"Good morning, and thank you, Mayor Peterson, for those kind words, and for all your good work in Indianapolis.  It's great to be in New Orleans - thank you Mayor Nagin for hosting us.  Mayor Nagin is a member of our bi-partisan coalition of Mayors Against Illegal Guns. We have more than 240 mayors from all across the country, including dozens at this conference.  If you'd like to learn more, there's a representative of the coalition at the back of the room.

"On Bourbon Street, there's a statue of the legendary Fats Domino - and last week, I presented the key to New York City to him.  Fats Domino has done so much to help this city recover from Hurricane Katrina - and New Yorkers know how much that means. We will never forget the generosity that so many Americans from so many towns and cities represented at this conference, showed us in the wake of the 9/11 attacks.  So on behalf of all 8.2 million New Yorkers:  Thank you.

"And since I plan to speak about accountability this morning, let me begin with a very quick progress report on New York.  When I took the oath of office three and a half months after the attacks, smoke was still rising from the World Trade Center site. We faced a $5 billion budget deficit, and the city's economy had sunk into recession.

"Today, $30 billion in new construction is underway in Lower Manhattan; work has begun on the Freedom Tower and a beautiful memorial; the budget deficit became a $5 billion budget surplus, and unemployment dropped to an all-time annual low of 4.9 percent.  Crime is down 25 percent, the streets are cleaner than they've been in 30 years; test scores and graduation rates are up about 20 percent; and a record 45 million tourists will visit our City this year - which puts us well ahead of our goal to attract 50 million tourists a year by 2015.

"But our recovery didn't happen by accident.  It happened because we did what all of us were hired to do:  To lead, and manage for results.  We all have our different approaches, different styles, different ideas, but whether you work in a small town or a big city, all of us are responsible for getting things done.

"I spent my first career in the private sector - 15 years on Wall Street and then 20 years running the company I built.  When I first ran for mayor, everyone told me that you can't run government like a business. And that's true.  Government and business are very different.  In business, it's a dog-eat-dog world.  In government, it's the other way around. But the truth is, even though you can't always run government exactly like a business, you also can't run it like a lemonade stand, giving out freebies to friends and budgeting on the back of a napkin.

"From my experience, the most successful managers in both the public and private sector have a vision, a strategy for implementing it, and a commitment to accountability. But these three parts are not created equal. Vision and strategy are fairly easy - plenty of people have a vision, and everyone thinks they have the best strategy for achieving it.  But accountability is where the rubber hits the road.

"Accountability is the difference between failure and success, between photo-ops and progress, between the drawing board and the construction site. Accountability is the norm in the private sector, because companies that aren't accountable to their customers go out of business.

"But government never goes out of business.  It has a captive audience of customers - and it shows.  For instance - in business, failing departments get re-tooled or eliminated.  That's basic accountability.  But in government, failing departments get a bigger budget!  Government tends to move resources from things that work to things that don't work, and that's a big reason why the public sector doesn't innovate very well.  In the private sector, managers set benchmarks and develop data systems that allow them to evaluate performance.

"There's a saying: 'In God We Trust.  Everyone else bring data.'  Those are good words to live by - but in government, there tends to be a lot of people following ideology and crossing their fingers.  And when things don't work out, they point their finger at the other guy. No one likes to accept blame - but that's part of accountability. 

"And that's why I've released progress reports on the campaign promises I've made. I was told no one had ever done that - but it's just basic accountability!  We've kept the vast majority of our promises, but we also admitted when we hadn't made progress, or when we decided that something wasn't such a good idea after all.  I'm encouraged by the fact that a few other mayors have also adopted the practice, including San Francisco's Gavin Newsome, who just won a second a term.

"When there's no accountability, problems just get worse - and that's what we're seeing in Washington right now.  I believe that the absence of accountability in our national political culture is an increasingly serious problem - especially as we face a time of increased economic uncertainty. Government can't stop the business cycle - that experiment was called communism, and it failed miserably. What government can do is to prevent a bad situation from becoming worse, and to lay the groundwork for future success. But the only way to do that is to begin changing a political culture in which accountability has gone AWOL.

