WEBVTT - Brian Deese 0:00:03.240 --> 0:00:06.480 One of the President's most senior economic advisors is Brian D's, 0:00:06.519 --> 0:00:09.240 who heads the National Economic Council at the White House. 0:00:09.520 --> 0:00:11.440 I recently had a chance to sit down with Brian 0:00:11.480 --> 0:00:14.280 to talk about interest rates, inflation, and the general state 0:00:14.320 --> 0:00:16.720 of the economy in the United States and around the world. 0:00:17.079 --> 0:00:20.080 So let me ask you the first and most important question, 0:00:20.200 --> 0:00:23.200 Are we going to go into a recession anytime in 0:00:23.239 --> 0:00:27.440 their foreseeable future? Well, thank you for having me, And 0:00:27.560 --> 0:00:28.640 you know, I thought we were going to start on 0:00:28.680 --> 0:00:32.400 the uh rosie. Nope, but I should have expected nothing less. 0:00:32.760 --> 0:00:34.760 I'll join this. I thank you, thank you for having me, 0:00:34.760 --> 0:00:39.720 and thank you for putting this together. Um, we are, 0:00:39.760 --> 0:00:43.720 no doubt in uncertain times. But I think that if 0:00:43.720 --> 0:00:49.159 you look at the US economy my perspective, the most 0:00:49.240 --> 0:00:52.760 striking feature of the US economy right now is resilience. 0:00:52.840 --> 0:00:57.280 The resilience of households and consumer balance sheets, resilience of 0:00:57.280 --> 0:01:01.040 business and business investment, and globe the resilience of the 0:01:01.080 --> 0:01:05.840 US economy in in certain global environment. So, UM, we're 0:01:05.880 --> 0:01:09.720 certainly in a complicated and in many ways unprecedented transition, 0:01:10.200 --> 0:01:12.319 but I think that there's every reason to have a 0:01:12.319 --> 0:01:15.600 lot of confidence in the US position in the context 0:01:15.600 --> 0:01:19.000 of a globally uncertain environment. I'll take that as maybe 0:01:19.240 --> 0:01:22.680 you don't know. Well, let me ask you easier question. Please, 0:01:22.880 --> 0:01:26.400 all right, I'll take any how you want to get 0:01:26.520 --> 0:01:28.319 think England is and you think the UK is in 0:01:28.360 --> 0:01:35.600 a in a recession, well, uh, I think the situation 0:01:35.640 --> 0:01:38.520 in Europe in the UK is very very difficult right now. 0:01:38.600 --> 0:01:41.960 They face a very difficult situation. Uh. And they are 0:01:42.640 --> 0:01:44.600 um as I was saying, in terms of the US position, 0:01:44.800 --> 0:01:50.279 they're significantly more exposed to the energy price volatility UM. 0:01:50.360 --> 0:01:53.840 And they don't have some of the incumbent strengths that 0:01:53.920 --> 0:01:57.560 we have here economically. So I think it is it 0:01:57.760 --> 0:02:00.080 is and is going to be a tough puer it 0:02:00.760 --> 0:02:03.880 for the UK and for the European Union. Normally in 0:02:03.920 --> 0:02:07.240 the United States, when you cut taxes, uh, it's design 0:02:07.320 --> 0:02:09.840 to stimulate the economy, and that's what happened in Britain. 0:02:09.840 --> 0:02:12.760 They now cutting taxes to stimulate the economy. But it's 0:02:12.760 --> 0:02:16.160 had a seems a unfortunate impact on the British economy. 0:02:16.200 --> 0:02:18.400 Stock markets going down, and people are are very upset 0:02:18.400 --> 0:02:22.120 about it, or you're surprised about that. I wasn't surprised 0:02:22.120 --> 0:02:25.480 with the market reaction. You know, I think that if we, uh, 0:02:26.240 --> 0:02:28.440 you have to any economic policy has to be in 0:02:28.440 --> 0:02:31.000 the context of the situation that we are in and 0:02:31.480 --> 0:02:36.000 in a monetary tightening cycle like this. Uh. The challenge 0:02:36.040 --> 0:02:38.400 with you know that that that policy aperture is it 0:02:38.440 --> 0:02:42.600 just puts the uh, it puts the monetary authority in 0:02:42.600 --> 0:02:44.760 a position of potentially having to move even tighter. I 0:02:44.800 --> 0:02:47.400 think that that's what you saw in the reaction. And also, 0:02:47.560 --> 0:02:51.240 you know, I would say it is important, particularly important 0:02:51.280 --> 0:02:54.880 to maintain a focus on fiscal