plan hubbard is on the line with us is the senior economics adviser to mit
romney is an economist and dean of the columbia university graduate school
business previously served as the deputy assistant assist uh... assistant
secretary of the u_s_
the part of the treasury from ninety one ninety three and chairman of the council
of economic advisors
during the bush administration two thousand one to two thousand three
his website blend hubbard dot net and many are speculating that
it there on the is like the president he could even be the next fed chairman let
other
it's a pleasure and honor to have you with us sir
my pleasure thanks
haha lizard that
after
you know if you go if you look at the last sixty or seventy years of history
we see that
average wages tracked productivity alice perfectly continuously until the reagan
administration then wages flattened out and productivity continued increased
and and all that money we seem to go to c_e_o_ pay instead of wages
we've seen now the result of reaganomics trickle-down economics whatever you are
calling supply-side economics for thirty years it's been a disaster for the
middle class
how do you think you can continue to sell this to the american people
you know we have long-term structural problems in america that are democrat
problems or republican problems the problems we have to deal with
and we have seen wages for many people failed to keep pace with productivity
compensation has kept pace with productivity and so how could both of
those things be true
we've seen very sharply rising health care costs and we've seen problems an
opportunity for many lower and middle-income americans
we really need to rethink our employment policy in united states we want to
increase growth but its gotta be broadly shared
so how would you do that
will first getting growth is about
changing our tax code getting the size of government right giving regulation
that supports growth is it about right here and
well you know you can create demand in an environment that has this much policy
uncertainty business executives i speak to her very concerned about hiring
people are making investments with this level of policy uncertain but no in the
next thing i respectfully no business executive ought yeah i'm one of them no
business executive
is right mind would refuse to hire somebody
if there is demand for his products
if you could make more money hiring more employees
well that's true but let's unpack what you're saying in environmental policy
and certainly we you don't know what future taxes are the future size of
government the future of regulation buddies ever hilarious thing
well you know with respect this is the greatest level of uncertainty for a
condom assume ensure this we probably cost our economy since two thousand
seven more than two million jobs as from policy and certainly and that's
something we can fix but you started asme a really important question about
what we can do for lower and middle-income americans
and really is about changing our employment policy to have much better
training programs
much more focus on education and skill development this country can do better
both democrats and republicans sobai policy answer here you talking about the
the effort
though over the last three adheres by the republican party to
to obstruct all of the
for most of the obama
uh... administration programs that might move the economy forward is that that
would bring jobs home from overseas things like that but we may want to have
all history lesson you and i because the first two years of president obama's
presidency he had a democratic congress
anything he wanted to do for the economy he could have done that he could not do
any of the rules of the senate allowed tom coburn desktop p_c_ legislation
after legislation after legislation and you know it sir
that's not really true on tax and budget but that's not that's our key that we
can certainly disagree on policy
you know it nancy policy for example dot this legislation of the house
representatives one there was no both withdraw by the democrats
the said no more tax breaks for companies to send jobs overseas like
they used to do and by the way we will give you a tax break if you bring your
jobs back home
he got a majority got more than fifty votes in the hot in the senate
but the republicans filibustered it that's just one of many examples that
were i'd gotten to be over two hundred examples if you want a long list but of
alg programs and policies that would have directly help the average american
worker that republicans blocked
in my opinion because they were trying to harm the economy
to advance the interests of of you know that uh...
the republican presidential nominee in this case mit romney
i don't think that president obama wants the harm the economy i don't think that
romney wants to harm the economy i think they're serious differences in policy
and we need to make america a safe place to invest in again and we can
and it requires both sides compromising on sensible policies
could not only enhance growth what really is you said quite correctly share
the benefits of that grow
so where
e my firstborn curious about you if you don't mind and uh... how would you
describe yourself in terms of economic theory having we've had uh... alan
greenspan who sort of a
uh... higher and the n_ uh... you know we've people the following von hayek
we've got uh... the milkens
friedman school of economics we've got
obviously you know there there there has been
uh... you know people following uh... what's his name uh... john kenneth
galbraith and others ah... way uh... what's what is your
you cannot flossie
if s in a nutshell
if you don't mind
know it's a great question i think that economics is a powerful discipline to
help us understand the power that markets can bring to bear
to make people's lives better
and to help us solve social programs and problems around the world
call myself more about practical problem solver
so you're more of a pragmatist
i would consider that yes yeah
are there any countries that you can identify in the world that have
successful economies and success and more importantly successful middle
classes
that have not done so by signifi government involvement but rather have
done so by
the free market
for the united states historically i think needs that example definitely
rising economic growth being broadly shared
there a number of trends around the world that have made that tough the
world over issue no
but we can change policy in this country to help make that happen then
fortunately on both sides of the aisle does not always support for that
wasn't the united states building of the great middle class in the fifties
sixties seventies and early eighties
wasn't that the consequence of government policies that the g_i_ bill
g_i_s bruno support for uh... a home loans
r_d_ the uh... the eisenhower
transportation bills as normal in schools and hospitals
and he basically squared a hundred and twenty seven percent of g_d_p_ in-depth
after world war two he basically
stimulated aside a bit paid off that debt
hi isn't that an example of government policy created and or fire
it's certainly the case the government has a strong role to play creating an
educated society created infrastructure
but america's growth any successful nations growth is about innovation in
the private sector not about government
and and where art
where do you see if if iran he's like the president
what would be the pop what would be your first policy recommendations
coa governor romney has said is that day one he would introduce a energy
regulation
that with create jobs in the energy sector
to uh... uh...
moved from obama care too much more market-oriented health care system
tax reform and spending restraint
altogether which could create another twelve million jobs in this country in
his first term
art does
just variations on what george bush did
not at all
by george bush actully
sadly in my view lead spending get out of control under his watch
governor romney's proposing to restore the size of government to its pretty
financial crisis level about twenty percent of g_d_p_
you know and and
it's it's fairly small right now it's about
what's at pike yeah i thought that we were taking about eighteen percent of
g_d_p_ right now
the government spending is about twenty four percent of cheating
right-hand governor romney would put that back to its historical average of
twenty percent of g_d_p_
if we keep government id twenty four percent of g_d_p_ will have to have
massive tax increases that everyone to pay for that
or cut back strong elie on education canada's conti canada is at fifty three
percent g_d_p_ most use scandinavian countries ur in over sixty percent of
g_d_p_ as you know most
northern european countries are between forty five and fifty five percent g_d_p_
now seem to be working just fine why should be we be fixated on twenty
percent
well let's keep in mind some of the nordic countries you mentioned actually
it had major tax and spending reforms and actually have more favorable
regulation in the united states
the model that's closer to your world views continental europe and i don't
think we want to go
alright glenn harvard the senior economic adviser to mit romney economist
and dean plumb university graduate school
when harvard dot net his website sir thank you so much for being my pleasure