So, Alaska is a red state, right? So, what's the percentage of Alaskans that are Republican?
Willy Walker: I'll swag it. You said it's a red state – I'll say 78%.
Katherine Gehl: It’s 24% and the Democrats are 13%. So, it is more red than blue, but everybody else is an Independent. Yet we can only see that states are red or blue, even when they're not any of that. By the way, the Republicans then sort of think they own Alaska, right? Because it's red. And Democrats think they own states where there's a plurality of Democrats. But why should they? The voters in that state, which consist of Democrats, Republicans, and Independents, should be the ones figuring out who wins, which is why we need to make sure that November elections matter. So, things are not how we think.
Could I give one example, just a good story that also might relate to the functioning today? Just to bring some life to this idea that what we think is wrong with politics and what's going on is not usually what's really going on. So, you know we're going to have this debt ceiling fight now?
Willy Walker: Right.
Katherine Gehl: There's another fight that we often have, which is over appropriations, whether we're going to actually pass the budget to fund the government. And then if we don't, we have a government shutdown. So, these are similar kinds of fights, which is if one party's in charge, then they don't want to have the shutdown, but the other party does, and it kind of can go back and forth that way.
So go back to 2013, this was one of the major government shutdowns. It was a 16 day one and it shut the country down for these 16 days and it was terrible. But here's the thing that nobody reported on – then or really since, that government shutdown didn't ever have to happen and it could have ended from day one if, then Speaker John Boehner, the Republican, had allowed a floor vote on legislation that had already been passed by the Senate that was supported by a majority of the members of the House, which is to say virtually all the Democrats plus a good number of Republicans, but a minority of Republicans. And in fact, that shutdown ended only when Speaker Boehner broke with his party and broke the Hastert Rule, which I'll tell you about, to allow the vote.
So, the Hastert Rule is something back then nobody had heard of. It's getting a little bit more play right now. But the Hastert Rule was a rule started by Speaker Denny Hastert from Illinois, and it's named after him. It's not written down anywhere. But what it says is the speaker of the House, so previously, Nancy Pelosi, now Kevin McCarthy, will not allow the House of Representatives (that's supposed to represent all of us) will not allow the House to vote on any bill unless a majority of the majority supports that bill, which is to say a majority of the Speaker's party. And regardless of what the public wants or what the House wants, they just don't even vote on it. So even an election that's supported by a majority of the country or majority of the House has virtually no chance of passing because there’ll never even be a vote. They'll never even be a vote in our democracy. And that's what happened in 2013, as there wasn't a vote until 16 days in John Boehner said even though a majority of the majority, the Republicans, don't support it, I'm going to allow this vote because this has got to end. Then it ended and effectively this made-up rule that nobody talks about cements majority party control in a legislature that's supposed to represent all U.S. citizens. And in this case, it allowed a small number of extreme partisans to hold this country hostage in a shutdown for 16 days that cost us billions of dollars, and 90% of the country never wanted it from the beginning. That's how we're running. So, we shouldn't be talking about, “Oh, we disagree about these things.” We should be talking about why we're not going to have a vote on things that could pass if we allowed things to pass in a bipartisan way. And nobody wants things to pass in a bipartisan way.
Willy Walker: The two numbers out of that example that struck me was a) the calculation is $24 billion is what it cost the United States of America to shut down the government for that period of time. $24 billion, over $1,000,000,000 a day. And b) the other is that 90% of the American population didn't want the government to shut down. So, they're 10% of hyper partisans who say shut it down and don't pay a bill and whatever else.
Katherine Gehl: And we acted as if it's normal that one person could stop us from voting on it?