"How do we do it?  I believe it starts with us, and the choices we make.  We have to ask ourselves:  Do we have the independence to pick the best people, no matter what party they belong to or what political connections they have?  Do we have the honesty and integrity to call 'em as we see 'em, even when it means alienating party leaders or special interests?  Do we have the courage to try new ideas that are unproven, even when others tell us not to?  And do we have the discipline to invest in the future, even when there's pressure to spend on the present?

"These are the core values of accountable leadership, but they are sorely missing in Washington today, and on the campaign trail.  This morning, I'd like to briefly touch on each value - beginning with independence.

"Many of you were elected in nonpartisan races - because national party politics really have nothing to do with local government. With all due respect to Ken Mehlman and Terry McAuliffe, who will be speaking later today, I believe New York's Mayor LaGuardia had it right:  'There's no Democratic or Republican way of cleaning the streets.'  And I think that Ken and Terry might even agree with me that if party politics had less to do with the federal government, we'd all be in better shape.

"How many times do you read about a problem that Washington won't tackle because neither party wants to touch it before the next election, or because partisan gamesmanship has generated so much distrust on both sides of the aisle?  It happens all the time! And how many times do you hear about a patronage hire getting tarred by scandal or incompetence?  New Orleans knows this story all too well.

"Accountability begins with recognizing that you work for all the people - not a party. When I was first elected, I hired people in both parties, some of whom had supported my opponent. Merit should be the sole factor in policies and hiring - because no party has a monopoly on the best ideas or the best talent.  Hire the best and brightest, and call 'em as you see 'em.  That's the way it is in the business world and in the best local governments - but not in Washington.

"The second element of accountable leadership is refusing to let special interests compromise your honesty and integrity. We've got a real problem in this country with special interests, and let me give you just one example.

"Right now, Congress is debating a Farm Bill that is a special interest goldmine - $286 billion worth.  The bill pours huge sums of money to large agri-businesses, whose lobbyists are using the image of the struggling family farmer to line their own pockets. There's so much money to hand out that some of the people who are collecting it aren't even alive!  I kid you not:  The U.S. government is actually paying dead people.  You can't make this stuff up.

"It would be funny if it weren't costing American consumers a fortune in higher tax bills and higher food prices - but it is.  The average family pays coming and going, while the special interests are laughing all the way to the bank.  People on both sides of the aisle recognize that the Farm Bill is definitely not what it should be.

"You won't hear the truth on the campaign trail, because the pandering is now in full throttle, but just look at the coalition that supports reform:  The Heritage Foundation; Taxpayers for Common Sense; the National Taxpayers Union; Environmental Defense; Bread for the World; the Progressive National Baptist Congress. Those groups can't agree on the time of day!  But they agree on the desperate need for a farm bill that helps America's farmers and consumers instead of hurting them.

"The problem - like everything else in Washington - is that members of Congress are satisfied as long as their pet special interest gets a cut of the action. Corn, sugar, soy-beans - you name it, the big companies are all taken care of.  They even throw Food Stamps into the Farm Bill to buy off the urban representatives, and they toss in forest conservation to get the environmentalists. It's a game of   'You scratch my back, I'll scratch yours'- but no one is accountable for the national interest. 

"For the biggest corporate interests and incumbent politicians, the system works fine - big payments, big contributions, big re-election numbers.  But it all comes out of our pockets. No business would try to operate this way in the global economy. It would be like bribing your competitors, hiring people for no-show jobs, and paying above market-prices. You'd be out of business in a heartbeat!  But it's exactly what the federal government is doing - and it's this lack of accountability that threatens our economic security, and our future as a great nation.

"When Republicans won control of Congress in the 1990s, they promised real Farm Bill reform.  But they ultimately decided to say, 'We'll do it next time.'  How's that for accountability?  In 2002, they punted again.  Now, the Democrats are in control, and guess what?  They're punting too. Why?  Because pork-barrel special interest politics is the one thing that both parties in Washington agree on.

"What's the answer?  I think it starts by taking on the big campaign contributions that grease all the pork barrel spending - a practice that's called 'pay-to-play.'  In New York, we've passed the most comprehensive 'pay-to-play' campaign finance reform in the country - and similar approaches are also being passed in other cities and states.  But not in Washington.