prudence, fiscal discipline. It 0:02:54.880 --> 0:02:56.840 is certainly something that we have been focused on here 0:02:57.360 --> 0:03:00.639 and uh, you know, the markets take notice. So let's 0:03:00.639 --> 0:03:04.720 talk about another easy subject. Inflation. Inflation is as high 0:03:04.720 --> 0:03:07.440 as it's been since I was in government. I managed 0:03:07.440 --> 0:03:09.160 to get a higher rate than you've gotten so far. 0:03:09.560 --> 0:03:13.040 But um, I wanted to know, in your view, is 0:03:13.080 --> 0:03:16.600 inflation now coming down a bit as a result of 0:03:16.600 --> 0:03:19.320 the FEDS hiking and do you expect the Fed continue 0:03:19.360 --> 0:03:23.560 to hike U in the November and December fo MC meetings. Well, 0:03:23.600 --> 0:03:25.560 the goodness is the second part of your question is 0:03:25.560 --> 0:03:29.800 the easy one, as you know, because part of respecting 0:03:29.800 --> 0:03:31.800 the independence of the FED is leaving to this if 0:03:31.800 --> 0:03:36.080 you expect, look, the market expects that, and and okay, 0:03:36.240 --> 0:03:39.640 have any wisdom beyond that? I think, Uh. But but 0:03:42.120 --> 0:03:45.160 if you look at most of the data points over 0:03:45.160 --> 0:03:47.440 the course the last couple of months, we've certainly seen 0:03:47.680 --> 0:03:53.040 headline inflation on a month over month basis slow dramatically. Basically, 0:03:53.040 --> 0:03:55.080 it's been flat for the last couple of months. That's 0:03:55.120 --> 0:03:57.320 a function of the fact that we've seen energy prices 0:03:57.960 --> 0:04:02.480 come down gas prices, uh, and that's offset price increases elsewhere. 0:04:03.000 --> 0:04:05.040 But I think if you look broadly across the economy, 0:04:05.080 --> 0:04:07.800 you are seeing a number of places where you're seeing 0:04:07.840 --> 0:04:11.480 the shift. And this transition happened in in real time. 0:04:11.480 --> 0:04:14.360 Commodity prices have have come off. You've seen that in 0:04:14.400 --> 0:04:17.840 a number of the of durable goods segments. And at 0:04:17.880 --> 0:04:21.400 the same time, as you know that this this process 0:04:21.440 --> 0:04:24.640 operates with some lags. And so that's why even as 0:04:24.680 --> 0:04:26.760 you look over the course of the last couple of months, 0:04:27.400 --> 0:04:31.320 you've got to really, even at a moment of heightened 0:04:31.360 --> 0:04:34.760 uncertainty that we are in right now, have to do 0:04:34.800 --> 0:04:37.000 whatever we can to lift up from individual monthly data 0:04:37.040 --> 0:04:39.400 points Now, when I went to college many years ago, 0:04:39.600 --> 0:04:42.520 the standard textbook said that inflation was on average three 0:04:42.600 --> 0:04:45.240 or four percent a year. That was relatively normal. For 0:04:45.279 --> 0:04:47.640 the last twenty five years, we've had two percent inflation, 0:04:47.920 --> 0:04:50.240 So we've gotten used to two percent inflation. My children 0:04:50.240 --> 0:04:53.720 have never seen higher inflation. But the FED now says 0:04:53.720 --> 0:04:55.920 they want to get inflation back to two percent, which 0:04:55.920 --> 0:04:58.120 is what it was. But why why not three or 0:04:58.160 --> 0:04:59.840 four percent? Is why does two percent have to be 0:04:59.880 --> 0:05:01.560 a goal? And how hard is it going to be 0:05:01.560 --> 0:05:04.040 to get down the two percent without putting unemployment up 0:05:04.080 --> 0:05:06.560 the six percent or high higher. You know, A big 0:05:06.600 --> 0:05:12.200 part of inflation is expectations. UH. And the risk with 0:05:12.720 --> 0:05:17.479 inflation is not only the immediate impact on you know, 0:05:17.720 --> 0:05:21.960 purchasing power, but also the risk that expectations get on 0:05:22.120 --> 0:05:25.440 more get un anchored, and then it gets much more 0:05:25.440 --> 0:05:28.680 difficult to bring inflation down. So when you ask the 0:05:28.760 --> 0:05:32.080 question about bringing down to a level, I think one 0:05:32.120 --> 0:05:35.440 of the most important questions is is the is the 0:05:35.640 --> 0:05:38.039 is the shape of policy focused