1 00:00:02,520 --> 00:00:07,400 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:07,920 --> 00:00:10,840 Speaker 2: Joining us now, and I've really been anticipating this is 3 00:00:10,880 --> 00:00:16,239 Speaker 2: Glenn Hubbard out of Florida with just terrific academics and 4 00:00:16,800 --> 00:00:21,479 Speaker 2: frankly giving energy to Columbia University's business schools there Dean 5 00:00:21,640 --> 00:00:27,600 Speaker 2: for so long. He's doing different things now. But I'm 6 00:00:27,640 --> 00:00:29,479 Speaker 2: going to cut to the chaser. Paul's got lots of 7 00:00:29,520 --> 00:00:35,440 Speaker 2: FED questions. Glenn, I am absolutely thunderstruck and crushed that 8 00:00:35,560 --> 00:00:39,000 Speaker 2: you're not on the short list to be chairman of 9 00:00:39,040 --> 00:00:41,240 Speaker 2: the FED. Have you ever talked to the Secretary of 10 00:00:41,360 --> 00:00:48,160 Speaker 2: Treasury about your commitment to a more conservative economic ethos? 11 00:00:49,520 --> 00:00:52,760 Speaker 3: Well, thanks for having me, Tom. I think the President's 12 00:00:52,760 --> 00:00:55,320 Speaker 3: got a good short list for the FED. I look 13 00:00:55,400 --> 00:00:59,200 Speaker 3: forward to the choice. This is probably the most challenging 14 00:00:59,240 --> 00:01:01,760 Speaker 3: time to run the FED that I could ever imagine. 15 00:01:02,600 --> 00:01:05,640 Speaker 2: So that was diplomatic that on exactly. You learn to 16 00:01:05,680 --> 00:01:07,119 Speaker 2: do that when you're Dina Colombia. 17 00:01:07,240 --> 00:01:11,520 Speaker 1: Exactly, Glenn, how do you view here the FED? Here? 18 00:01:11,560 --> 00:01:13,480 Speaker 1: It's in a little bit of it a position it 19 00:01:13,520 --> 00:01:16,360 Speaker 1: has doesn't necessarily find itself very often, which is, you know, 20 00:01:16,480 --> 00:01:21,119 Speaker 1: really under some political pressure from the White House here? 21 00:01:21,160 --> 00:01:22,800 Speaker 1: How do you view the FED these days. 22 00:01:23,280 --> 00:01:25,000 Speaker 3: Well, I think there's a short run and a long 23 00:01:25,120 --> 00:01:27,360 Speaker 3: run challenge. The short run challenge is the one in 24 00:01:27,400 --> 00:01:30,520 Speaker 3: the news, which is what do you do about rates? 25 00:01:30,600 --> 00:01:32,840 Speaker 3: You have inflation that's too high, you have a job 26 00:01:32,880 --> 00:01:35,679 Speaker 3: market weakening. I think the case for a lot of 27 00:01:35,760 --> 00:01:38,880 Speaker 3: rate cuts is pretty weak. To the extent that they're 28 00:01:38,920 --> 00:01:42,399 Speaker 3: worries about employment. Many of those are structural, they're AI, 29 00:01:42,600 --> 00:01:45,959 Speaker 3: They're changes that really are beyond the Fed's purviews. I 30 00:01:45,959 --> 00:01:49,960 Speaker 3: think the Fed's watchful waiting makes sense longer term. The 31 00:01:50,080 --> 00:01:53,320 Speaker 3: challenge is how do you keep an independent FED in 32 00:01:53,360 --> 00:01:56,320 Speaker 3: the presence of political pressures? And I think while the 33 00:01:56,320 --> 00:02:00,520 Speaker 3: FED needs to be independent, it has made mistakes. Trump 34 00:02:00,600 --> 00:02:04,280 Speaker 3: is not entirely incorrect, and so the next chair will 35 00:02:04,320 --> 00:02:05,600 Speaker 3: have to do some reforms. 36 00:02:06,480 --> 00:02:11,480 Speaker 1: So you mentioned AI, Glenn, it's certainly been a key 37 00:02:11,600 --> 00:02:14,040 Speaker 1: key narrative of this market over the last two to 38 00:02:14,120 --> 00:02:16,200 Speaker 1: three years as companies step up their spending here. But 39 00:02:16,240 --> 00:02:19,120 Speaker 1: what are the impacts do you think on the US 40 00:02:19,400 --> 00:02:22,720 Speaker 1: labor force? There's a lot of consternation out there. 41 00:02:23,639 --> 00:02:25,679 Speaker 3: Well, I think it's too soon to tell. I mean, basically, 42 00:02:25,760 --> 00:02:29,400 Speaker 3: AI can either substitute on the one hand, for workers, 43 00:02:29,480 --> 00:02:32,119 Speaker 3: or it can compliment workers' skills, and we're seeing both 44 00:02:32,160 --> 00:02:35,280 Speaker 3: of those in the labor market. It won't surprise you 45 00:02:35,360 --> 00:02:38,880 Speaker 3: to know economists completely different in what their views are 46 00:02:38,880 --> 00:02:41,640 Speaker 3: on AI. I think in the long run AI is 47 00:02:41,680 --> 00:02:45,200 Speaker 3: going to displace many jobs but create many more jobs. 48 00:02:45,560 --> 00:02:48,960 Speaker 3: Where I think people may be surprised is on market 49 00:02:49,040 --> 00:02:52,120 Speaker 3: valuations and who wins from AI. Just like we learned 50 00:02:52,120 --> 00:02:54,520 Speaker 3: in the Telco boom in the nineties, a lot of 51 00:02:54,520 --> 00:02:58,480 Speaker 3: the first movers lose money, but ultimately it raises productivity. 