Willy Walker: One of the things that's interesting about that is that you talk through, and I don't know to what degree we ought to go into too much painstaking detail because there aren't that many political nerds out there like me who really, really enjoy getting into the minutia of this stuff. But generally speaking, Katherine, talk for a moment about how this consolidation of power into the controlling party in Congress really started during the era of Tip O'Neill. So, the Democrats started the process where they started to basically, rather than having a tenure and seniority structure for chairmen of various committees, that then was taken from the Ways and Means Committee and went to what is it, the House Strategic Planning and some other committee that the chair of the Speaker of the House controls. Therefore, the chairmen or women of various committees were then appointed by the Speaker of the House consolidating power in the party that is in power. And during that period of time, there was a big reorganization of Congress that said that if you hold that speakership, you have control of the House, and then it kind of went on steroids when Newt Gingrich got in in the mid-90s, where he came in and filled up committees with people who were freshmen congressmen and women who'd come in on his Take Back America strategy. He put in some chairmen and women of various committees that were very hyper partisan, and a lot of people put the partisan nature of Congress today at the feet of Newt Gingrich. But from reading your book, it's very clear that it was bipartisan in kind of the grab for power that now makes it so that when you got the speakership, you control everything. How do we get out of that?
Katherine Gehl: Let's reinforce one thing you just said: All the problems in our existing democracy that emanate from structural rules were created over time by bipartisan action. It's been, in most cases, a step down, like one party ekes out a certain advantage, kind of pushes the envelope here, and then the other says, what? You did that now I'll do this. And it just keeps going like that. And we're usually the public not paying attention, which is why you can end up with this Hastert rule. And this here's the step down on the Hastert rule. So, remember, I just said the Hastert rule is the speaker won't allow a vote unless a majority of the majority supports it. Now it's turned more to the speaker will not allow a vote unless they can pass it only with their party.
Willy Walker: Right.
Katherine Gehl: Only with their party! And so that's the step down that's happening and that's what we should be writing about when this debt ceiling thing comes up. It's not just focusing on the recurring problem and that it's jointly both parties at fault.
Willy Walker: And one quick thing. You show some great graphs in your book about going back to the Highway Bill, 1956, I think it was, and the Highway Bill was fully bipartisan. And you show in the graphs of the voting of Democrats and Republicans, and then you get to all major legislation that we've seen in the last decade, and it is hyper partisan. In other words, there's no vote for anything unless it is passed by the ruling party. And you see this graph and look at it graphically where you've got sort of, if you will, black and white on these bar charts that are perfectly in the middle, a 50-50 bipartisan on really important things. And then you get down to the Affordable Care Act, you get down to the Trump tax cuts, and you just see that the Affordable Care Act was all Democrat, and the Tax Cuts and Jobs Act of 2016 was all Republican.
Katherine Gehl: But there's one exception that we should point out. There is absolutely a time when we can guarantee bipartisan action – and these are the conditions. You have to have a crisis, it's either a national security crisis or a natural disaster crisis and both parties have to agree, and they'll put it on the credit card. So, here's what I mean is: they'll pass the funding for COVID because it's a disaster for the country. And they will make sure it just goes on the national debt and they don't cut anything to pay for it. And they agree not to tell on each other. Then they both get to say, “We did this great bipartisan thing in this moment of crisis.” And we do that when we go to war, we don't pay for that. We do that when we give relief to hurricane states, which I'm not saying you shouldn't do those things. What I'm saying is: the bipartisan action along with getting it for free for us, but not for our children, is when you're going to get bipartisan action. And then they'll trumpet that. Anyone can make a lot of deals if things were free. Okay. I mean, couldn't you? I could deliver a lot of things if things were free? And so, they're tricking us that way. There is no party of fiscal responsibility anymore because neither of them is incented to talk about that. And yet they're going to talk about it when they don't want the other side to sort of do something that is traditionally the other side's ideology, then they'll care about the debt.
Willy Walker: Talk for a moment as you talk about Boehner to continue forward and put the Hastert Rule to the side and keep the government going. As we know, Boehner didn't last long as speaker of the House after he did that. You raise the example of Mike Castle from Delaware, which I thought was an unbelievable example of how messed up our primary system is. This will lead into some of the reforms that you and Mike put but put forth. But talk for a moment, Katherine, about Mike Castle when Joe Biden became vice president of the United States after being a U.S. senator from Delaware for 32 years before he became vice president.
