Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Joining us now, and I've really been anticipating this is
Speaker 2: Glenn Hubbard out of Florida with just terrific academics and
Speaker 2: frankly giving energy to Columbia University's business schools there Dean
Speaker 2: for so long. He's doing different things now. But I'm
Speaker 2: going to cut to the chaser. Paul's got lots of
Speaker 2: FED questions. Glenn, I am absolutely thunderstruck and crushed that
Speaker 2: you're not on the short list to be chairman of
Speaker 2: the FED. Have you ever talked to the Secretary of
Speaker 2: Treasury about your commitment to a more conservative economic ethos?
Speaker 3: Well, thanks for having me, Tom. I think the President's
Speaker 3: got a good short list for the FED. I look
Speaker 3: forward to the choice. This is probably the most challenging
Speaker 3: time to run the FED that I could ever imagine.
Speaker 2: So that was diplomatic that on exactly. You learn to
Speaker 2: do that when you're Dina Colombia.
Speaker 1: Exactly, Glenn, how do you view here the FED? Here?
Speaker 1: It's in a little bit of it a position it
Speaker 1: has doesn't necessarily find itself very often, which is, you know,
Speaker 1: really under some political pressure from the White House here?
Speaker 1: How do you view the FED these days.
Speaker 3: Well, I think there's a short run and a long
Speaker 3: run challenge. The short run challenge is the one in
Speaker 3: the news, which is what do you do about rates?
Speaker 3: You have inflation that's too high, you have a job
Speaker 3: market weakening. I think the case for a lot of
Speaker 3: rate cuts is pretty weak. To the extent that they're
Speaker 3: worries about employment. Many of those are structural, they're AI,
Speaker 3: They're changes that really are beyond the Fed's purviews. I
Speaker 3: think the Fed's watchful waiting makes sense longer term. The
Speaker 3: challenge is how do you keep an independent FED in
Speaker 3: the presence of political pressures? And I think while the
Speaker 3: FED needs to be independent, it has made mistakes. Trump
Speaker 3: is not entirely incorrect, and so the next chair will
Speaker 3: have to do some reforms.
Speaker 1: So you mentioned AI, Glenn, it's certainly been a key
Speaker 1: key narrative of this market over the last two to
Speaker 1: three years as companies step up their spending here. But
Speaker 1: what are the impacts do you think on the US
Speaker 1: labor force? There's a lot of consternation out there.
Speaker 3: Well, I think it's too soon to tell. I mean, basically,
Speaker 3: AI can either substitute on the one hand, for workers,
Speaker 3: or it can compliment workers' skills, and we're seeing both
Speaker 3: of those in the labor market. It won't surprise you
Speaker 3: to know economists completely different in what their views are
Speaker 3: on AI. I think in the long run AI is
Speaker 3: going to displace many jobs but create many more jobs.
Speaker 3: Where I think people may be surprised is on market
Speaker 3: valuations and who wins from AI. Just like we learned
Speaker 3: in the Telco boom in the nineties, a lot of
Speaker 3: the first movers lose money, but ultimately it raises productivity.
Speaker 3: We may well see.
Speaker 2: Weekly let's go there, I mean, I mean Glenn hlbrid
Speaker 2: with us folks for the whole of you worldwide on
Speaker 2: YouTube and all of our radio affiliates in America. Thank
Speaker 2: you for joining this morning. Glenn, you're teaching at Columbia
Speaker 2: or frankly at your Central Florida and you have to
Speaker 2: discuss productivity. We're blind right now to where productivity is
Speaker 2: in twenty twenty five. When won't we have an understanding
Speaker 2: of this new productivity?
Speaker 3: Well, it's a great question, Tom, and the honest answer
Speaker 3: is it takes time. So if you look at previous
Speaker 3: waves of what economists called general purpose technologies like electricity,
Speaker 3: or mainframe computing or the internet. They took a decade
Speaker 3: or more to really ripple through productivity. And the reason
Speaker 3: is it takes time for businesses, for individuals adapt. I
Speaker 3: think it'll take less time this time, so it may
Speaker 3: be within five years. But we shouldn't be expecting it overnight.
Speaker 2: Okay, But Paul and I've had this in many conversations.
Speaker 2: It's just brilliant work. Can you to Richard claried for
Speaker 2: his support of the show. Glenn Hubbard A long ago,
Speaker 2: in globalization, we broke a bargain with the clothing labor
Speaker 2: of the Carolinas. We said, we're going to retrain you.
Speaker 2: We're going to do this. Are we going to do
Speaker 2: the same thing with AI where we go sort of
Speaker 2: AI globalization and we break the labor bargain with all
Speaker 2: those people pushed out of jobs.
Speaker 3: I'm super worried about this point. It is the political
Speaker 3: economy question of our time. If you look at the
Speaker 3: past three or four decades, technological change is actually number
Speaker 3: one then globalization. We didn't retrain people. We were too
Speaker 3: slow moving. AI is going to happen faster. I do
Speaker 3: worry about it. I hope the administration will become more
Speaker 3: focused on how do you come on?
Speaker 2: I got tied at one minute left, Glenn, let me
Speaker 2: cut to the chase. The elites are from the fancy
Speaker 2: schools up north. Granted you did so well in the South.
Speaker 2: You went to Harvard. There's like three zip codes out
Speaker 2: near Palo Alto. There's the northeastern zip codes. You're one
Speaker 2: of the few people we have who viscerally gets the South.
Speaker 2: What's your message to the elites about not doing a
Speaker 2: redox that busted globalization of years ago?
Speaker 3: Well, two things. One, there's smart people and innovative ideas everywhere.
Speaker 3: We need applied research centers everywhere. We need to help
Speaker 3: place us left behind. And second, our politics depend on this.
Speaker 3: If we want to embrace AI and all it brings,
Speaker 3: we got to get this right.
Speaker 2: Glennahlberd, thank you so much. Great. Should I get off
Speaker 2: my soap box now? Glenn Hulbert, thank you so much,
Speaker 2: Always and forever with Columbia University.