on making sure that 0:05:38.080 --> 0:05:40.800 we don't lose control of those expectations. That's obviously something 0:05:40.839 --> 0:05:43.800 that the FED keeps a close eye on. UH. And 0:05:44.279 --> 0:05:48.480 so you know to your your question of of the process, Look, 0:05:49.600 --> 0:05:54.120 I am fundamentally optimistic about the American economy, and I'm 0:05:54.320 --> 0:05:56.880 optimistic that we can navigate through this transition in a 0:05:56.920 --> 0:05:58.880 way where we come out of this as a country 0:05:58.880 --> 0:06:01.840 and as an economy in a stronger position than when 0:06:01.880 --> 0:06:05.479 the pandemic hit. So so yeah, at core, I do 0:06:05.560 --> 0:06:09.400 believe that that's that's There's there's no no certainty in 0:06:09.400 --> 0:06:12.400 any way or no no way inevitable that we are 0:06:12.680 --> 0:06:14.680 you know, we're going into a down turn for people 0:06:14.839 --> 0:06:18.600 live in Washington. Politicians, is it more difficult when unemployment 0:06:18.680 --> 0:06:21.080 is going up or when inflation is going up? Inflation 0:06:21.080 --> 0:06:23.960 affects everybody. Unemployment doesn't affect everybody, So how do you 0:06:24.279 --> 0:06:27.160 weigh the political trade off between unemployment going up and 0:06:27.200 --> 0:06:30.159 inflation going up? Which is more difficult for politicians or 0:06:30.200 --> 0:06:34.320 for let's say, the administration. There's no question that inflation 0:06:35.040 --> 0:06:38.720 affects everybody, and it affects the if it affects the psyche. 0:06:38.720 --> 0:06:43.320 And I think that when it it affects a sense, 0:06:43.600 --> 0:06:46.919 I think also of people's sentiment and a sense in 0:06:46.960 --> 0:06:49.440 which things are you know, um uh in or out 0:06:49.480 --> 0:06:51.840 of out of control? And and we see that in 0:06:52.200 --> 0:06:56.640 consumer sentiment data. At the same time, we also, as 0:06:57.160 --> 0:06:59.560 you asked the question about on the political side, as 0:06:59.600 --> 0:07:03.160 economic policymakers, need to recognize that the way that economists 0:07:03.160 --> 0:07:05.120 think about inflation and the way that Americans think about 0:07:05.120 --> 0:07:08.640 inflation often differs. That we have this idea of headline 0:07:08.640 --> 0:07:11.560 inflation versus core, and economists say, really should pay less 0:07:11.560 --> 0:07:14.680 attention to headline because it has food and gas. You 0:07:14.720 --> 0:07:17.840 asked to typical people what inflation is, it's food and gas, 0:07:17.920 --> 0:07:21.120 and so you know, understanding the you know, the interplay 0:07:21.160 --> 0:07:23.800 between the economics and the politics of inflation is is 0:07:23.840 --> 0:07:26.080 something that we haven't been as used to. So let 0:07:26.120 --> 0:07:28.240 me go back to the n a C. And NFC 0:07:28.400 --> 0:07:31.560 was started under UM President Clinton and Bob Rubin was 0:07:31.600 --> 0:07:33.720 the first person to hold that job. Can you explain 0:07:33.760 --> 0:07:35.920 to people what it actually does and what the NBC 0:07:36.680 --> 0:07:39.679 does stay to day when, for example, who's in the NBC, 0:07:39.840 --> 0:07:42.360 who's only the n AC What is your job actually 0:07:42.440 --> 0:07:47.160 to do? So? UM, the National Economic Council are the job, 0:07:47.240 --> 0:07:50.680 the mandate, the mission of the organization is to coordinate 0:07:50.720 --> 0:07:54.760 economic policy across the executive branch and across the cabinet 0:07:55.040 --> 0:07:58.480 to make sure that the President is getting the benefit 0:07:58.560 --> 0:08:03.600 of UH making decisions of his entire economic cabinet, and 0:08:03.640 --> 0:08:06.520 also that the econic cabinet is getting clear direction from 0:08:06.560 --> 0:08:08.760 the President as well, so that that two ways. So 0:08:08.960 --> 0:08:13.520 it's a coordination function UH. On the NBC itself are 0:08:13.640 --> 0:08:16.480 all of the relevant cabinet members, the sort of core 0:08:16.520 --> 0:08:20.720 Economic team o MB Council, Economic Advisor's, Treasury, but also 0:08:21.000 --> 0:08:25.480 Secretary of Labor, Secretary of Commerce, my team. The NBC 0:08:25.560 --> 0:08:27.560 team is a small team within the White House. That 0:08:27.840 --> 0:08:31.480 is our job is to do that coordination across the 0:08:31.600 --> 0:08:34.520 range of economic policiation. Now, you were the deputy in 0:08:34.640 --> 0:08:37.480 the Obama administration of the ANEC, and now you're the director. 