"The third element of accountable leadership is having the courage to confront big problems with innovative new ideas, and to stand by your beliefs, even when the 'smart money' tells you not to. One quick example:  This week I talked with the Steve Sadove, the CEO of Saks Fifth Avenue.  He told me that after Hurricane Katrina, his New Orleans store was looted, vandalized, and burned out.  Most other chain stores would have pulled out - and many did.  That was the smart money.  But he didn't.  He re-built the store and re-opened it - not out of charity, but out of a belief that the city would come back, stronger than ever.

"Today, New Orleans is coming back, and Steve told me that sales are now greater at his New Orleans Store than they were before Katrina.  Was it risky?  Maybe.  But the best private sector managers are always taking smart, calculated, carefully-plotted risks - and those of us in government should too. Because without risk, there's no innovation, and without innovation there's no progress.

"In government, taking risks means having the courage to try ideas that aren't poll-tested and consultant-approved. It's going on in cities around the country - but, once again, not in Washington. There, instead of thinking outside the box, they triangulate within it.  It's not that our problems are too hard to solve - they're not. This is America!  We can do anything!

"As a businessman and mayor, when someone tells me it can't be done, I say - let's find a way.  And you know what?  There's always a way.  Let me give just one quick example from New York:  We structured a new contract with our school principals that offers them a $50,000 bonus if they lead high-needs schools, and if their students make real achievement gains.

"We wanted to offer our teachers the same kinds of incentives, but for years, the teachers union was adamantly opposed to merit pay.  The conventional wisdom was that we would never get the union to agree to a deal in a million years - but we didn't accept that. And so we worked very closely with them, we built trust. And guess what?  We found common ground.

"Last month, we announced a $20 million incentive program that will give $3,000 to the teachers who raise student performance in the toughest schools - and some will earn much more. Bonuses also confer recognition and respect - something that's critical in the private sector, but we don't see enough of it in the public sector.

"Finally, the fourth element of accountable leadership is having the discipline to invest in the future.  Roads, bridges, tunnels, trains, airports, levees.  Infrastructure isn't a sexy campaign issue, but it's a big part of what made America great.  Where would we have been without the Erie Canal, the railroads, the interstate highway system? If we're going to remain a great nation in the 21st century, we have to stop taking our infrastructure for granted. That means not only investing in maintenance, but investing in new, high-tech infrastructure that will be essential in the 21st century, whether that's high-speed rail or bus rapid transit.

"Investing in the future also means saving today for costs that we know will come tomorrow - and let me give just one example that all of us face: retiree health care costs. Right now, the federal government requires local governments to put away money to pay for retirees' pensions - but not for their health care costs. With the cost of health care growing so quickly, government has two choices:  It can begin putting aside money now, or it can pass off that debt onto future generations.

"In New York, we've put $2.5 billion into a trust fund to begin to pay for retirees' health care costs, and in some other cities, savings are also being set aside for the future. But, of course, not in Washington.  We've been through five solid years of economic growth - yet what did the federal government save? Nothing.  It ran up a huge debt that the next generation will have to pay. What policies did the federal government pursue to cushion the hard times that always come around? You got me.  Nearly all the big issues have simply been deferred.

"And what big long-term investments did the federal government make in the future? Not many - and tragically, that's all too obvious here in New Orleans. If we don't invest in the future and save in the good times, when the bad times come, we're going to be in much worse shape than we should be. And unfortunately, that's where we're headed right now as a country.

"The four values I've outlined this morning aren't just rhetoric. They're a challenge - a challenge to all of us, in every party, at every level of government.  They're a challenge to candidates to move beyond photo-ops, to reject stage-managed 'town hall' meetings, and to talk about how they're going to use real accountability to solve real problems.

And they're a challenge to a rotten political culture that rewards sell-outs and sycophants. We can do better - and cities are doing better. It's our job to keep leading, keep innovating, and keep tackling the toughest problems. And if it can happen in cities - it can happen in Washington.

"Enjoy the rest of the conference, and come visit us in New York - we could use the tax revenue.  Thank you."