Katherine Gehl: That is a great story. And once again, it's not the story that got written. So, here it is. Joe Biden is no longer able to serve as the senator because he's the vice president. So, they now have an election for the new Senate seat, and I am told that everybody in Delaware knew who was going to be the next senator from the state of Delaware, and it was a man named Mike Castle. He was a multiple-term governor, termed out as governor, and a multiple-term congressman. He was the most popular politician in the state, a Republican. So, he ran in his party's primary, and he lost – and that was super shocking, but it's a low turnout primary. That was when the Tea Party was starting, and so he lost to a woman named Christine O'Donnell and there were only like 30,000 votes in that primary in the state of six million people. And he lost because with low turnout, even those most popular politicians. What's pretty rational is that he could have put himself on the ballot in November as an independent, and he didn't get the Republican nomination and he would have won. Beating both the Democratic nominee and Christine O'Donnell, who was probably the nominee. But of course, we've never heard of Senator Mike Castle, have we? No, because there was this problem, which is that Delaware has a pretty odd law and it's called The Sore Loser Law. And what that means is that if you run and lose in your party's primary, Republican or Democrat, you are not allowed to have your name on the November ballot when everybody's going to turn out – no matter what November voters might want – you cannot have your name on that ballot for them to choose from, which is how the parties control access to the ballot. So, Mike Castle couldn’t put his name on there, and therefore we have I think it's Senator Chris Coons, Democrat, because he beat the Republican.
The question is: How many states have what seems to be a massively undemocratic kind of law, right? How many states have that law?
Willy Walker: 44.
Katherine Gehl: Yes. And it used to be 46, but it's been changed in two states. If you recall, there was a kind of a similar situation where Senator Joe Lieberman lost his party primary for Senate and then he put himself on the ballot in Connecticut as an independent. And he won proving that’s what the voters in Connecticut wanted, and that's because Connecticut was then one of only four states that didn't have a Sore Loser Law.
Willy Walker: It's unbelievable.
Katherine Gehl: So that's one reason why independents never have any choices, there's lots of them. But the parties have colluded to make sure that happens all around the country.
Willy Walker: The Sore Loser Law, the Lieberman example as well as the Castle example – they make your jaw drop. They really do. And you make the point in the book that the voter turnout of only 20% of registered voters show up for these primaries. And so, as a result of that, you get very small turnout, it's hyper partisan. And every single candidate who wants to play any kind of a centrist role. I mean, the whole reason that Castle was sort of turned on by his party was because he'd come out for the bailout of Wall Street in the great financial crisis. I mean, he'd done all sorts of great things throughout his nine terms in Congress to show that he was an amazing Republican and he'd done things with George H.W. Bush on education reform and all sorts of things. And as you said, he was the most popular politician, more popular than Joe Biden in the state of Delaware. Yet he gets primaried and then they lose, and they don't get their person to Washington. It makes zero sense!
Katherine Gehl: Yes, you might also remember Eric Cantor, who was the number two Republican in the House, and he got primaried out by a Tea Party candidate, in part because all the Democrats didn't consider him to be really bipartisan. He was accused of having worked too much with the other party to solve difficult problems. So, if we penalize that problem solving behavior and if we penalize getting sustainable deals on big issues, which would require a consensus way forward, so we don't just careen back and forth repealing and replacing things. If you can't get reelected by doing those things, then you're not going to do those things. That's why we don't solve our problems in the bipartisan, sustainable consensus way, which we know the outlines of behind closed doors. So, if I could update though, my data for you, because it's worse than I said in the book.
Willy Walker: Ha! It can’t be worse!
Katherine Gehl: Nothing got better.
Willy Walker: I got really optimistic that back when Lieberman did it, there were only four states who didn't have the Sore Loser Rule. And then it's now down to 44. So, they're actually six states that allow you to run in there. I thought we were heading in the right direction. You're not going to turn it around and say, no, it's like 49 states.