0:08:38.200 --> 0:08:40.960 Which NBC worked better the Obama administration one or the 0:08:40.960 --> 0:08:43.440 Biden one? Well, on the issues that I worked on 0:08:43.480 --> 0:08:47.000 in the Obama administration, it worked very very well. And 0:08:47.120 --> 0:08:49.680 the current UH ANYC works very well as well. So 0:08:49.720 --> 0:08:51.640 it's the subset of the ones I didn't work on. Okay, 0:08:51.720 --> 0:08:53.680 let's talk about your own background for a moment. I 0:08:53.760 --> 0:08:57.080 mentioned before you grew up in Boston area, UM, and 0:08:57.440 --> 0:09:01.960 what did your family do? Were they in business, academics, politics, 0:09:02.400 --> 0:09:06.920 important things like private equity that they do that. Uh. 0:09:07.000 --> 0:09:10.199 My father is an educator, he teaches, uh. And my 0:09:10.240 --> 0:09:14.560 mother is a civil engineer by training and worked as 0:09:14.559 --> 0:09:18.080 an environmental engineer. Okay, So you went to Middlebury and 0:09:18.080 --> 0:09:22.400 what did you study there? I studied political science and economics, uh, 0:09:22.679 --> 0:09:26.160 internet within the international focus. Okay. And after you graduated, 0:09:26.240 --> 0:09:28.160 what did you do? Then? I came here to d 0:09:28.240 --> 0:09:30.520 C on a fellowship to the Carnegian down Itt for 0:09:30.520 --> 0:09:35.720 International Peace, and I was doing uh, international economics, international 0:09:35.720 --> 0:09:38.319 economic development. I had spent the better part of a 0:09:38.440 --> 0:09:44.040 year in Argentina right before the collapse there. Became fascinated 0:09:44.080 --> 0:09:46.920 with trade and development issues, and so I spent Uh. 0:09:47.120 --> 0:09:49.400 I came here to d C and the Argentine and 0:09:49.440 --> 0:09:53.200 economy collapse while you were there, No, right after I left, okay, 0:09:53.280 --> 0:09:56.240 right after Okay, you got correlation and causation, all right. 0:09:56.320 --> 0:09:59.320 So then you came back to Washington to do what? So? 0:09:59.640 --> 0:10:04.400 So I I stayed here? I uh, Um, I worked. 0:10:04.600 --> 0:10:07.559 I sort of shifted from from international policy, economic policy, 0:10:07.640 --> 0:10:10.480 domestic policy. Then I went to law school, left e C, 0:10:10.600 --> 0:10:12.480 and I came back here. We went to law school 0:10:12.520 --> 0:10:14.880 to be a lawyer or not. I went to law 0:10:14.920 --> 0:10:18.120 school to UH to know not to be a lawyer, 0:10:18.360 --> 0:10:20.959 but because because I was fascinated. As I was working 0:10:21.000 --> 0:10:25.040 on the economic war economic elements, it became clear that 0:10:25.120 --> 0:10:29.240 most of policy is actually understanding law um in different ways. 0:10:29.679 --> 0:10:34.080 And so I went. I went to I went with 0:10:34.120 --> 0:10:35.959 the idea that I would continue to work in policy. 0:10:36.000 --> 0:10:38.240 But then so you didn't want to practice law ever, 0:10:38.559 --> 0:10:41.760 wasn't my objective? Okay, So how did you get involved 0:10:41.760 --> 0:10:45.040 with the Obama administration? Did you volunteer in the campaign 0:10:45.160 --> 0:10:46.880 or how did you get involved in the campaign or 0:10:46.920 --> 0:10:52.600 the administration? So I started working on the two thousand 0:10:52.679 --> 0:10:56.440 seven two thousand new campaign, actually worked for UH I 0:10:56.480 --> 0:10:59.959 had I had the most important experience. I campaigned again 0:11:00.400 --> 0:11:04.480 camp candidate Obama for about nine months, working for Senator 0:11:04.520 --> 0:11:08.320 Clinton Secretary Clinton UH and then after they lost, I 0:11:08.440 --> 0:11:11.000 was fortunate enough to then join the Obama campaign in 0:11:11.080 --> 0:11:14.880 campaign from what did then Senator Omama say about that? 0:11:16.920 --> 0:11:19.160 The good news was I was junior enough in the 0:11:19.200 --> 0:11:22.640 campaign and the Senator I don't think particularly aware of 0:11:22.679 --> 0:11:26.000 that of my transition to his. So he got elected, 0:11:26.120 --> 0:11:29.720 and then you got this position as a special assistant 0:11:29.720 --> 0:11:33.120 the President of Economic policy. And what was the biggest 0:11:33.160 --> 0:11:35.760 thing that you accomplished during the Obama administration in your view, 0:11:36.600 --> 0:11:39.400 My first project upon coming into government was to work 0:11:39.440 --> 0:11:42.480 as part of the team that did the restructuring of 0:11:42.520 --> 0:11:45.040 General Motives and Chrysler as well as the finance companies 0:11:45.280 --> 0:11:49.520 UM as well. And so that was basically from you 0:11:49.559 --> 0:11:52.680 will all many of you will recall November December of 0:11:52.720 --> 0:11:56.200 two thousand eight right through to the summer of two 0:11:56.200 --> 0:12:00.480 thousand nine. That was that was my over overriding. So 0:12:00.559 --> 0:12:04.160 after the Obama administration, you join the dark side of 0:12:04.559 --> 0:12:07.800 money management and you work for black Rock, but in 0:12:07.880 --> 0:12:10.319 charge of global sustainability. So what does that really mean? 0:12:10.320 --> 0:12:13.280 What were you doing at black Rock? So two things. 0:12:13.320 --> 0:12:18.760 One was trying to uh actually do uh financial research 0:12:18.800 --> 0:12:23.280 to understand what are drivers of long term economic performance 0:12:23.720 --> 0:12:28.360 that are uh that are financially relevant but that may 0:12:28.360 --> 0:12:31.960 not be on the mind of traditional investors to you know, 0:12:32.000 --> 0:12:35.120 give you a concrete example. One of the most uh, 0:12:35.200 --> 0:12:40.679 you know, persistent measures of financial performance uncorrelated is the 0:12:41.800 --> 0:12:43.800 rate of change at which a company brings down its 0:12:43.840 --> 0:12:46.400 carbon emissions, not just the level of carbon emissions, but 0:12:46.440 --> 0:12:49.080 the rate of change of doing stuff. And you know, 0:12:49.120 --> 0:12:50.840 we did a lot of research around that to to 0:12:50.880 --> 0:12:54.280 find that that's that is in part because it is 0:12:54.320 --> 0:13:00.000 an uncorrelated UH measure of operational performance. Better management team 0:13:00.120 --> 0:13:03.760 is actually better manage against that, and so that becomes 0:13:03.800 --> 0:13:06.000 the kind of thing that you can invest invest against. 0:13:06.200 --> 0:13:08.800 But it also expands the universe of what investors are 0:13:08.800 --> 0:13:12.160 thinking about. So when President Biden was starting to run 0:13:12.240 --> 0:13:14.160 for president, you knew him when he was vice president. 0:13:14.200 --> 0:13:16.839 You're in the bomb administration. Did you support him? Where 0:13:16.880 --> 0:13:20.520 you work in the campaign for UM then Vice President Biden? 0:13:20.679 --> 0:13:25.760 Or did you work for somebody else? I was for 0:13:25.760 --> 0:13:27.760 for for for us of that time, I was I 0:13:27.840 --> 0:13:30.599 was busy. I had a job at a family I 0:13:30.600 --> 0:13:33.280 would any time that, any time anyone called, I would offer. 0:13:33.840 --> 0:13:36.640 So when did you actually get involved with the Biden people? 0:13:36.679 --> 0:13:38.560 Wasn't after you won the election? Then they asked you 0:13:38.640 --> 0:13:41.520 to help with the transition. So I did some work 0:13:41.559 --> 0:13:45.240 in volunteering during to help on the developing some elements 0:13:45.280 --> 0:13:49.600 of the platform during that came together in sort of 0:13:49.640 --> 0:13:53.520 his his his general election economic policy. White House staff 0:13:53.640 --> 0:13:58.959 jobs are notoriously long houred and you have two little children, So, um, 0:13:58.960 --> 0:14:01.600 how do you manage your time? And how come you 0:14:01.640 --> 0:14:05.000 have no gray hair as a result of working these 0:14:05.040 --> 0:14:09.680 long hours in two administrations. If you if the camera 0:14:09.720 --> 0:14:13.319 gets close enough, you'll see some uh I Uh, it's 0:14:13.360 --> 0:14:16.240 it's a it's a it's a it's a constant challenge, 0:14:16.559 --> 0:14:19.080 and it's it's I don't have I don't have uh 0:14:19.480 --> 0:14:22.640 particular wisdom or inside into how to answer it other 0:14:22.720 --> 0:14:26.480 than you know, needing to be extremely efficient with the 0:14:26.520 --> 0:14:29.600 time that you have, higher great staff and build a 0:14:29.600 --> 0:14:33.200 great team. Uh. There's I've got an extraordinary uh an 0:14:33.240 --> 0:14:36.280 ec team and core team inside the White House, without 0:14:36.280 --> 0:14:39.520 which I wouldn't be able to do this. And also 0:14:40.000 --> 0:14:45.120 but it also takes a um an understanding family because 0:14:45.240 --> 0:14:49.520 no matter how good you are at prioritization, time management, 0:14:49.520 --> 0:14:52.600 and productivity with your own time, there was always, uh, 0:14:52.640 --> 0:14:54.640 there was always something that happens and always something that 0:14:54.640 --> 0:14:57.240 comes up. Your children are young. Um, so you go 0:14:57.280 --> 0:15:00.720 to PTA meetings and people give you economic advice PTA meetings, 0:15:00.720 --> 0:15:02.920 so they kind of say, I have an idea for 0:15:02.960 --> 0:15:05.880 you when and fighting inflation? Has that ever happened? People 0:15:05.880 --> 0:15:11.400 are extraordinarily generous with their advice. I suppose uh, you know, 0:15:11.480 --> 0:15:13.480 somebody wants to write a book about you and so 0:15:13.680 --> 0:15:16.080 here's what what would you say that you feel you've 0:15:16.080 --> 0:15:18.240 accomplished or what would you like to have as your legacy. 0:15:18.440 --> 0:15:21.280 I'm just I'm reflecting on your question and how boring 0:15:21.280 --> 0:15:23.360 a book it would be. Uh. I guess I would 0:15:23.400 --> 0:15:26.320 say two things. One is, I think that we are 0:15:27.080 --> 0:15:31.200 in a position where we could actually demonstrate that for 0:15:31.280 --> 0:15:35.600 the United States, doing dedicated public investment over the long 0:15:35.760 --> 0:15:41.200 term in areas of high productivity research, semiconductors, infrastructure, clean 0:15:41.320 --> 0:15:45.000 energy manufacturing. Showing that we can actually do that in 0:15:45.040 --> 0:15:48.720 a way that changes the trajectory of the economy is 0:15:49.160 --> 0:15:52.560 something that I would love to be part of demonstrating 0:15:52.600 --> 0:15:55.280 and part of associating. The second thing for me is 0:15:55.680 --> 0:15:57.560 I think that one thing that I have tried to 0:15:57.560 --> 0:15:59.120 do and that I think we have tried to do, 0:15:59.360 --> 0:16:01.960 is to say that gonna have an economic policy where 0:16:02.520 --> 0:16:05.200 accelerating the clean energy transition is at the core of 0:16:05.200 --> 0:16:07.440 our economic policy. It's not that we have an economic 0:16:07.480 --> 0:16:09.520 strategy and then we think about climate change and clean 0:16:09.600 --> 0:16:12.360 energy policy. It's actually at the core. I think we 0:16:12.400 --> 0:16:15.040 are doing that effectively doing that, and that's certainly something 0:16:15.080 --> 0:16:18.080 that I hope sustains across time. What is your career 0:16:18.120 --> 0:16:20.440 advice about how best to prepare for this kind of job. 0:16:20.520 --> 0:16:24.400 I would say a couple of things. One is, um, 0:16:24.440 --> 0:16:27.320 I can't encourage strongly enough people anybody who has any 0:16:27.360 --> 0:16:30.360 inkling towards public service to run toward it and u 0:16:30.480 --> 0:16:33.000 and engage in it. It's incredibly important at this point 0:16:33.040 --> 0:16:37.280 in our country right now too, for more people to serve. 