52 00:02:58,720 --> 00:02:59,720 Speaker 3: We may well see. 53 00:02:59,560 --> 00:03:02,480 Speaker 2: Weekly let's go there, I mean, I mean Glenn hlbrid 54 00:03:02,560 --> 00:03:04,480 Speaker 2: with us folks for the whole of you worldwide on 55 00:03:04,560 --> 00:03:08,839 Speaker 2: YouTube and all of our radio affiliates in America. Thank 56 00:03:08,880 --> 00:03:12,440 Speaker 2: you for joining this morning. Glenn, you're teaching at Columbia 57 00:03:12,960 --> 00:03:16,080 Speaker 2: or frankly at your Central Florida and you have to 58 00:03:16,120 --> 00:03:21,440 Speaker 2: discuss productivity. We're blind right now to where productivity is 59 00:03:21,960 --> 00:03:25,800 Speaker 2: in twenty twenty five. When won't we have an understanding 60 00:03:26,200 --> 00:03:27,960 Speaker 2: of this new productivity? 61 00:03:29,080 --> 00:03:31,240 Speaker 3: Well, it's a great question, Tom, and the honest answer 62 00:03:31,280 --> 00:03:33,679 Speaker 3: is it takes time. So if you look at previous 63 00:03:33,720 --> 00:03:38,280 Speaker 3: waves of what economists called general purpose technologies like electricity, 64 00:03:38,440 --> 00:03:42,120 Speaker 3: or mainframe computing or the internet. They took a decade 65 00:03:42,200 --> 00:03:45,120 Speaker 3: or more to really ripple through productivity. And the reason 66 00:03:45,240 --> 00:03:49,200 Speaker 3: is it takes time for businesses, for individuals adapt. I 67 00:03:49,200 --> 00:03:52,120 Speaker 3: think it'll take less time this time, so it may 68 00:03:52,160 --> 00:03:55,160 Speaker 3: be within five years. But we shouldn't be expecting it overnight. 69 00:03:55,320 --> 00:03:58,720 Speaker 2: Okay, But Paul and I've had this in many conversations. 70 00:03:58,720 --> 00:04:01,840 Speaker 2: It's just brilliant work. Can you to Richard claried for 71 00:04:01,920 --> 00:04:06,600 Speaker 2: his support of the show. Glenn Hubbard A long ago, 72 00:04:06,680 --> 00:04:12,160 Speaker 2: in globalization, we broke a bargain with the clothing labor 73 00:04:12,280 --> 00:04:15,200 Speaker 2: of the Carolinas. We said, we're going to retrain you. 74 00:04:15,320 --> 00:04:17,240 Speaker 2: We're going to do this. Are we going to do 75 00:04:17,279 --> 00:04:20,000 Speaker 2: the same thing with AI where we go sort of 76 00:04:20,040 --> 00:04:24,520 Speaker 2: AI globalization and we break the labor bargain with all 77 00:04:24,560 --> 00:04:26,359 Speaker 2: those people pushed out of jobs. 78 00:04:27,120 --> 00:04:30,120 Speaker 3: I'm super worried about this point. It is the political 79 00:04:30,160 --> 00:04:32,840 Speaker 3: economy question of our time. If you look at the 80 00:04:32,880 --> 00:04:36,840 Speaker 3: past three or four decades, technological change is actually number 81 00:04:36,880 --> 00:04:41,039 Speaker 3: one then globalization. We didn't retrain people. We were too 82 00:04:41,080 --> 00:04:43,800 Speaker 3: slow moving. AI is going to happen faster. I do 83 00:04:43,920 --> 00:04:47,279 Speaker 3: worry about it. I hope the administration will become more 84 00:04:47,320 --> 00:04:48,920 Speaker 3: focused on how do you come on? 85 00:04:50,120 --> 00:04:52,800 Speaker 2: I got tied at one minute left, Glenn, let me 86 00:04:52,880 --> 00:04:55,960 Speaker 2: cut to the chase. The elites are from the fancy 87 00:04:55,960 --> 00:04:58,520 Speaker 2: schools up north. Granted you did so well in the South. 88 00:04:58,839 --> 00:05:01,640 Speaker 2: You went to Harvard. There's like three zip codes out 89 00:05:01,680 --> 00:05:05,039 Speaker 2: near Palo Alto. There's the northeastern zip codes. You're one 90 00:05:05,040 --> 00:05:10,719 Speaker 2: of the few people we have who viscerally gets the South. 91 00:05:11,200 --> 00:05:14,880 Speaker 2: What's your message to the elites about not doing a 92 00:05:14,920 --> 00:05:18,480 Speaker 2: redox that busted globalization of years ago? 93 00:05:19,320 --> 00:05:22,960 Speaker 3: Well, two things. One, there's smart people and innovative ideas everywhere. 94 00:05:23,040 --> 00:05:25,920 Speaker 3: We need applied research centers everywhere. We need to help 95 00:05:25,960 --> 00:05:31,080 Speaker 3: place us left behind. And second, our politics depend on this. 96 00:05:31,560 --> 00:05:33,920 Speaker 3: If we want to embrace AI and all it brings, 97 00:05:34,000 --> 00:05:34,920 Speaker 3: we got to get this right. 98 00:05:35,240 --> 00:05:38,800 Speaker 2: Glennahlberd, thank you so much. Great. Should I get off 99 00:05:38,839 --> 00:05:42,200 Speaker 2: my soap box now? Glenn Hulbert, thank you so much, 100 00:05:42,360 --> 00:05:46,000 Speaker 2: Always and forever with Columbia University.