Katherine Gehl: Well, I'm not going to talk about the Sore Loser Law. There's fewer because now Alaska has the system I'm going to be proposing here today, for example. But let me talk about something more critical.
So, Election Day is in November, right? But here's a date no one talked about this year that was a huge, huge consequential day, and that was September 13th of 2022. Because on that day, there should have been big headlines in the newspapers saying: Announcement 85% of the U.S. House chosen decided game over election done, and 65% of the U.S. Senate chosen game over all done because September 13th was the day of the last party primaries in our country. And in any seat that is safe red or safe blue – we always know that whoever wins that party primary is guaranteed to win in November. That's what a safe seat is. And so, we're sort of numb to this, we don't really notice it, but let's bring it forward. As of that date, the majority of the House and Senate were chosen again, over 85% of the House and only 8% of the American public had voted in those party primaries that shows those 85% of the House winners, only 8%. So now, doesn't that seem crazy and undemocratic? Yes.
But here's the problem that's even worse that we need to care about is that when Republicans are elected by 8% of voters who turn out in these low turnout summer primaries months before all voters show up, and Democrats are elected by 8% over here – these are the only customers to go back to thinking about this is an industry. These are their only voters. The only customers that these representatives can really afford to consider when they're deciding how to act and how to vote when they're in Congress, when they're serving. Because these are the bosses, these are the people that give them their jobs, and these are the people that are going to take their jobs away. And while you might think that this 8% and this 8% could not be more different from another because they're right and left, they're actually virtually identical in one wildly consequential way. And that is that these eight percent are characterized by what political scientists call “negative partisanship.” Negative partisanship means that you are motivated far less by how much you like the ideals and policies that your party is promoting and much more you're motivated by how much you hate the other side. So, when people hate the other side more than they care about any accomplishments ideologically, they actually like to see these fights. They like to see the other party lose. They prefer, in a sense, gridlock to solving a problem where you'd have to give something up.
Look, I'm a party primary voter. I'm sure you vote in primaries. I'm not denigrating party primary voters, I'm just saying that the fact is that when only 8% of the country controls the behavior of the majority of our House and Senate, what we've got is what we're going to get.
Willy Walker: So, let's go to your solutions, because they're interesting and they open one's mind. And the first is the Final Five. And so right now in the duopoly structure, moderates need not apply. There's no space if you can't pick up the part of your 8% that's going to vote in the party primary and get to exactly the points that they want, no point in showing up. And you give great examples of really talented people who show up and they get the “Oh, you're too centrist or we're going to lose if you come in because you're going to take votes away from the Republican or the Democratic candidate.” So, all these great moderate candidates, you talk a bunch about Ross Perot. The fact that him getting 19% of the vote did all of us a great favor to at least say and Ross Perot was distinct. He had a ton of money. I saw his son yesterday in Washington and we talked a lot about his dad. And, you know, Ross Perot was that light of an independent candidate. But even Mike Bloomberg, with all of his wealth and all of his track record as mayor of New York, did not in any way I mean, he obviously tried as a Democrat, but he had no avenue as an independent with his billions. And I mean, he had a lot more money than Ross Perot does. But Ross Perot was at the time the perfect person. And there are plenty of people who also blame Ross Perot for giving the presidency to Bill Clinton because they thought that George H.W. Bush would have won that reelection had Ross Perot not gotten into it. And so, he was a pariah with Republicans. Even the Ross Perot saying, I like ideas on both sides. With all that said, your ideas on Final Five, talk for a moment about why Final Five would change the primary system, and then we'll get to what you want to do in the general.
Katherine Gehl: Yeah. So, if I could once more just back up for a moment before I talk about Final Five and talk about what we're solving for. So, I do have a solution, but I want to make it clear what is the solution to.