0:16:37.520 --> 0:16:40.960 I think the second is, particularly if if you're interested 0:16:41.000 --> 0:16:44.160 in getting into policies, then probably elements of that that 0:16:44.160 --> 0:16:46.160 that that are also true in the private sector, to 0:16:46.280 --> 0:16:49.560 which is you know, be humble, be willing to work 0:16:49.600 --> 0:16:54.040 a lot, and be willing to both not have any 0:16:54.200 --> 0:16:58.240 expectation or sense of entitlement, but also uh have a 0:16:58.240 --> 0:17:00.480 lot of aspiration and willing to step to the table. 0:17:00.760 --> 0:17:03.280 So recently we had the an act pass called the 0:17:03.320 --> 0:17:06.360 Inflation Reduction Act. I mean, who came up with that name? 0:17:06.440 --> 0:17:10.440 Really it's a great name, um I guess so, But 0:17:10.440 --> 0:17:12.560 but you really think it's going to reduce inflation? It 0:17:12.560 --> 0:17:14.320 seemed like it was spending a lot of money, and 0:17:14.400 --> 0:17:16.239 how is the inflation going to be reduced by that? 0:17:16.760 --> 0:17:20.880 See it's because of the Inflation Reduction Act. Uh So 0:17:21.840 --> 0:17:24.280 joking aside, I actually think that it's UH. It's it 0:17:24.359 --> 0:17:27.040 is an appropriate name and UH it goes to the 0:17:27.160 --> 0:17:30.040 it goes to the structure of of UH. If if 0:17:30.080 --> 0:17:31.640 I could say that in a in a walkie way, 0:17:31.840 --> 0:17:34.159 the role of fiscal policy in a period of of 0:17:34.200 --> 0:17:37.080 monetary tightening. What you want to do is you want 0:17:37.119 --> 0:17:40.280 to pro you want to take measures that will lower 0:17:40.359 --> 0:17:43.760 costs for individuals and do it in a way that 0:17:43.800 --> 0:17:46.240 lowers the federal deficit. Because if you're lowering the federal 0:17:46.240 --> 0:17:48.880 deficit at the same time that you're lowing costs for individuals, 0:17:49.080 --> 0:17:52.080 then you're actually operating in the same direction. Now that's 0:17:52.080 --> 0:17:54.480 complicated to do from a policy perspective, but that is 0:17:54.520 --> 0:17:58.439 exactly what the Inflation Reduction Act accomplish, but doesn't really 0:17:58.480 --> 0:18:01.760 lower federal debt and and title deficit because I thought 0:18:01.760 --> 0:18:03.840 it was just lowering it but the lower ware it 0:18:03.880 --> 0:18:06.480 would otherwise have been, But it's not actually producing a 0:18:06.560 --> 0:18:10.360 net reduced reduction in the title of debt isn't so 0:18:10.520 --> 0:18:13.000 we're producing it below where the policy people said it 0:18:13.000 --> 0:18:14.840 would have otherwise been right. So the appropriate way to 0:18:14.920 --> 0:18:17.600 judge any piece of legislation is is it going to 0:18:17.600 --> 0:18:20.959 reduce or increase the deficit compared to the baseline at 0:18:20.960 --> 0:18:25.040 the time, and the Inflation Reduction Act will reduce the 0:18:25.040 --> 0:18:27.439 deficit compared to the baseline by you know, about two 0:18:27.520 --> 0:18:30.359 hundred and sixty billion dollars depending in the first decade, 0:18:30.400 --> 0:18:32.399 probably more than a trillion dollars in the second decade. 0:18:32.440 --> 0:18:34.520 And importantly, it does it in ways like you know, 0:18:34.840 --> 0:18:38.480 probably the simplest way to understand is the provision that 0:18:38.520 --> 0:18:41.160 allows Medicare to for the first time, negotiate for better 0:18:41.160 --> 0:18:44.200 prices for prescription drugs. That will mean that Medicare is 0:18:44.280 --> 0:18:48.560 spending less money on drugs. That will lower federal spending, 0:18:49.040 --> 0:18:50.920 but it will also lower the cost of drugs to 0:18:51.200 --> 0:18:54.200 Medicare recipients and also to recipients in the private market, 0:18:54.240 --> 0:18:57.199 since Medicare is such a large purchaser. Okay um. In 0:18:57.240 --> 0:19:00.440 the Inflation Reduction Act, a lot of the taxing increases 0:19:00.520 --> 0:19:03.480 that the President had previously proposed the Build Back Better 0:19:03.560 --> 0:19:06.320 Act did not get in. There are those tax increases 0:19:06.400 --> 0:19:08.440 off the table for the remainder of the Biden term, 0:19:08.560 --> 0:19:13.240 or you're not precluded from uh those are those uh, 0:19:13.280 --> 0:19:16.639 those are policies the present thing thought made sense was 0:19:17.040 --> 0:19:19.320 would have supported if they were in the legislation and 0:19:19.359 --> 0:19:22.640 continues to support going forward. And I will say, even 0:19:22.640 --> 0:19:24.600 for all the things that weren't in there, one of 0:19:24.600 --> 0:19:27.000 the reasons, to go back to your previous question why 0:19:27.040 --> 0:19:32.280 that bill reduces the deficit and actually helps in reducing 0:19:32.280 --> 0:19:35.320 inflation across time, is that what is in there, for example, 0:19:35.440 --> 0:19:40.560 is a new minimum tax book minimum tax um for 0:19:40.880 --> 0:19:43.560 the largest corporations, those with over a billion dollars and earnings. 