So as much as I do believe that a consensus is the way forward, oftentimes, well, almost always need some moderates and centrists to be forward. And oftentimes, you know, it runs that way. I'm not solving for that moderates are like the only good kind of politician. Innovation rarely comes from a consensus middle; it comes from fringes at the time. We wouldn't have the civil rights movement if the only kind of leaders we elected were people who were at the exact middle of where current public opinion is. Leadership isn't necessarily there. So, we do need moderates and we've rendered them extinct in our existing culture, but that's not what we're solving for here. We're not solving for who needs to win, we're solving for what any winners, regardless of what party or ideals they come from, what winners need to do, what actions do they need to be incented to be taken in order to actually solve problems in the interest of the broad public interest and a way forward for the country as a whole.
So, what people would need to do if you're trying to solve complex problems with tradeoffs, and that's the only kind we have because even our crummy system would solve our problems if they were easy. So, think of the tradeoffs involved in immigration or our national debt or national security, entitlement questions, climate change or anything people are concerned about. There are trade-offs. So, what you need to do to solve those kinds of things is have our legislators talk to each other. They'd have to come up with possibly some innovative way forward, and then they'd have to negotiate. Maybe this, maybe I could trade you that, maybe we could reach agreement on these things. And they'd have to make a deal. And then they'd have to be able to vote yes on that deal. Which means that they would have to believe that they had a way to reelection if they voted yes on the negotiated deal. And we don't see those kinds of actions in Congress today, because those actions pretty much guarantee a loss in your primary. So we're not trying to elect and here's the best way I put it, if we could choose right now, you and me, Willy, that we could find the smartest person in the world to give us all the perfect people to be in our House and Senate, and there would be choice a) all perfect people, but keep the rules of the game the same and of how they get reelected the same or b) we could keep all the same people and change the rules of how they're going to get reelected to make sure they can only get reelected in November, not in low turnout party primaries – which would we do for the good of the country? I'd pick B in a heartbeat.
Willy Walker: Right.
Katherine Gehl: So, what Final Five voting does is it changes the rules of how people get and keep their jobs to create a connection between taking those kinds of actions and voting yes on these kinds of solutions dealing with trade-offs on complex problems and the likelihood that they'll get reelected. So, we're not trying to take self-interest away or say you should just do the right thing. We're trying to say doing the right thing will actually increase your chances of reelection instead of guaranteeing that you lose your job. It's the most obvious thing that needs to be done in the world. You never have your businesspeople do the things you need them to do, and that's how they get fired. It would be the opposite. So, Final Five voting is the one name for two changes to our election system.
The first change which you were referring to is something we changed in the party primary. We just get rid of them. Let's not have them, right? Let the party primary parties choose their own nominees however they want their private organizations. Instead, we'll have a single preliminary round, and everybody runs on the same ballot. And everybody votes regardless of party from the same set of candidates. You pick one, your favorites – polls close. We count the votes, and the top five finishers advance to the general election. So, it's not one Democrat and one Republican and a lesser of two evils election anymore, we've got five competitors and they could be if it's a red district, you could have three of them be Republicans or four, or the other way around. And you could have some independents in there, Green Party, Libertarian, etc.. So goes to the general election.
Now that we're going to benefit from this dynamic, diverse competition between these five candidates, between the preliminary round and the general, we need to figure out who should win in the general. And we can't just let one of these five win with like 21% of the vote. If the votes split relatively equally five ways, because that wouldn't help us. We need to figure out who has the broadest support from all these November voters. And to do that, we just use instant runoffs to narrow these five candidates down to the final two, at which point, obviously the person with the majority wins. Instant runoffs are just like a series of physical runoffs. But instead of having to keep coming back for another vote when you go from five candidates to four candidates to three candidates to two candidates – instead of having to keep coming back, you just cast all your votes at once by indicating your preferences on a ranked ballot. Like this is my favorite, this is my second favorite all the way down to over my dead body do I want Katherine Gale to be my senator, and she's my fifth choice.
And so, we will always, out of the final five voting, have true competition in November. Nobody will have been able to win before November voters showed up. Nobody can win in the summer anymore. There's nothing safe that way. Might be a Republican seat. And it might be for sure that a Republican is going to win. But which Republican is going to win will be chosen in November when everybody is there. We do that and they are chosen by a majority of voters, which means they answer to a majority of voters, which means that they actually can take the actions that we just talked about. People elected in November can afford to, and actually are incented to negotiate, to make deals, to find a consensus solution. And they'll still, in most cases be Republicans and Democrats, although now there's space for all the new competition. We need to put that pressure on Republicans and Democrats to get the job done and that's how we would change things. And it would change everything.
Willy Walker: A couple of things that I found to be fascinating in reading the book. The first is that on the ranking, one of the things that is important is today we can have somebody who wins 36% of the vote go to Washington. The way that ranked choice voting goes is you will have someone have to win over 50% of the vote and if they don't get it on the first round, then the votes of number five go up to number one and they get reallocated on the ranking that you just put forth until someone gets over it. And so, I thought that it was really interesting that you will get someone at the end of the day who does have a majority of support from the voters.
The other thing that I thought was fascinating was that you point out that California and Oregon actually have had the top two elections since 2012 and that instantaneously the number of elections in California deemed competitive doubled literally in two years. They doubled as being competitive because of doing this top two, you all have proposed top five to make it a broader field. And you use the analogy in the book, Katherine, as it relates to the Final Four, which I thought was fantastic because you're like, if Duke and Kentucky were sent to the national championship every year, Duke and Kentucky fans would be really happy, but what about everyone else who has their team that gets in there and you get a diverse group of schools that everyone has that underdog who can kind of make it in there. And if we just went back to Duke and Kentucky every year, it gets pretty boring. Great for Duke and Kentucky fans, but not great for the general viewing public.
But one other thing that I thought was fascinating when you focused on California and the top two is that Nancy Pelosi and Kevin McCarthy, both from the state of California, hate the top two voting because they like their party system. They want to ensure that because they're at the top of their parties that no one can come along and kick them off of their spot, which is such a perfect example of here we have the speaker today and the previous speaker, both in the state of California, both in a state that was open to and they both hate this because it's actually getting voters what they want.
Katherine Gehl: Yeah, I mean, let's say I want Final Five voting because I think we'll be able to get a lot of things done. In that sense, you can think of it as being a uniting election system, but it's already proven its uniting potential because it has united both the establishments, the party structures, and the political industrial complex against it. Yeah, they both oppose it. So, it was just kind of a good sign.
Let me say something really important, though, about what was it, Duke and Kentucky? Is that who we were saying would be the final two? Not only would it be, quote, bad for the viewing public, here's the point. If they were always going to be there, over time, they might not be very good. They just have to be better than the other. And there might be tons of teams down here that are way better, but they don't ever get the chance to show it. So, these guys have no threat of competition that keeps them from being any good.
Willy Walker: 100%. Duke and Kentucky both aren't having very good basketball seasons, so if we had them already guaranteed to be in the national championship, everyone would be greatly disappointed.
Katherine Gehl: Yeah, they wouldn't have to try very hard, and they could put their money into their other teams, but still win all these championships in a sense. So, what competition does? I want the competition of Final Five voting, not to say that if we had three parties, everything would work. Or four parties or something. It's the threat of new entrants, It’s what competition delivers in any human endeavor, which is innovation, results and accountability.
So, let's go back to the Perot example and look at it this way. So, Perot only got 19% of the popular vote and zero electoral votes. So, you could say, you know, he just lost. But guess who won when Perot ran? The American public. Because Perot ran on debt and deficit reduction and also anti-NAFTA, but debt deficit reduction. Neither the Democrats nor the Republicans had reduced the national debt on their platforms previously. It was not their priority. But then Perot had his charts, and he was telling everybody how important it was. And that was my first time I got to vote, and I voted for Perot because I cared about the debt deficit then. And I was already politically homeless, I suppose.