0:19:43.720 --> 0:19:46.680 I think that that's the kind of reasonable, common sense 0:19:46.720 --> 0:19:49.199 tax reform that makes sense. It does mean that some 0:19:49.240 --> 0:19:53.440 people will pay more in taxes, but certainly that kind 0:19:53.440 --> 0:19:56.240 of base broadening reform, there's a lot of there's a 0:19:56.240 --> 0:19:58.480 lot of important sensibility to it. On the day that 0:19:58.560 --> 0:20:02.840 the Inflation Reduction Act as signed, record high inflation numbers 0:20:02.880 --> 0:20:06.159 came out. So did you ever consider maybe adjusting the 0:20:06.240 --> 0:20:09.520 schedule of the signing ceremony or was it something you 0:20:09.520 --> 0:20:11.479 you said that who told the president the numbers were 0:20:11.480 --> 0:20:13.800 gonna be that high that morning and and maybe you 0:20:13.800 --> 0:20:17.560 should change the signing ceremony. I think that that number 0:20:17.640 --> 0:20:21.359 and others go to how people are experiencing inflation today 0:20:21.400 --> 0:20:25.200 because one of the principal reasons why that headline number 0:20:25.280 --> 0:20:28.960 was basically flat. Was because in the month prior gas 0:20:28.960 --> 0:20:33.879 prices had calmed down by a very significant amount, and 0:20:34.000 --> 0:20:39.399 that is really important for typical Americans UH monthly balance sheets. 0:20:39.400 --> 0:20:41.399 But it also is important because it's it's one of 0:20:41.440 --> 0:20:45.600 the most visible price signals in our economy. Now you're 0:20:45.680 --> 0:20:49.760 two in years into almost two years into this administration, UM, 0:20:49.800 --> 0:20:52.520 and you expect to stay for another two years I think, 0:20:52.720 --> 0:20:56.159 which it's a long UM two years, so you're not 0:20:56.240 --> 0:20:58.399 worn out and you could see doing this for another 0:20:58.400 --> 0:21:00.760 two years at least, if not more. I've got no 0:21:00.840 --> 0:21:02.880 plans to leave, and I've got my head down and 0:21:03.240 --> 0:21:06.520 certainly fully fully absorbed in the work we're doing. So 0:21:06.560 --> 0:21:09.920 in the next two years, let's suppose you control Congress. 0:21:09.960 --> 0:21:11.639 What is you what you'd like to do most in 0:21:11.760 --> 0:21:13.800 economic policy in the next two years. What would be 0:21:13.840 --> 0:21:16.719 your highest goal other than getting inflation down and unemployment 0:21:17.000 --> 0:21:19.679 keeping a reasonable level? Is there another type of Chips 0:21:19.680 --> 0:21:22.240 Act or some other major piece of legislation that you 0:21:22.240 --> 0:21:26.520 want to get through? Look, I think there's UM. There's 0:21:26.520 --> 0:21:29.600 a number of priorities that that UH I would love 0:21:29.600 --> 0:21:32.480 to see us make more progress on. UM. I'll answer 0:21:32.480 --> 0:21:34.320 your question. But as a decide, the first and most 0:21:34.359 --> 0:21:36.560 important thing that that we're gripped by and focused on 0:21:36.600 --> 0:21:40.679 now is effectively implementing this historic set of legislation that 0:21:40.720 --> 0:21:43.160 we have accomplished. The implementation of this to your point 0:21:43.160 --> 0:21:46.560 about chips and otherwise, the effective implementation across the board 0:21:46.720 --> 0:21:48.560 is going to make a difference, a big difference in 0:21:48.680 --> 0:21:52.080 terms of uh, the broader economic impact. But look, I 0:21:52.119 --> 0:21:54.280 think we need to make more progress on tax reform. 0:21:54.440 --> 0:21:57.919