Anyway, so what happened after that? The Democrats and the Republicans worked together to deliver balanced budgets in the second of Clinton's two terms because they felt political pressure from this 19% of the electorate, and they didn't want to cede that issue to a nascent third party, which was Perot's Reform Party, because that competition could hurt both of them, so they decided to solve it. Competition helps even when it doesn't change who wins because it changes what winners do. And again, that's what we're about, is what winners are going to do. So, the only way we're ever going to have fiscal sanity in this country is if it becomes an issue that makes a difference in who wins and loses in November. That will only be if someone can offer a different platform. So, we need the competition, not just to necessarily change who wins, as I say, but to change what the winners are going to do and what they're going to care about, and to bring forth new issues and innovative ideas into the system. That's what competition is going to give us.
Willy Walker: I would only underscore your comment about Perot and what his movement did, you think about the economy between ‘96 and 2000. The Democrats will take responsibility that Clinton was in the White House. The Republicans will take responsibility that Gingrich was in the House. The issue is that the economy grew dramatically during those four years, and it was due to having that undercurrent. Also, to your exact point, it's not that you're looking for centrists and everyone needs to "kum ba yah" and hold hands. You had, to some degree, a hyper partisan in the House of Representatives and a hyper partisan in the White House. And yet that underlying competitive force of Perot got them to work together and drive the economy forth and made it so that, I mean, we had that and that was when tech was coming forth. That's when the economy was growing incredibly. I mean, it's really quite something that you identified that force from Perot being in that early election of what it forced Clinton and the Gingrich Congress to do.
Katherine Gehl: Return to a theme that I've had, which is often what's going on is that what gets reported as going on. So, it hasn't been reported that way, that it was Perot's competitive threat. In fact, when I was coming out with my book, we published, to coincide with the book's release, an article in the Harvard Business Review, about this whole theory. And I gave this example in there about Perot and the Harvard Business Review. Editors wrote back to me, you know, in the comments and said, no, no, the deficit went away. We got these balanced budgets because of the advice of Clinton's economic advisors and the expanding economy which actually both of those things did contribute, but they didn't believe me, even though it totally derives from the theory that Perot was a huge force in it, and that you needed that force to incent them to even follow and take advantage of the expanding economy to reduce debt instead of just to buy more stuff. And the only way I got it in there was I was able to send them Ross Perot had, God bless him, died in the previous year or two years. And Paul Begala, who was one of Clinton's advisers in the White House, had written a piece when Perot died, where he said, and I quote, “It is doubtful that we would have solved that issue without the pressure that Perot's voters brought to the table.” So that just theoretically shows, and I had actually written on the same day when Perot died, I actually had written about what we got from Perot. But of course, you know, my theory wasn't quite enough. But when Paul Begala says it, we understand that it is indeed true. That's competition. It's fantastic. We love competition! You know, here in America, in business. I mean, it's created such good, and yet somehow we have a protected duopoly in politics. And we think that we naturally have a two-party system. Absolutely not. We can get ourselves a multi-competitor system. And I personally don't care if it's two parties as long as they feel they've got to get things done that please lots of us or they'll get replaced. That's what we need. We just need the threat of new competition.
Willy Walker: On that, I will say thank you so much for spending an hour with me. I love the book. It's a great framing of such an important issue.
Katherine Gehl: Super quickly. So Final Five voting isn't a theory – it exists. Alaska passed the earlier version, which is the Final Four voting in 2020 by referendum. They have changed all their elections for their state legislature, their statewide offices, and their federal delegation. Nevada passed Final Five voting in 2022. If they pass it again in ‘24, it will be the law of the land for their elections. We have campaigns in ten states at earlier stages, so this is a real thing that really is happening. It's not just a nice idea. It exists. Everybody here, if they're interested, can get involved in making this happen. Business leaders are often the core of the drivers to change these roles in each state.
Willy Walker: With that, Katherine, thank you so much.
Thank you, everyone, for joining us today. We'll be back next week with another Walker Webcast. Thanks, Katherine. It was a real joy.
Katherine Gehl: Thank you.
Willy Walker: Take care.
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